MEL - Meridian Energy

[blackcap]

NOt sure if it is MEL or the Govt but some one does. If you dont exercise, they will sell on your behalf and then seek any shortfall from you. I guess this comes into play only if the IR trade below 50c as otherwise, they will recoup enough from the sale of the IR.

Agree... but I think the IR would have to be below 0 for this to take effect. IF they can sell the IR to a buyer even for 1 cent.... that buyer stumps up with the 50 cents to convert to a share. Lets hope it does not go this far.

[biker]

or you can use the money you saved to buy more now at a discount if you dont think the price will rise to far... but i doubt that the share price will be 1.5 after the third installment unless of course lb/greens come in... but nats plus M/party would have to really blow it for that to happen...

Third installment??

[troyvdh]

Giday.Do folk believe/have faith the $1 paid will attract a return an amount of 13 % per year (roughly ok) for a period of 18 months...is this beyond question and utterly set in stone ?
Then I suppose do folk believe that they can sell their $1 paid ...for a $1.....then all well and good...in fact very good...

Is this as simple as it appears.

just trying to simplify things .........a further question... what price would would one have to pay for a MEL should the return required be a more modest 6-7 %.Again are there any risks,

I apologise should this has been raised previously.

[Master98]

just trying to simplify things .........a further question... what price would would one have to pay for a MEL should the return required be a more modest 6-7 %.Again are there any risks,

I apologise should this has been raised previously.

6% div return, sp=0.105/0.06=$1.75, then take out second installment 50c, so will be $1.25.

[blackcap]

Seems the "Bank of New York Mellon Corporation" have been buying a lot of shares on market. 72 million on 29 October. That is a large chunk of what did go through on day 1. They now hold 8.12% of MEL.

[RTM]

Yes...that seems to be a huge vote in favour of Meridian and the strength of the NZ dollar.
My very rudimentary understanding of economics is that printing money without associated productivity improvements leads to inflation. Eventually. The Americans have been printing a lot of money...for a long time. So I guess some high level of inflation is inevitable for them. And that will cause their dollar to devalue much further. So are US companies making investments such as this to hedge against the collapse of the $US ?

PS Good to see NZ Inc loading up on the stock. Not.

[CAM]

See if political risk does anything

http://www.stuff.co.nz/national/politics/9346241/Labour-Greens-take-edge-in-poll

[CJ]

I might vote labour just to get the price down on MEL and MRP, I wonder if I could be done for market munipulation if I vote labour LOL:pNo but you might be sent to the insane asylum!

[Hoop]

I might vote labour just to get the price down on MEL and MRP, I wonder if I could be done for market munipulation if I vote labour LOL:p

No..but you may get lynched by the dividend hunters when Labgreenour regulates the power price and the power companies have no option but to slash their dividends.

[blockhead]

So the div returned previously to the NZ Govt is now being diverted to Uncle Sam, couldn't think of a nicer recipient, might be able to spend a few bob updating his spying activities so he doesn't get caught any longer

[clip]

^Would have been an 8% holding of 49% sold, which would be 3.92% of the total company

[luigi]

They announced that they held 8.12% of the installment receipts but have since clarified they hold 3.98% of the company.

https://www.nzx.com/companies/MEL/announcements/243149

[CJ]

They announced that they held 8.12% of the installment receipts but have since clarified they hold 3.98% of the company.I do wonder if the Installment receipts offer an easy option for Greens/NZ First to nationalise MEL (Re-nationalising the power co is a 'non negotiable' NZ first policy - all NZ First policies are non negotiable by the way). Technically we dont own the shares yet, just a right to them so the Govt must be holding them in trust for us. By the simple wave of the wand (and some legislation) they would cancel the IR (for consideration of $1), effectively reinstating 100% Government ownership. Still theft but a lot easier than forcibly reacquiring which would be required for MRP.

It could even go in the same legislation where the cancel the SkyCity convention center contract. They could call it the Winston Peters Banana Republic Act.

[CJ]

we are getting everything in order to move to Ireland... lower company tax rates and become non new zealand residents...Why Ireland. Greece has a much better climate and paying tax there is option (observation only based on what the locals do)

[RTM]

Be a dangerous currency hedge without confidence in Meridian tho. What one might gain on the currency could be lost if the SP fell.
Both ?

[mouse]

Meanwhile, MRP has just touched $2.23. Why all the interest in Meridian when MRP could well be a better, and cheaper, buy?
MRP does generate 30% of NZ electricity, but Manipouri, and Twizel power has to be sold at a discount to the normal price. Due to transmission losses.
Further, if NZ First buys back all generators we stand to make a decent profit from them on MRP at $2.50 a share.

[sharer]

Meanwhile, MRP ... could well be a better ... buy?...

Some day soon maybe folks will start agreeing with my advocacy that: govt should have merged MRP & MEL, or
if determined to sell off our assets, they should have merged them first & floated that entity
instead (saving also tens of millions of "advisor" rorting fees).
It would have an unbeatable combination of basic generation resources. Shades of Electricorp, yes.
As things have now developed, we should somehow get onto the Board & advocate we seriously consider MEL itself directly buying a nice big block of MRP shares (& thus avoid duplication costs etc as we look to develop the missing geothermal business).
I haven't even had my afternoon g&t yet, but cheers anyway.

[Daytr]

Should tap into Wikileaks, they probably know more than anyone what the different political parties plans are for this, via the NSA or some other agency that we have never heard of ! LOL

[Joshuatree]

That sure was a Eureka moment for me when the 2nd final payment was set at 50c. What a clunker if the min suggested guidance of 60 c was set; would have dragged down others on listing.

[dsurf]

6% div return, sp=0.105/0.06=$1.75, then take out second installment 50c, so will be $1.25.

