Wednesday, 17 August 2022
Meet the JournalistsPremiumAucklandWellingtonCanterbury/South Island
CrimePoliticsHealthEducationEnvironment and ClimateNZ Herald FocusData journalismKāhu, Māori ContentPropertyWeather
Small BusinessOpinionPersonal FinanceEconomyBusiness TravelCapital Markets
Politics
Premium SportRugbyCommonwealth GamesCricketRacingNetballBoxingLeagueFootballSuper RugbyAthleticsBasketballMotorsportTennisCyclingGolfAmerican SportsHockeyUFC
NZH Local FocusThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay of Plenty TimesHawke's Bay TodayRotorua Daily PostWhanganui ChronicleStratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu Courier
Covid-19
Te Rito
Te Rito
OneRoof PropertyCommercial Property
Open JusticeVideoPodcastsTechnologyWorldOpinion
SpyTVMoviesBooksMusicCultureSideswipeCompetitions
Fashion & BeautyFood & DrinkRoyalsRelationshipsWellbeingPets & AnimalsVivaCanvasEat WellCompetitionsRestaurants & Menus
New Zealand TravelAustralia TravelInternational Travel
Our Green FutureRuralOneRoof Property
Career AdviceCorporate News
Driven MotoringPhotos
SudokuCodecrackerCrosswordsWordsearchDaily quizzes
Classifieds
KaitaiaWhangareiDargavilleAucklandThamesTaurangaHamiltonWhakataneRotoruaTokoroaTe KuitiTaumarunuiTaupoGisborneNew PlymouthNapierHastingsDannevirkeWhanganuiPalmerston NorthLevinParaparaumuMastertonWellingtonMotuekaNelsonBlenheimWestportReeftonKaikouraGreymouthHokitikaChristchurchAshburtonTimaruWanakaOamaruQueenstownDunedinGoreInvercargill
NZ HeraldThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay Of Plenty TimesRotorua Daily PostHawke's Bay TodayWhanganui ChronicleThe Stratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu CourierVivaEat WellOneRoofDriven MotoringThe CountryPhoto SalesNZ Herald InsightsWatchMeGrabOneiHeart RadioRestaurant Hub

Advertisement

Advertise with NZME.
Business

Fran O'Sullivan: A touch of English reserve

7 May, 2013 05:30 PM3 minutes to read
'We're starting to see the benefits of stable and consistent policy' - Bill English. Photo / NZH

'We're starting to see the benefits of stable and consistent policy' - Bill English. Photo / NZH

Fran O'Sullivan
By
Fran O'Sullivan

Head of Business

VIEW PROFILE
Will the Government press on with IPOs in the wake of Mighty River Power?

New Zealand is firmly back on the international radar screen with offshore investors keen to snap up a stake in Mighty River Power to add to their Fonterra fund holdings..

But the big question on the lips of both on and offshore investors, is whether the Government will press ahead with the next power company IPOs - Meridian Energy and Genesis Energy - while international confidence in New Zealand is high and liquidity remains reasonably strong.

Finance Minister Bill English is not going to give the game away until after Mighty River Power lists on Friday. He says the decision will be based on which asset will realise the best value "relative to the objectives we set ourselves".

English believes the offshore interest is sparked by a combination of the assets that are slated to be listed in the Government's IPO programme and a "more healthy economy".

Advertisement

Advertise with NZME.

"We're starting to see the benefits of stable and consistent policy," he adds. "It's been the same story for three or four years - we've just got to keep at it."

Leading players like First NZ Capital managing director Scott St John and Craigs Investment Partners managing director Frank Aldridge agree.

But adds St John, "New Zealand needs to stack up on the relative and absolute basis because cash can go anywhere. It's also a contest, we've got to ensure what we offer is competitive."

St John indicates international investors take quite a bit of comfort from the level of fiscal responsibility the Government has exercised over the last few years.

But he notes that though there have been "a few wobbles" in the financial markets regulatory space, there is recognition that has changed. "Everyone has to know the rules, so we can have a clean game."

"It is important that policies are clear so the capital can be raised efficiently."

Related articles

Business

Mighty River - a mighty boost

07 May 05:30 PM
Business

Chinese may establish fund to invest in NZ tourism

07 May 05:30 PM
Business

Jim McElwain: Markets ready for the renaissance

07 May 05:30 PM
Business

Liam Dann: NZX leads us into optimism

07 May 05:30 PM

Aldridge says the past 12 months have been a relatively buoyant time for the NZ capital markets.

The MRP float has been a signal that NZ's capital markets are open.

Advertisement

Advertise with NZME.

But he says the increased appetite on the domestic front for investing in New Zealand equities has been driven by a number of factors, not least the low rates investors have been getting on bank term deposits.

"The MRP float is very important to the whole mixed ownership programme," he adds.

First NZ Capital is co-lead manager of the Mighty River Power float and Craigs is one of the two leading retail brokerage houses for the float.

Craigs' David McCallum says a major lack of supply (driven by a number of factors including the fact that balance sheets are in good shape, there has not been a large amount of M&A activity, and lack of borrowing generally) also means the banks are competing strongly among themselves, leading to a sharp lowering in lending margins.

He says this makes debt capital markets less competitive. "It does mean any corporates that do come to the market can be expected to be well-supported."

McCallum notes that at a retail level the absence of issuance means there has been some focus on high-yielding defensive stocks, and bank term deposits also look attractive.

Advertisement

Advertise with NZME.

He says Craigs expects issuance conditions continuing to be supportive as the large deals that were done after the Global Financial Crisis mature. The firm predicts retail maturities of more than $2 billion a year for the next four years, and total market (ex Kauri) will be averaging $6 billion annually.

Advertisement

Advertise with NZME.

Latest from Business

Premium
BusinessUpdated

Māori tokenism in ads: Is it causing more harm than good?

17 Aug 05:00 AM
Premium
Business

Banks stick with their NZ milk price forecasts

17 Aug 04:00 AM
Premium
Business

Why mortgage rates may have peaked despite big OCR hike

17 Aug 03:28 AM
Business

E-sports company collapses after raising $5.3 million

17 Aug 03:33 AM
Premium
Business

Tourism NZ unveils $5m campaign targeting 'high quality' visitors

17 Aug 03:00 AM

Most Popular

Adrian Orr fronts media after RBNZ hikes OCR by 50bp
Business

Adrian Orr fronts media after RBNZ hikes OCR by 50bp

17 Aug 02:00 AM
'Incredibly unsettling': Police update on suitcase homicide mystery
New Zealand|Crime

'Incredibly unsettling': Police update on suitcase homicide mystery

17 Aug 01:32 AM
Premium
NZ's highest paid CEO: Fletcher boss takes home $6.58m
Business

NZ's highest paid CEO: Fletcher boss takes home $6.58m

17 Aug 01:04 AM

Advertisement

Advertise with NZME.
About NZMEHelp & SupportContact UsSubscribe to NZ HeraldHouse Rules
Manage Your Print SubscriptionNZ Herald E-EditionAdvertise with NZMEBook Your AdPrivacy Policy
Terms of UseCompetition Terms & ConditionsSubscriptions Terms & Conditions
© Copyright 2022 NZME Publishing Limited
TOP