Float not a Flop - English
The Government is standing by its asset sales - despite critics who have labelled this week's latest float a flop.
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The Government is standing by its asset sales - despite critics who have labelled this week's latest float a flop.
Speaking on TV3's The Nation, Finance Minister Bill English said the Meridian sell off was providing Kiwis the opportunity to get into the stock market.
"I disagree with both the description of it as a fizzer or a failure. Just keep in mind what we are doing here. This is going to provide from now on opportunities for New Zealanders to invest in a large Kiwi Company. What's developing around our stock markets is a trend towards New Zealanders buying back assets through our stock market," Mr English says.
"There's anecdotal evidence that in the case of Might River power at the lower price its New Zealand retail investors who are buying in, and offshore investors who are selling down. Now that's just anecdotal evidence, and we will see how the trend goes."
Only 60,000 New Zealand shareholders have taken up the Meridian offer, compared to Mighty River Power's launch which attracted 104,000.
But the Finance Minister says asset sales have brought value to the market.
"[Meridian] it is going to be listed on the market next week, and it will be an opportunity available along with Mighty River, and in the future Genesis - several billion dollars worth of companies - that weren't on our stock market before that are attractive long term investments."
IMF has predicted New Zealand growth at 4.1 per cent in the final quarter of next year, but the Government is cautious about the sudden growth spurt.
"Well its certainly good news for more jobs and higher incomes but as is always the case with growth you want it to be sustainable," he says.
"It is reasonably fast growth.... one of the risks ahead of us is fast rising house prices."
Mr English made it clear that New Zealand wasn't out of the economic woods yet - warning that increasing household debt was a concern for the Government.
He says current house prices and levels of debt are out of line with historic levels.
"Now there is a legitimate argument as to whether they're always going to be higher, or whether they're going to come back to the norm. I just think we need to be pretty cautious and so our policy reflects the need to take pressure off house prices, off interest rates, pressure off the exchange rate so we can have all of those lower for longer - that would be good for the economy."
NBR Staff
Sun, 27 Oct 2013
Sun, 27 Oct 2013
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Float not a Flop - English
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