Yes at 6% but what if the floating mortage rate in 18 months is 7.5% & the 6% has become 9.5%?

[mouse]

Meanwhile, MRP has just touched $2.23. Why all the interest in Meridian when MRP could well be a better, and cheaper, buy?
MRP does generate 30% of NZ electricity, but Manipouri, and Twizel power has to be sold at a discount to the normal price. Due to transmission losses.
Further, if NZ First buys back all generators we stand to make a decent profit from them on MRP at $2.50 a share.

A further minor point about the difference between MRP and Meridian is that Meridian has a large canal system, with its associated infrastructure, to maintain. MRP just uses the Waikato river. I do not know what effect that has on the bottom line of the two companies.

[CJ]

So after being forced to restate their SSH to below 5% (I think they were probably right the first time but not politically beneficial) the New Yorkers have gone out and bought more. Now hold over 10% of the IR or 5% of the company.

[robbo24]

What are holder's thoughts on renationalisation of MEL/MRP with "compensation" only going to those with proven need?

What kind of twisted, mutant policy is this type of garbage? Even for an idea?

I seem to recall when the company now known as Kiwirail was sold, the commie Labour government paid through the nose to renationalise it.

Are holders going to stand for this rot if it becomes reality?

http://www.stuff.co.nz/national/politics/9349220/Radical-proposals-will-put-heat-on-Cunliffe

[CJ]

What are holder's thoughts on renationalisation of MEL/MRP with "compensation" only going to those with proven need?That idea wont float. The least they could get away with is repurchase at list price (or MV in MRP case??).

And even that would be very unlikely to happen I would think.

[TimmyTP]

What are holder's thoughts on renationalisation of MEL/MRP with "compensation" only going to those with proven need?

What kind of twisted, mutant policy is this type of garbage? Even for an idea?

I seem to recall when the company now known as Kiwirail was sold, the commie Labour government paid through the nose to renationalise it.

Are holders going to stand for this rot if it becomes reality?

http://www.stuff.co.nz/national/politics/9349220/Radical-proposals-will-put-heat-on-Cunliffe
Obviously Cunnliffe is a mole; this can only be a work of genius to destroy the Left from the inside.
Thanks to whoever set up this subterfuge; my week is now complete.

[Xerof]

Another high priority policy.......gee, they are looking good aren't they?


* A prohibition on school boards of trustees restricting same-sex partners from attending school balls

[Lawt]

What are holder's thoughts on renationalisation of MEL/MRP with "compensation" only going to those with proven need?

What kind of twisted, mutant policy is this type of garbage? Even for an idea?

I seem to recall when the company now known as Kiwirail was sold, the commie Labour government paid through the nose to renationalise it.

Are holders going to stand for this rot if it becomes reality?

http://www.stuff.co.nz/national/politics/9349220/Radical-proposals-will-put-heat-on-Cunliffe

Seems to me they have just handed the staggers the perfect out i.e. too much political risk to hold MEL shares.

[Romer]

Did I read that 20% of MEL installment receipts were stagged? - - - Has anyone calculated what that is worth to the country's sharebrokers? - - - And I guess they didn't arrange the float in the first place for love. I think I might be in the wrong business.

[minimoke]

What are holder's thoughts on renationalisation of MEL/MRP with "compensation" only going to those with proven need?


Where do you get this idea of compensation. Why should a holder be compensated for making a potentially bad decision. It was well known pre float that Labour / Greens may tinker with this market. Some of us assessed the risk and for me I decided it wasn't worth it since I had originally planned to stag these floats. I didn't buy so if it goes belly up so be it. If you hold and it goes belly up same applies. But you can't say you weren't warned. The flip side is of course that since I didn't buy I can't complain about not repeaping the benefit of capital gain on MRP or dividend yield on MEL. That's my loss. Wheres my compo for being put off these deals. There is none and I don't expect any.

[CJ]

Where do you get this idea of compensation. .compensation = buying them off you
No compensation = stealing them

We were warned on kiwi power but not on re nationalisation without compensation.

[janner]

Wussel Norman is becoming more shrill every time he appears on the Idiot Box..

Cunninglife is appearing more COCKY !!.. ( Oh !!.. or was that Len Browne ).. No definitely Cunninglife !!..

Liabours policies are reverting to the " We know best ".. A la .. Hulun Clarke era..

Do you really think that the Banksters will let them go ahead with their policies if the, God Forbid .. Event happens and they do achieve power ??

Nah !!.. Just get on with your own investment thoughts..

P.S. Please note.. no mention of Len Browne's family :-)0

[Bjauck]

I seem to recall when the company now known as Kiwirail was sold, the commie Labour government paid through the nose to renationalise it.

Are holders going to stand for this rot if it becomes reality?

http://www.stuff.co.nz/national/politics/9349220/Radical-proposals-will-put-heat-on-Cunliffe

Party conferences face all kinds of remits...many of which do not stand a chance of becoming policy.

Paying generous compensation to the owners of capital sounds like an act of generosity for a bunch of "commies". Please provide evidence that the Clark Labour government was communist.

A greater worry for share investors should be an exemption for the family home from Labour's proposed Capital Gains Taxation. Surely that would have a greater effect on MEL's share price. Under the proposals, there would be a tax advantage in putting capital in acquiring and building up palatial homes whose gains would be tax free whilst your share portfolio gains would be taxable.

[percy]

its back to the future .....once people see there little family beach bach being the target of a capital gains tax they will start to state in public that tax free capital gains are not good and then vote for ("NO Tax on the Bach"), to make sure they are not being taxed ...

we have a large community project here almost go ahead ... everyone said they would contribute to the project part funded by the local council ... big color adverts in the paper by the local council ... when time came for people to give them money ...... nothing .... project died.... what people say in public and in polls is not always what they will do in fact...

