Genesis Energy's sharemarket debut resulted in $24 million
worth of shares being traded in its first three minutes.
Genesis climbed 17% to $1.81 from its listing price of $1.55,
giving holders of the 49% that was sold an immediate gain of
about $135 million.
The price was underpinned by the massive scaling back of
share allocations, which created hot demand, and its
attractive potentially high yields.
Genesis' debut at 1pm on Thursday bought to an end the
Government's much hyped and controversial partial floating of
state owned enterprises, including Mighty River Power and
The floats in total raised $4.7 billion for the Future
Investment Fund, including $733 million from the Genesis
More than $143 million worth of shares traded hands in the
IPO process, which attracted 68,000 retail investors, giving
Genesis the third largest share register on the NZX.
Before the debut, Craigs Investment Partners and Forsyth Barr
had the stock valued at $1.92 and $1.65, respectively.
Craigs Investment Partners broker Peter McIntyre said the
high share price was prompted by the ''massive'' scaling back
of the offer, and the potential ''hyper yields'' from Genesis
''It has been difficult for investors to find pockets
[investments] of value in the New Zealand market,'' Mr
Forsyth Barr broker Andrew Rooney said aside from brokers'
scaling back by 20% for the public pool, investors wanting
$2500 of shares got 100%.
But thereafter, the scaling became incrementally greater.
Applications for $10,000 received just $3467 worth and those
wanting $40,000 were scaled back to $5000.
Before the 1pm opening, investors were lodging bids to top up
to what they wanted, and sellers were similarly in the
market. Some institutional investors were lodging requests
for $1 million ''blocks'', he said.
Mr McIntyre noted that while there was an oversupply of
electricity in the market at present, and companies were
either postponing or cancelling new infrastructure projects,
there would, in the medium to long term, ''eventually be a
more demand than supply'', Mr McIntyre said.
''I would be very surprised to see a pull-back in price as
the yields will hold it up,'' Mr McIntyre said.