Shareholders in NZX-listed power companies became the first beneficiaries of National's decisive victory in the general election after the market opened on Monday.
Forget the tax cuts the Nats may or may not deliver in 2017, investors in the so-called "gentailers" got an almost instant boost to their paper wealth.
Euphoria is probably the best way to describe the sharemarket's initial reaction to the party's win.
Market watchers were expecting stocks -- particularly those from the electricity sector, which could have faced profit-sapping new regulation under a Labour/Greens government that would have aimed to make Kiwis' power bills more affordable -- to make strong gains. But many expressed surprise at the strength of the rally.
Rickey Ward, New Zealand equities manager at JBWere, said Monday's opening gains -- Meridian Energy surged by more than 10 per cent, while Mighty River Power rose 8.3 per cent -- were particularly impressive.
Other stocks that would have potentially been exposed to increased regulatory risk following an opposition victory, including SkyCity Entertainment and Auckland Airport, also made gains.
Four wheel answer to understanding economies
Economies can be complicated things. But the head of global investment strategy at Tokyo fund manager Nikko Asset Management, John Vail, has found a simple way of expressing his views, using cars as metaphors for major economies.
Speaking at an investment conference Nikko held in Auckland last week, Vail described the United States economy as a rebuilt 2008 Jeep Cherokee "running on jet fuel".
"It will get you where you want it to go," he said. "It's a pretty sturdy car but you can never drive it too fast."
"It's a 2008 Ferrari driven by an 18-year-old, probably without a driver's licence," Vail said.
"It's been driven very, very hard while they polluted their country and created vast income disparities."
We may be hearing a lot less about the European Union's economic woes these days, but Vail reckons the EU economy remains no flashier than a 1998 Peugeot.
"It has to be watched pretty carefully," he said. "It has been rebuilt as well, like the Jeep, after having crashed."
Vail didn't know enough about New Zealand's economy to make a call on what kind of car could be used to describe it.
Stock Takes reckons it would be a late model Mercedes that's just had its first couple of dings.
Low-income families struggling to pay their power bills have a little less to celebrate this week.
But the thousands of retail investors who took part in the Government sell-downs of Mighty River Power, Meridian and Genesis Energy will be pleased.
Shareholders in the three companies were $523.2 million richer on paper yesterday morning compared with Monday's opening prices.
National's win finally boosted Mighty River shares, which had been the weakest link in the privatisation programme, back above their $2.50 initial public offer price.
Mighty River's stock, which fell below $2 a share in January, closed up 3c yesterday at $2.59.
Genesis, which opened at $1.92 on Monday, closed at $2.03 last night, while Meridian instalment receipts opened at $1.45 on Monday and closed at $1.555 last night.
ROOM TO GROW
Ward reckons the potential for increased dividend payouts from the electricity companies could support their share prices in the weeks and months ahead, after the post-election rapture wears off. The gentailers already pay solid dividends, with Mighty River Power, for example, having a gross dividend yield of 7.3 per cent. Ward says capital management was a common theme during the power firms' recent financial result announcements.
"They've got scope to increase their [dividend] payouts a little bit," he says. "That should provide sufficient support to their share prices. It might not necessarily mean they go higher, but it should provide support."
SIGN OF THE TIMES?
Shares in Nuplex Industries rallied sharply this week after the company announced it was in talks with an Australian investment firm over a possible sale of two of its Australasian business divisions.
The speciality chemicals and resins manufacturer's stock jumped 7.6 per cent to $3.25 on the NZX on Wednesday morning after the company said it was having discussions with Champ Private Equity over a potential sale of its distribution business, Nuplex Specialties, and its plastic additives unit, Nuplex Masterbatch. The company acquired Masterbatch for A$25 million from Acquos, a privately owned Melbourne chemical firm, in late 2011.
The potential deal with Champ is evidence of the lift in mergers and acquisitions activity many commentators have been predicting.
More than US$86 billion worth of M&A deals have taken place in Australia this year, a 55.2 per cent increase on the first nine months of 2013, according to data from Thomson Reuters.
Shane Solly, portfolio manager and research analyst at Harbour Asset Management, says more listed companies might look to sell business units in the near future.
"We've seen a strong recovery in capital markets globally and interests rates are still relatively low," Solly says.
"It's a reasonable environment for companies to privatise some parts of their businesses."
Nuplex shares closed down 5c yesterday at $3.06.
Auckland-based Tyndall Investment Management, which is owned by Nikko Asset Management, has this month re-branded under its parent's name.
Peter Lynn, managing director of what is now Nikko Asset Management New Zealand, says the Japanese firm's brand is well known globally.
"With this brand transition there is no change to our investment teams, their investment philosophy, processes or portfolios," he says.
Nikko's local arm has close to $4 billion under management, while the parent had US$168 billion in assets on its books in June.