So very true.!! Right on the money!!!!

[Zaphod]

That idea wont float. The least they could get away with is repurchase at list price (or MV in MRP case??).

And even that would be very unlikely to happen I would think.

Agreed. If they attempted to take the shares back without any compensation, capital would take flight from the markets.

Perhaps this is just an ideological burp.

[macduffy]

Agreed. If they attempted to take the shares back without any compensation, capital would take flight from the markets.

Perhaps this is just an ideological burp.

It probably is.

But a more subtle approach would be to achieve the same result by taxing and regulating the investor appeal out of the power companies. Lower power prices, however achieved, would be a powerful vote-getter!

[Bjauck]

It probably is.

But a more subtle approach would be to achieve the same result by taxing and regulating the investor appeal out of the power companies. Lower power prices, however achieved, would be a powerful vote-getter!

Too true. They could tinker around with the Com Com etc. and leave them to do the hatchet job. Look at the example of Telecom NZ. It was demonized with its competitors (many of whom were not NZX listed entities) leading the chorus (no pun intended!).

[CJ]

Where would the shareprice be if those Mellons from NY hadn't been buying? They are now over 5% and cant go over 10%.

Lets hope they dont decide to sell.

[mouse]

Where would the shareprice be if those Mellons from NY hadn't been buying? They are now over 5% and cant go over 10%.

Lets hope they dont decide to sell.
Amen........

[CJ]

Where would the shareprice be if those Mellons from NY hadn't been buying? They are now over 5% and cant go over 10%.

Lets hope they dont decide to sell.They are now up to 6.5%!

If your selling, they are buying!

[sharer]

They are now up to 6.5%! ...

It seems likely they intend going for the limit ~ 10%.
We might expect the market to find a lower estimate of "value" soon after that result gets reported.

[kizame]

Can someone post the ticker symbol for this stock,NZX seems so up with it, that it isn't there, unless I'm missing something.
thankyou in advance.

[Master98]

Can someone post the ticker symbol for this stock,NZX seems so up with it, that it isn't there, unless I'm missing something.
thankyou in advance.
lol, MELCA

[CJ]

No big buyer in the market today? Dived a few percent.

[TimmyTP]

No big buyer in the market today? Dived a few percent.
I have to admit I chickened out yesterday & sold the lot.
I was planning to hold on for the full placement and enjoy the divis for my old age, but rather lost my mojo/faith in anything vaguely associated with regulation after the CNU & ComCom fun and games. Also there did seem to be some short-term buying that I wonder is propping up the price. Might regret this, but I think there are better uses for my $ for now.

[mouse]

No big buyer in the market today? Dived a few percent.

Will it do a Mighty River???

[CJ]

Will it do a Mighty River???I dont think so. Fair value is about $1.10 in my view so some one will step in before it gets too low.

[mouse]

I dont think so. Fair value is about $1.10 in my view so some one will step in before it gets too low.
please give your mates a phone call to rescue the situation!

[silu]

Just to mess with the heads it will go as low as $1.02 but no cent less ;)

[Master98]

about half of floated shares traded over $1.05, this is a huge support which is very hard break through, unless another 'lehman brothers collapse' I think.

[GR8DAY]

.....drifting,drifting.....now below what I stagged it for.......let's see if it gets to test $1.00???

[vorno]

People get too scared. Just hold onto them, they're not Xero shares!!! :P

[silu]

So my $1.02 prediction doesn't look that far fetched now.

[FarmerHamilton]

So my $1.02 prediction doesn't look that far fetched now.

102 offered ...

Mum's and Dad's will start panicking soon thinking this is an MRP sequel , hopefully this stays down at these levels ( and even lower ) over the next few weeks as I await my Synlait Farms takeover proceeds. I will be buying quite a few MELCA if they are still below $1.05

[goldfish]

I really did not think we would see 1.02 that is not a good trend.
I can only reason that oversea's markets are now getting spoked by the nz regulators decesion that has destroyed CNU'S share price.
When you combine this with the opposition parties threats to regulate the power industry in nz if voted in it may be swaying the oversea's outlook on NZ as not such a safe polictical haven.
Oversea's investors like free market's not regulated one's.:confused:

I agree, the threat of regulation from labgreen kept me out of this.

[vorno]

Sure, they'll fall and perhaps even dip below the $1 mark. People will panic a bit and then it will reach the news. Then they'll compare it to MRP and Labour/Greens will say HEY LOOK! YOU SEE! It's going the way of MRP!

MEANWHILE -- at the Greenhouse of DOOM The Evil LG (heh) plot their next policy to scare the do-gooder Asset investors!

[Snow Leopard]

Brent's Opinion Piece on Meridian (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11155809)

Best Wishes
Paper Tiger

[winner69]

and this guy calls himself an authorised financial consultant.
He sound like someone who borrows your wrist watch to value it but only tells you the time.

Like it ...that phrase that is

[mouse]

May you live in interesting times!
It is pretty sad if our sharemarket can only thrive if we have overseas buyers buying it up.
How on earth Genesis can have 49% sold on an IPO in the present situation I have no idea.

[percy]

May you live in interesting times!
It is pretty sad if our sharemarket can only thrive if we have overseas buyers buying it up.
How on earth Genesis can have 49% sold on an IPO in the present situation I have no idea.

While Genesis has as "chair" the ex Mainzeal "chair", I would think it would sink rather than float.!

[troyvdh]

mouse ...you are totally correct....and like you I find it sad.
Folk ...complain about overseas entities buying into NZ what ever.....WHY.....if NZ ers lack the balls/empathy/lack of vision/optimism/faith...to the degree when they cannot/will not invest here then ..why complain when others do so....cheers...

[winner69]

After the initial enthusiasm been down hill ever since. That one day fall from 110 started it all off

My old point and figure chart (love them as it just shows the ups and downs) says it all

How far down will it go I wonder?

