No shoot-the-lights-out share growth for Mighty River Power, but attractive dividends - broker
"Far better for shareholder investors to 'be tapped for further capital' than the past highway robbery of hiking prices today to provide profit to expand."Featured comment
NBR Business Pulse Results
NBR paid subscribers overwhelmingly say they would buy shares in Mighty River Power.
The power company is first on the block under the government's partial asset sale programme under legislation passed last week.
Over the weekend, Craigs Investment Partners analyst said investors will see only "modest growth" in the power company's share price but should see "attractive dividends".
“You’re not going to get this shoot-the-lights-out” share growth," Craigs' Mark Lister said on TVNZ's Q&A yesterday.
Mr Lister is confident the IPO will be oversubscribed. “The interest is very strong,” he said.
"Mum and Dad investors" may not find it easy to get “big licks” of shares, he added. “I think it’ll be difficult for people to get big parcels of shares in the initial offering.”
He added that Mum and Dad investors (MADIs? – Editor) might be tapped for further capital.
“Investors might be asked to put more money in further down the track.”
Q + A – July 1, 2012
Interviewed by CORIN DANN
CORIN Good morning, Mark. Why do people buy a share? Why do people buy into a company like Mighty River Power? What is the attraction?
MARK LISTER – Craigs Investment Partners