Meridian Energy’s partial float was given an initial thumbs up by analysts but they warn the share price is likely to be volatile heading into next year’s general election.
One fund manager said the difference in share price between Labour and National could be as much as 90 cents. . .
Analysts agreed that day one of the float was successful and the closing share price was in line with expectations.
Devon Funds Management equity analyst Phillip Anderson said new investors would be pleased. “It’s enough for the new investors to be happy – they are feeling good about it – but not so much that it looks like the seller left a lot on the table.”
The general feeling among analysts was that institutions which had their share quotas scaled back had created strong demand for Meridian shares.
But the analysts warned that the general election could affect the share prices of both Meridian and Mighty River Power, which was partly privatised this year.
“My valuation for . . . [Meridian] as a whole is . . . around $1.10 if the Labour Party wins, but business as usual under National at around two bucks,” Anderson said. . .
That loss in value isn’t just for the wealthy for whom the left show no concern.
It is loss in value for ACC, Kiwi Saver accounts, the New Zealand Superfund, other pension and savings funds, and of course in the 51% of the company the state still owns.
The best way to keep the value up is to get National back into government.
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