[vorno]

After the initial enthusiasm been down hill ever since. That one day fall from 110 started it all off

My old point and figure chart (love them as it just shows the ups and downs) says it all

How far down will it go I wonder?

Speculation can only get us so far! Shall more flock when the first dividend payment comes up? Time shall tell!

[cyclist]

After the initial enthusiasm been down hill ever since. That one day fall from 110 started it all off

My old point and figure chart (love them as it just shows the ups and downs) says it all

How far down will it go I wonder?

W69. Would you mind explaining your chart a little more. What data do you use (e.g. daily close?), and how do you then turn it into this chart type. What would the chart look like if it starts trending back up e.g. green +'s in the third column once it gets beyond 106? And I guess also the benefits of this versus a price/time chart. Thanks.

[winner69]

W69. Would you mind explaining your chart a little more. What data do you use (e.g. daily close?), and how do you then turn it into this chart type. What would the chart look like if it starts trending back up e.g. green +'s in the third column once it gets beyond 106? And I guess also the benefits of this versus a price/time chart. Thanks.

It is using daily closing prices

I like them because it takes a lot of the noise out of price movements. I am looking for changes in price direction (over time) and p&l does this. When one develops over more time than resistance/support levels become very clear. Trend lines also become very obvious.


In this case if melca closed at 106 today I would start a new column of x's at 106 and continue that column up until the price drops by 2 cents and then start a down column of o's

This is a manual one because I like doing them this way sometimes, ESP on something of interest. I do have a cheap app on the iPad (Clever Point and Figure charts) that allows you keep a portfolio of stocks and updates the charts when you want to (from yahoo finance data). Quite cool and it even has a dash board of sorts like the one you see on CBC where the stocks on the watch list are in a table form and they are either coloured red or green or white. Love the day when the screen is all green.

If you want more sure if you good and figure you get a good idea of hem.

Real TA people like Hoop would think jeez winner is losing the plot using what is essentially graph paper. They would say where are the RSI and macd and bollinger bonds and all that. I use them sometimes but in a lot of cases just want to see the underlying big trends.

[cyclist]

Thanks for the that. I didn't realise that "point and Figure" is a widely used technique (I just assumed it was your own idea). Lots of info on the web, which I will digest in more detail. I like the simplicity.

[percy]

I suppose there will be people like me,watching the share price fall,and holding our selves at the ready to buy more share once the trend has turned.!

[sharer]

I suppose there will be people like me,watching the share price fall,and holding our selves at the ready to buy more share once the trend has turned.!

I'm imagining that London/NewYork mob may soon reach the limit with ~10% holding & have to leave the market, which will then sink to impale itself on my sub-100 standing order lurking there ...

[Harvey Specter]

I'm imagining that London/NewYork mob may soon reach the limit with ~10% holding & have to leave the market, which will then sink to impale itself on my sub-100 standing order lurking there ...I predicted this so put in a sell order at 1.11. It never got hit (too far back in the cue) and the rest is history. Happy to be holding but would have been better to buy back in at a 10% discount.

[Hawkeye]

Dropping to $1.03, could be some nervous politicians out there.....

[robbo24]

I'm imagining that London/NewYork mob may soon reach the limit with ~10% holding & have to leave the market, which will then sink to impale itself on my sub-100 standing order lurking there ...

In which case the taxpayers should be singing praises that they can buy even cheaper shares with a higher yield per share...

[Beagle]

http://www.sharechat.co.nz/article/6a8908f0/meridian-receipts-sink-close-to-listing-price.html?utm_medium=email&utm_campaign=Meridian+receipts+sink+close+to+listi ng+price&utm_content=Meridian+receipts+sink+close+to+listin g+price+CID_2fa527c09672139d94c76cf780b8c54f&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle6a8908f0meridi an-receipts-sink-close-to-listing-pricehtml

The glut of supply I was talking about earlier in this thread and shrinking demand is starting to take its toll already.
What happens with the Smelter closes and 14% of the nation's already over supplied power comes to the market.
Yes, you guessed it, the remaining big wholesale industrial users will be in the box seat and wholesale prices will plummet.
$30 a megawatt hour anyone ?
You've been sold a PUP, get out at a small profit while you can, why take a financial beating like poor hapless Mighty River Power shareholders ?

[robbo24]

Speculation can only get us so far! Shall more flock when the first dividend payment comes up? Time shall tell!

It didn't work for MRP...

[mouse]

http://www.sharechat.co.nz/article/6a8908f0/meridian-receipts-sink-close-to-listing-price.html?utm_medium=email&utm_campaign=Meridian+receipts+sink+close+to+listi ng+price&utm_content=Meridian+receipts+sink+close+to+listin g+price+CID_2fa527c09672139d94c76cf780b8c54f&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle6a8908f0meridi an-receipts-sink-close-to-listing-pricehtml

The glut of supply I was talking about earlier in this thread and shrinking demand is starting to take its toll already.
What happens with the Smelter closes and 14% of the nation's already over supplied power comes to the market.
Yes, you guessed it, the remaining big wholesale industrial users will be in the box seat and wholesale prices will plummet.
$30 a megawatt hour anyone ?
You've been sold a PUP, get out at a small profit while you can, why take a financial beating like poor hapless Mighty River Power shareholders ?
But, if the price of electricity comes down, then so will the cost of generation. You just mothball none profit making plant. It may lead to higher profits!

[silu]

The trend is really ugly on this one. $1 mark the psychological barrier. I deliberately held back at the IPO (applied only for 2k worth) but would need a trend reversal before I can contemplate topping up.

[ScrappyO]

quick dip under $1.00 now.

[Beagle]

But, if the price of electricity comes down, then so will the cost of generation. You just mothball none profit making plant. It may lead to higher profits!

