Mighty River Power decision puts NZX on a high
The NZX closed yesterday at a five-year high after news Mighty River Power will be partially sold.
NZX says the Supreme Court’s decision not to allow the Maori Council’s appeal has stoked optimism for new NZX listings.
The NZX 50 rose 37.40 points, or 0.9%, to 4276.31, the highest close since October 2007.
Within the index, 31 stocks rose, 12 fell and seven were unchanged.
ASB chief economist Nick Tuffley told NBR ONLINE yesterday’s decision now provides more clarity and certainty over when the company will come to market, which is positive for the stock exchange.
However, he says the markets have also been influenced by global factors and a slight recovery in Italian equities will have helped the result.
Prime Minister John Key says the new listing will provide more investment opportunities for smaller investors in Kiwisaver schemes.
“New Zealanders are everyday putting money into their Kiwisaver accounts – they need investments.”
He is confident the transfer of Mighty River Power to a mixed-ownership model company will be subject to greater oversights than if it remained a state-owned enterprise.
“If you had the things which will occur under mixed ownership like continuous disclosure, external directors and external analysis, Solid Energy may have performed better,” Mr Key says.
Solid Energy, whose chief executive Don Elder quit this month, is in talks with its banks after announcing it is carrying $389 million of debt and is heading for a "significant" first-half loss.