It'll need to be one helluva loyalty scheme, John

OPINION

That hissing sound is the air going out of the previously inflating balloon of anticipation ahead of a pre-Christmas Mighty River Power share float.

One of the unmeasurable, but real, costs of the delay forced by concern over Maori claims to freshwater is the impact of lost momentum on the ultimate success of the first partial privatisation.

Granted, it's been touch and go for months whether the Christmas deadline was ever achievable. 

But hope sprang eternal.  Across the investment community there were signs of life and engagement with investors that have been all too hard to detect in recent years.

"A lot of people put money aside in expectation of a float before Christmas," Milford Asset Management's Brian Gaynor told Radio New Zealand earlier in the week. Now, they will invest elsewhere. And next time they will be wary by comparison.

They are unlikely to make such pre-commitments until much later in the piece. 

They'll want to see a prospectus, not political gum-flapping, before they start allocating funds to MRP. 

That probably means a smaller capital pool competing for the shares. It probably means an issue price lower than it has been sinking to anyway.

Of course, if momentum re-ignites during the IPO process itself it could bode well for a stag on day one if there is a late stampede of interest. But that is never guaranteed.

While the top end of town understands that politics gets in the way of governments behaving commercially, preparations for the MRP IPO this year had primed pent-up "animal spirits" in the investment community.

Now it is a dull plod to Christmas and broking houses like Craigs Investment Partners, who have spent up large to create interest online, on radio and in print, are left with a bill for something that turned out to be ill-timed. 

Clemenger BBDO must wonder what kind of poisoned chalice they won when they got the Treasury's advertising contract for the IPO.

Right across the financial services and media industries an anticipated pre-Christmas kicker for advertising, printing and online activity, catering, legal and accounting advice and so on are now so much after-party flotsam now.

Their costs are over and above the $5 billion to $10 billion cost to the government of the delay.

Most would-be boosters will have blown a budget they can't totally replace to repeat the exercise next year.

The palpable oomph for the MRP float a couple of months ago, when the media conversation turned briefly to the details of actual sale rather than interminable problems with it, has gone.

Reinvigorating that sentiment will be a heroic task for the marketers next year.

However, one of the most notable features of that brief flurry of excitement was Prime Minister John Key's coat-dragging on the question of a loyalty bonus for mum and dad shareholders.

No clear detail emerged beyond the likelihood that a chunk of the 49% of MRP available for sale would be held back for distribution on a pro-rated basis for shareholders who kept their shares for perhaps two years.

This, at least, remains a potential source of IPO Viagra, which the government would do well to nurture and ensure is well pitched.

It will need to be good enough to register some element of surprise for investors, while not becoming just the latest in the string of value-destroying events – both controllable and uncontrollable – which have blighted the partial sale of one of our best-performing state-owned companies.