Sorry I can't follow your logic. In Meridian's case as all their generation is from renewable resources they have one of the lowest cost structures out there, so they've got no expensive generation to shutter down.
In simple terms if there cost of generation is say $15 a megawatt hour and they are forecasting getting an average of $60 their profit would be $45 per megawatt hour but if the wholesale price collapses to say $30 per megawatt hour due to a massive potential glut of power generation their profit would be one third of what it was. Probably won't be that bad but all the signs of demand from recent quaterly power company releases make grim reading and there's plenty of new generation still being built, meanwhile we have the well known smelter issue pending and the Labour Greens. Don't forget there's no means to effectivly and efficiently transmitt Manopouri's generation at present if the Smelters owner pulls the pin.
I think its clear this stock was pitched to be attractive to those chasing income...but how will the company pay these huge dividends when the signs are already there that wholesale power prices are under very serious pressure ?

[Arbroath]

Sorry I can't follow your logic. In Meridian's case as all their generation is from renewable resources they have one of the lowest cost structures out there, so they've got no expensive generation to shutter down.
In simple terms if there cost of generation is say $15 a megawatt hour and they are forecasting getting an average of $60 their profit would be $45 per megawatt hour but if the wholesale price collapses to say $30 per megawatt hour due to a massive potential glut of power generation their profit would be one third of what it was. Probably won't be that bad but all the signs of demand from recent quaterly power company releases make grim reading and there's plenty of new generation still being built, meanwhile we have the well known smelter issue pending and the Labour Greens. Don't forget there's no means to effectivly and efficiently transmitt Manopouri's generation at present if the Smelters owner pulls the pin.
I think its clear this stock was pitched to be attractive to those chasing income...but how will the company pay these huge dividends when the signs are already there that wholesale power prices are under very serious pressure ?


You make some good points but one reason why Meridian is the pick of the bunch is because it has low cost generation so if wholesale prices fall say 20-30% it is the high cost generation that will be forced to close and Meridian will make less profit but can keep generating reasonable margins. It is like being a low cost miner of a commodity watching competitors go to the wall around you. Not great for you but you will survive.

Thats the negative. Now imagine with population growth and the slowing of the industrial demand decline how good a c. 8% yield may look if things turn out a little better than the market is pricing at the moment. I think a lot of the risk is in the price at this level. The bigger threat is much higher bond yields like a NZ 10 year at 6-7% rather than 4.8%

[Harvey Specter]

Snapiti - I think resource consents will be pushed through quickly if it means Manapuri can keep spinning and Huntly can be closed. National would fast track that, as would a Greens led government (oop I mean Labour led)

[Joshuatree]

10 years ? Nope


Hi Winston, Manapouri was built by Bechtel concurrently with Tiwai Point, the government at the time never intended the power to go elsewhere. If Tiwai were to close suddenly, up to 400MW of Manapouri output would be stranded without the transmission being upgraded (existing corridors) through to the HVDC terminal at Benmore.

http://www.3news.co.nz/Grid-can-cope-with-smelter-closure/tabid/423/articleID/293223/Default.aspx

As I understand there is a four year notification period, so the risk is that Transpower may not be able to get the transmission upgrade built in that timeframe, politically and/or physically. Sounds like a long time, but NIMBY's don't like transmission lines.

The 630MW potentially available (inc the stranded 400MW) from Manapouri would go into the market, likely displacing thermal output at Huntly, so there are risks to both Meridian and Genesis.

[Harvey Specter]

Resource consents are the easy bit the government has a lot less control over the enviroment court system. This will take years.Courts only apply the law as set by Government. If government wants it done, it will be done.

[Beagle]

The bigger threat is much higher bond yields like a NZ 10 year at 6-7% rather than 4.8%

Yeap there's that risk too.

Snapiti, nice post too :)
And even when / if the new transmission lines are built by Transpower their charges, (which I'm going to say are a major way for the Govt to milk the grid, because that's what they are), plus the gross level of inefficiencies in transmitting power all the way from Manopouri to say Auckland where its really needed, may make this a marginal exercise at best.

Gents, have another look at the recent quarterly releases from MRP and Meridian regarding demand and wholesale pricing. Plenty there to take on board.

[TimmyTP]

Of course I agree totally.
But how long approval through the enviroment courts will take is anyone's guess.
me thinks 3-5 years.
Lawyers love this stuff and land owners effected will challanged every step of the proccess
Environment court matters are certainly unpredictable. I remember someone in Coromandel objecting to the Albany-Orewa motorway extension and managing to delay it by about 5 years, over concerns about the spawning of a particular type of fish. Not suggesting we should ignore the environment, but 5 years seemed a little excessive:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=2351231

[Beagle]

You make some good points but one reason why Meridian is the pick of the bunch is because it has low cost generation so if wholesale prices fall say 20-30% it is the high cost generation that will be forced to close and Meridian will make less profit but can keep generating reasonable margins. It is like being a low cost miner of a commodity watching competitors go to the wall around you. Not great for you but you will survive.

Thats the negative. Now imagine with population growth and the slowing of the industrial demand decline how good a c. 8% yield may look if things turn out a little better than the market is pricing at the moment. I think a lot of the risk is in the price at this level. The bigger threat is much higher bond yields like a NZ 10 year at 6-7% rather than 4.8%

Good post too. Doesn't mean on a PE of over 20 that the company faced with these serious business risks is a good investment though.
That said the irony that you couldn;t possibly build all those hydro stations and wind farms for anything like the market capitalisation of Meridian isn't lost on me.

