Sale of State Assets

[mccollr]

Looks like we have "game on" for the first of the asset sales. I am keen to be involved but am a relative novice. I appreciate the comment and debate on this forum and I would like to ask for comment on the asset sale programme.

[percy]

I think they will be the same as any share we look to buy.We will need to concentrate on dividend yeild,and growth prospects ,management,and all the usual fundamentals.

[ob1kinobi]

I can't help but comment on this politically.

Sure, middleclass Mums and Dads might make a few 'bob' but some asset sales have been a complete balls up. Telecom & the Railways come to mind.

Thankfully Kiwibank gives us a NZ owned bank to compete with the Aus owned ones.

I don't know a lot about the asset sale program, but in principal I doubt its a good idea.

Time will tell, but we won't be able to buy these assets back.

My 2 cents and am happy be convinced otherwise.

Does anyone know where the funds are going to be spent? Repaying or servicing debt?

[POSSUM THE CAT]

ob1kinobi The winners will be the brokers banks & financial (http://www.sharetrader.co.nz/member.php?9612-ob1kinobi)advisers etc. The ones that get the hundred plus million in fees etc

[CJ]

Telecom & the Railways come to mind.


Time will tell, but we won't be able to buy these assets back.Ahem.

My View:
Politically - there is no reason why the government needs to own 3 power companies. Mixed ownership seems an ok compromise but would prefer they kept 100% of one, maybe a smaller one which they can grow and make long term infrastructure decisions with.

Investment wise - it depends on the company and the price. The govt will be in a difficult position: sell it for too much and investors wont make money so wont buy into the next one. Sell it for too little and greens/labour will say National have gifted profits to their rich buddies.

[fungus pudding]

I can't help but comment on this politically.

Sure, middleclass Mums and Dads might make a few 'bob' but some asset sales have been a complete balls up. Telecom & the Railways come to mind.

Does anyone know where the funds are going to be spent? Repaying or servicing debt?

I suspect you are a lot younger than I am ----too young to remember those very special occasions before daring to make a toll call. Almost the dearest in the world, and still had to prop up the 22,000 employees from the tax take. You won't remember the waiting lists of months to get a phone on - reduced to a few weeks with a doctor's letter. Nobody could seriously regret privatising telcomunications. Oldies still shake in their boots at the thought of making a toll call. As for the railways ..... the mistake there was buying them back. Anyway the funds are going to increase state owned assets.

Quote from Bill English "The mixed ownership programme involves less than 3% of taxpayers' total assets of $245 billion, which will grow by another $22 billion over the next four years.

So this is about how we pay for increasing those assets – it's not about reducing them."

Mixed ownership was an opportunity for New Zealanders to invest in something other than housing or finance companies, he said.

“It will free up taxpayers' money so the Future Investment Fund can invest in priority new assets like schools, hospitals and irrigation, without having to borrow from overseas lenders.”

The mixed ownership model is also being considered for three other energy companies – Genesis, Meridian and Solid Energy.


So panic not. As a taxpayer you will be better off - not worse.

[777]

Well put fungus.

[Hoop]

Well put fungus.

yes it was well put Fungus...you bought back my old memories..The big excuse for Nationalisation back then was that the enemy could control the vital structures of the Country such as water power communication (phone and radio/TV) police Army etc ...geez man you couldn't let the Government sell them....

I have great memories of MOW Ministry of Works ..always a butt of many jokes...and they deserved it too...the ulimate in inefficiencies...Back then driving on the roads around 4.15 to 4.45pm was comical...MOW trucks everywhere holding up traffic trundling along at 25 to 30 km/h from the jobs back to the yard in time for the 5.00pm knock off.

Govt use to smudge the unemployment figures back then too by loading up government departments ..The Railways was a common employer...a requirement on your work record was that you must know how to play 500.

oh... nearly forgot this memory... Govt painters decorated a Dept of Housing house...paint fell off within a year...hell.. it was too much like hard work to wash off the mould and grime first,,,nah she'll be right mate we'll just paint over it :)

EDIT..a common currency back then was a crate of beer...it was amazing ..we could get stuff that "fell off the back of a truck" cheap!!...now we have inflation we have to buy it with a lot more money from a retailer.

ahh... those were the good old days ...before those nasty Governments started selling things off and made us work harder for less money..the bastards.

[fungus pudding]

yes it was well put Fungus...you bought back my old memories..The big excuse for Nationalisation back then was that the enemy could control the vital structures of the Country such as water power communication (phone and radio/TV) police Army etc ...geez man you couldn't let the Government sell them....

I have great memories of MOW Ministry of Works ..always a butt of many jokes...and they deserved it too...the ulimate in inefficiencies...Back then driving on the roads around 4.15 to 4.45pm was comical...MOW trucks everywhere holding up traffic trundling along at 25 to 30 km/h from the jobs back to the yard in time for the 5.00pm knock off.