[Joshuatree]

5 years seems reasonable/ realistic

[Daytr]

The best thing the Govt. could do with these assets is to keep them in public hands & make them non-profit by reducing private individuals power bills. It would have a massive stimulus effect on the economy putting money in the pockets of Mums & Dads & all New Zealanders that would be spent & multiply through the economy. Rather than making quite sizeable profits & then flogging them off for a discount, set aside a certain amount for infrastructure & renewable energy & then what is remaining reduces the cost of power for households which is excessive in NZ & going up at about double or more the rate of inflation. It will be interesting what the referendum result is, however unfortunately I suspect self interest will prevail. AIRNZ is a bit different as this was effectively a bail out, but perhaps its important enough for NZ as a brand & let alone provider of transportation & freight that it too needs to be controlled by the Govt.

[robbo24]

There is probably a lot of electricity reliant industries that would be happy to increase production or move into an environment with a [potential] oversupply of electricity.

[mouse]

There is probably a lot of electricity reliant industries that would be happy to increase production or move into an environment with a [potential] oversupply of electricity.
What Meridian should do is reduce the price of electricity to its South Island retail customers, such as Christchurch ones like me, and save on transmission losses to Auckland.
Plus encourage South Island commercial customers by reducing prices relative to the North Island.
Oversupply problem solved.

[Harvey Specter]

What Meridian should do is reduce the price of electricity to its South Island retail customers, such as Christchurch ones like me, and save on transmission losses to Auckland.
Plus encourage South Island commercial customers by reducing prices relative to the North Island.
Oversupply problem solved.I assume they do price it cheaper (by the cost of transporting it north).

Despite what the greens say, the market is efficient (though it maybe questionable that everyone receives the marginal spot rate).

[vorno]

What Meridian should do is reduce the price of electricity to its South Island retail customers, such as Christchurch ones like me, and save on transmission losses to Auckland.
Plus encourage South Island commercial customers by reducing prices relative to the North Island.
Oversupply problem solved.
12% of the countries power doesn't simply get re-absorbed!

[Stu]

The best thing the Govt. could do with these assets is to keep them in public hands & make them non-profit by reducing private individuals power bills. It would have a massive stimulus effect on the economy putting money in the pockets of Mums & Dads & all New Zealanders that would be spent & multiply through the economy. Rather than making quite sizeable profits & then flogging them off for a discount, set aside a certain amount for infrastructure & renewable energy & then what is remaining reduces the cost of power for households which is excessive in NZ & going up at about double or more the rate of inflation. AIRNZ is a bit different as this was effectively a bail out, but perhaps its important enough for NZ as a brand & let alone provider of transportation & freight that it too needs to be controlled by the Govt.

WTF are you talking about? They are not in "public" hands to start with, they are in GOVERNMENT hands. Sheesh.
As for the "plan", why not do the equivalent and simply borrow a trillion from China and give it away to each household equally to "stimulate" the economy? It will be spent on flat screen TV and smartfones made in China and maybe random holidays in Fiji and the Gold Coast.
Travel agents and smartfone sellers will do well but say goodbye to a trillion NZ dollars :p


"It will be interesting what the referendum result is, however unfortunately I suspect self interest will prevail."

I suspect the the opposite, the majority who would rather spend their NZ dollars on smartfones and Fiji holidays while taking the chance to bitch about someone else apparently selling their "legacy" to foreigners (who they hate, but don't quote them on it).

[vorno]

...Where does that trillion dollar figure come from? I didn't know our water was gold-plated!
As for referendum, just a waste of cash regardless of the outcome. The sale has and is happening either way.

On the sidelines you're forgetting that the Majority of people don't have a lot of free-flowing cash reserves. For a lot of people it would simply go to living costs. For those however who do not exercise restraint would waste the cash.

[Daytr]

Agree re the referendum in some ways being a waste of time being after the horse has bolted, however if & I say if the result was very anti selling assets then surely it must make Key re-think.

Stu, public as in the general public another words everyone, ie Govt.

I always find it strange when someone is trying to make a point they offer an opinion on what other people will do & also make mass generalizations.

If people choose to spend the savings that is their choice & maybe as Vorno suggests they spend it on food & NZ farmers benefit. Either way spending the money helps create jobs be them retail or manufacturing etc. They could just use it to pay the rent or pay off the mortgage. But it should be their choice whether you like the choice or not.

All over the world privatizing electricity assets particularly infrastructure has time & time again proven to be a disaster. I know the Govt still owns the controlling interest & this is a good thing, however they will be changing the shape of how these companies are run & there is a real risk there.

[blackcap]

Agree re the referendum in some ways being a waste of time being after the horse has bolted, however if & I say if the result was very anti selling assets then surely it must make Key re-think.



Daytr, can you elaborate on "make Key re-think"? Do you mean buy back what they sold? Or just not proceed with the last asset being Genesis? Or do you mean re-think in policy in general? Cheers.

[Daytr]

Vote Snapiti. How hard is it!

Not sure of the outcome I am sure there will be plenty of lobbyist types who have a financial interest will vote.
However I agree will be a very low turn out.


Apart from being a complete waste of time and money as the bulk of the deals are done.
I think the results will be;
Very low voter turn out.

Only those who have a strong opinion of the subject matter will vote (not me)

Therefore it will be an overwhelming results in favour of no asset sales.

Talk about shutting the gate after the bull has bolted.

[warthog]

The best thing the Govt. could do with these assets is to keep them in public hands & make them non-profit by reducing private individuals power bills. It would have a massive stimulus effect on the economy putting money in the pockets of Mums & Dads & all New Zealanders that would be spent & multiply through the economy. Rather than making quite sizeable profits & then flogging them off for a discount, set aside a certain amount for infrastructure & renewable energy & then what is remaining reduces the cost of power for households which is excessive in NZ & going up at about double or more the rate of inflation. It will be interesting what the referendum result is, however unfortunately I suspect self interest will prevail. AIRNZ is a bit different as this was effectively a bail out, but perhaps its important enough for NZ as a brand & let alone provider of transportation & freight that it too needs to be controlled by the Govt.

Hold on.

This makes far too much sense, and assumes that the government is acting in the interests of all New Zealanders (a very popular myth).

[couta1]

My wife and myself will be chucking ours straight in the rubbish bin where they belong we have been shafted enough over MRP and CNU by this Govt not to have any interest in this referendum

[Daytr]

Blackcap, well its probably too late to undo what is already done & there is no way Key would do such an embarrassing backflip. But yes I suppose halt the other sales. AIRNZ I'm not so concerned about, but as I have said earlier perhaps its important enough to NZ that it should stay in Govt hands.

If the Greens & Labour form a coalition & the Maori parties will no doubt then join them, Key will be out on his ear. He has been such a disappointment as he had such a mandate & the charisma of a real leader, he could have been one of the greats imo. Only if he had done the right thing for NZ in the long term rather than thinking he is still head of sales at Morgan & Stanley in NYK. I wasn't in NZ under Clark (been away for 19 years!) so I can't comment if he is an improvement or not & quite often PMs are compared to the previous as a benchmark.


Daytr, can you elaborate on "make Key re-think"? Do you mean buy back what they sold? Or just not proceed with the last asset being Genesis? Or do you mean re-think in policy in general? Cheers.

[G on]

Why not partake of the referendum? You paid for it!

[blackcap]

Now couta1 one must remember that the government did not force you to buy any shares.
But I do agree the referedum papers belong in the rubbish bin.

I will be voting in the affirmative.

Daytr, thanks for your reply, that makes sense.

[Daytr]

Sorry Blackcap, what I was going to add & got distracted was that if Labour, Greens & the Maori do form a coalition & become the Govt. then yes there is a real risk that they will take back full Govt. ownership of what has already been floated. They have suggested as much but whether they actually carry it out is another story.

[blackcap]

Sorry Blackcap, what I was going to add & got distracted was that if Labour, Greens & the Maori do form a coalition & become the Govt. then yes there is a real risk that they will take back full Govt. ownership of what has already been floated. They have suggested as much but whether they actually carry it out is another story.

I understand their desire to do that, but I do not think it will be possible. Realistically they would have to pay $3.00 for MRP, $1.30 for MELCA to get to 90% compulsory acquisition and that would be financial suicide.

[Harvey Specter]

I understand their desire to do that, but I do not think it will be possible. Realistically they would have to pay $3.00 for MRP, $1.30 for MELCA to get to 90% compulsory acquisition and that would be financial suicide.They could go for legislate compulsory acquisition. If they did it at list price, that would be scary. If they did it at zero consideration (winstons proposal), that would be down right terrifying.

[blackcap]

They could go for legislate compulsory acquisition. If they did it at list price, that would be scary

That would cause serious damage to the NZ economy. Winston's option is unthinkable :)
.

[Daytr]

I doubt they would do that, as in effectively confiscate for zero. We aren't in South America, more's the pity I like South American women... haha.

However they may pay the average of the market over say the previous months etc. The thing is if they come to power & the possibility is in the air would the price be higher or lower? Agree though they would have to legislate for it to happen. They may just agree to pay the issue price. Could be a good thing for share holders depending on where it is trading at the time.


They could go for legislate compulsory acquisition. If they did it at list price, that would be scary. If they did it at zero consideration (winstons proposal), that would be down right terrifying.

[blackcap]

I doubt they would do that, as in effectively confiscate for zero. We aren't in South America, more's the pity I like South American women... haha.

.

Your not wrong there :) Indeed.

Compulsory acquisition, even at list price would set a dangerous precedent and many fund managers would pull investment from NZ causing significant problems. So they may threaten to do that as an election "gimmick" but will not follow through with it.

[Harvey Specter]

I doubt they would do that, as in effectively confiscate for zero. We aren't in South America, more's the pity I like South American women... haha.

However they may pay the average of the market over say the previous months etc. The thing is if they come to power & the possibility is in the air would the price be higher or lower? Agree though they would have to legislate for it to happen. They may just agree to pay the issue price. Could be a good thing for share holders depending on where it is trading at the time.I think whatever they do needs to be part of their election policy. That way they can get a mandate like National did for the asset sales.

I do note that during the MEL IPO, Labour was very quiet on the KiwiPower scheme - has Cun_liffe dropped Shearers policy?

[QOH]

Normally I'd throw the voting papers in rubbish, but I will vote in favour of selling state assets.
I couldn't stand to listen to whining Russell and Cunliffe stating 90 % were not in favour of selling even though only 1 % of population voted.

[blackcap]

I just had a thought... although its probably illegal... you could pick up all the voting papers that people are "binning" and have some extra votes as its a postal vote and not a ballot one :)

[Daytr]

Aaah yeah its called electoral fraud. Quite illegal unless you are in the State of Florida of course & your brother is the governor! :cool:

[clip]

^hahahahhaa Daytr very good

[Harvey Specter]

Aaah yeah its called electoral fraud. Quite illegal unless you are in the State of Florida of course & your brother is the governor! :cool:Electoral Fraud - its just recycling isn't it. I am sure the Greens would be happy if we did it if it kept them out of landfill.

[warthog]

Please explain why I should waste my time efforts and thoughts on this nonsence vote.
Apart from the redicolous timing

No more ridiculous than your spelling :)


of the referedum and the fact that the outcome is absolutely meaningless

No, it shows everybody what a specific number of people think. Politicians are very keen on dressing up views that support their own agendas as "what NZers think" so this gives everyone a reference point. Sure, turnout may not be high, but it's still a barometer.


I really do not have a strong enough opinion one way or the other.

So if you really cannot make up your mind then don't bother voting. Seems like if there's nothing in it for you, then you sit on your hands so why would this be any different?