Govt use to smudge the unemployment figures back then too by loading up government departments ..The Railways was a common employer...a requirement on your work record was that you must know how to play 500.

oh... nearly forgot this memory... Govt painters decorated a Dept of Housing house...paint fell off within a year...hell.. it was too much like hard work to wash off the mould and grime first,,,nah she'll be right mate we'll just paint over it :)

ahh... those were the good old days ...before those nasty Governments started selling things off and made us work harder for less money..the bastards

I was remininscing myself. Remember it was illegal to plug your own phone into the system, although the odd bod smuggled one or two in from Australia. You couldn't buy phones but had to rent them - annual rental was almost the retail value. Having two phones at home was a luxury because of the extra monthly rental. And I'll bet most have forgotten - you could buy an answer phone, but needed a permit to use it. My first job was with the Post and Telegraph (P+T) as it was called- what a laugh, certainly wasn't overworked. They were the days alright.

[Lizard]

Telecom was actually a good float for early investors - it was only after about 2000 that the share price collapsed. CEN on the other hand was pretty bad for early investors and took a long time to get back to issue price ($3.15?).

I think asset sales are a good idea, provided it is selective. The government has invested considerable amounts back into assets since the last sell-down, so why not sell off some of the more "mature" investments and then invest their low-interest borrowings into better ventures... including the much needed additional capital to turn Kiwibank into a really profitable venture.

Hey, at some stage we'll possibly need entirely new forms of electricity generation (marine energy?) that the government might be better placed to test and implement, or a distribution network for whatever it is that will power our future vehicles... to me, it is the developing infrastructure where a very long term view is required and/or major resource management debates might be generated that governments are best placed to develop and own.

As for the value of floated businesses, I agree with Percy that they'll need to be assessed on the individual merits - including whether the government is likely to step back in to compete or regulate.

[fungus pudding]

Telecom was actually a good float for early investors - it was only after about 2000 that the share price collapsed. CEN on the other hand was pretty bad for early investors and took a long time to get back to issue price ($3.15?).

I think asset sales are a good idea, provided it is selective. The government has invested considerable amounts back into assets since the last sell-down, so why not sell off some of the more "mature" investments and then invest their low-interest borrowings into better ventures... including the much needed additional capital to turn Kiwibank into a really profitable venture.

Hey, at some stage we'll possibly need entirely new forms of electricity generation (marine energy?) that the government might be better placed to test and implement, or a distribution network for whatever it is that will power our future vehicles... to me, it is the developing infrastructure where a very long term view is required and/or major resource management debates might be generated that governments are best placed to develop and own.

As for the value of floated businesses, I agree with Percy that they'll need to be assessed on the individual merits - including whether the government is likely to step back in to compete or regulate.

You're dead right about Kiwibank. It's destined to be a tin-pot little participant in the market as it is, but if it was partially floated, it would boom - a huge boost in customer base and of course - the capital. Unfortunately it would not be politically expedient, and Dunne has made sure that it's off the table anyway. Hardly responsible for a govt. to have a head-in-the sand attitude towards it - but that's life.

[Hoop]

I was remininscing myself. Remember it was illegal to plug your own phone into the system, although the odd bod smuggled one or two in from Australia. You couldn't buy phones but had to rent them - annual rental was almost the retail value. Having two phones at home was a luxury because of the extra monthly rental. And I'll bet most have forgotten - you could buy an answer phone, but needed a permit to use it. My first job was with the Post and Telegraph (P+T) as it was called- what a laugh, certainly wasn't overworked. They were the days alright.

:)

Hears another one...my mate was rather electronic eccentric wizz..In the early 1970's he bought another TV set but he didn't watch TV channels with this one he used it to play a reel to reel video player that he built.
He wouldn't pay his TV license (very expensive back then..thanks to the Govt monopoly..Each TV set had to have a separate license) reciting that why should he pay for something he didn't use.. Ended up going to court after dragging on for a couple of years, he defended himself but it cost the taxpayer heaps of money...He won his court case..but the government sent around a technician to physically remove the receiver out of his offending TV set (via court order and more taxpayers money)....yep true story

[ob1kinobi]

My earlier comments weren't really about the inefficiencies of Govt institutions pre 1984 and the merits per se of de-regulation.

My concerns are assets being sold too cheaply and those closest to the action making a buck, (Merchant Bankers) whilst in the LT the country is less well off. That is earnings from these assets leaving the country and the Govt having less income.

Whilst we are assured this isn't going to happen, things can change pretty quickly.

The idea of selling Kiwibank has already been floated. I like the idea of a bank which is NZ owned

[bung5]

My concerns are assets being sold too cheaply and those closest to the action making a buck, (Merchant Bankers) whilst in the LT the country is less well off. That is earnings from these assets leaving the country and the Govt having less income.



MIGHTY RIVER

* Valued at $3.75 billion.

* Net profit in 2011 $127 million.

P/E 30

Doesnt sound cheap to me...

[Major von Tempsky]

For those of you interested in discussing the political side its all there under Elections 2011 (a separate high level heading like NZX and Off-Market Discussions).
http://www.sharetrader.co.nz/showthread.php?8606-If-National-wins/page6

That will keep this thread for investors who want to invest in the coming Mighty River float - like me :-)

[bung5]

LOL bung, you choose your number very selectively :)

you got some better numbers?