[warthog]

My wife and myself will be chucking ours straight in the rubbish bin where they belong we have been shafted enough over MRP and CNU by this Govt not to have any interest in this referendum

This makes no sense at all to the hog.

[warthog]

Now couta1 one must remember that the government did not force you to buy any shares.

Behold, snapiti makes sense!


But I do agree the referedum papers belong in the rubbish bin.

Spoke too soon. Reversion to nonsense :)

[warthog]

I just had a thought... although its probably illegal... you could pick up all the voting papers that people are "binning" and have some extra votes as its a postal vote and not a ballot one :)

Yes illegal but who could tell?

[warthog]

That would cause serious damage to the NZ economy. Winston's option is unthinkable :)
.

And he knows it.

Perfect promise for a politician to make: one that everyone contends he should not keep.

[warthog]

Electoral Fraud - its just recycling isn't it. I am sure the Greens would be happy if we did it if it kept them out of landfill.

Everyone would be happy if rubbish is kept out of landfill.

[warthog]

you must be a very bored warthog if you have nothing better to do with your time than fill out paper work to support some meaningless polictical agenda's

The hog has, how would one say, an outlying early leisurely life.

Actually, it takes about 2 seconds to tick a box and put the paper in the envelope.

And let's face it: doesn't matter how well you are in life, a short walk to the postbox will always do you good!

[Xerof]

you must be a very bored warthog if you have nothing better to do with your time than fill out paper work to support some meaningless polictical agenda's

lol, just remember whose 'meaningless political agenda' forced this non binding referendum in the face of a mandate given at the last election

hence, I will be ticking the YES box.

[amalgam]

Its not often that I put pen to paper..but I couldnt stand seeing the Greens/Labour on TV telling us that they were right.....so a tick in the right box & into the post pronto before I forget

[Jay]

My thoughts exactly Xerof

I wonder how people will vote No that did not vote in th election - can't complain can they, bet there are a few or more

[amalgam]

have to agree.
I voted national not for their asset sales but that was always a well stated by product for voting for them(no hidden agenda there)
By voting in this referedum you are acknowledging it's very exsistance and the need for one.
I wont be voting as this is my way of acknowledging there is no need for one.

Which gives you exactly the same result as as the majority who are not making a stand, but cant be bothered voting......why not a yes vote to say u..p. you to the Greens/Labour

[warthog]

Which gives you exactly the same result as as the majority who are not making a stand, but cant be bothered voting......why not a yes vote to say u..p. you to the Greens/Labour

The hog wonders why there are so many people here who are so obviously miffed by politicians doing what politicians do: proclaiming this and that, claiming to represent this and the other. Whatever.

So chuck your televisions and newspapers away (websites includes), and examine your emotional reaction to referendum questions like this.

Because it is emotional. All this "up yours" and so forth. It's like some kid is teasing you at school and they've got your goat.

Relax a little. Consider the referendum for what it is: a chance for you to have an opinion recorded, whatever it is.

Don't get the hog wrong. There are plenty of smart people here who have been around at least as long as the hog, and probably a few with a healthier net worth to boot, but you Johnny-come-latelies make fools of yourself regularly by being so offended by every last thing.

The hog voted No this time around. Why? Because these assets represent a MASSIVE investment by people who have come before us, for the befit of those that come after them, and they didn't make this sacrifice so a small group of people could make excessive amounts of money from the sale of such assets, and have their investment translated into increases in already overweight private coffers.

But those who invested in MRP and Meridian are underwater, the hog hears in chorus. Yes, but that's not who's going to be making money out of this programme.

Surely that's obvious to everybody here (well, maybe not?).

[Grimy]

Well said Warthog. Agree entirely.

[Stu]

...Where does that trillion dollar figure come from? I didn't know our water was gold-plated!


Obviously if that is your guiding principle for fairness and prosperity, then you couldn't stop at the billions we have in debt to own these assets, govt would need to acquire all electricity infrastructure, and as the govt was running it at a loss it would be impossible for private companies to participate anyway.
But you couldn't stop there in fairness, because poor people have to pay for oil and gas, for food production and supply, for entertainment, and so on, and all of these are owned by nasty corporations and nasty johnny foreigners and are run for profit. Supposedly if the state acquired, at the cost of trillions (doesn't matter how much as apparently it's a money making machine), all these essentials and ran them centrally all our problems would be solved? I wonder if anyone has ever tried this?

As for the referendum, it's another cynical ploy by Green Labour in an attempt to get into power, whatever the cost.

[vorno]

Name of the game, vote yes,put a middle-finger in the envelope & bury your head in the sand!

[Daytr]

' The hog voted No this time around. Why? Because these assets represent a MASSIVE investment by people who have come before us, for the befit of those that come after them, and they didn't make this sacrifice so a small group of people could make excessive amounts of money from the sale of such assets, and have their investment translated into increases in already overweight private coffers. '

Very nicely put Warthog!

[vorno]

' The hog voted No this time around. Why? Because these assets represent a MASSIVE investment by people who have come before us, for the befit of those that come after them, and they didn't make this sacrifice so a small group of people could make excessive amounts of money from the sale of such assets, and have their investment translated into increases in already overweight private coffers. '

Very nicely put Warthog!

If you want National, vote yes.
If you want Labour/Greens, vote no.

Personal Opinions won't feature with the result. We all know what the outcome is going to be anyway.

See, politics is simple!

[Daytr]

Stu, how is it cynical to give the nation a better deal on power? Or are you saying it is cynical as you think they will never carried it out?
Far right or far left agendas never work, there needs to be a balance of both for policy to work for the greater good. What we are seeing under Key is very right wing policy which benefits a few. The future of NZ is in sustainability, not short term make a buck schemes. The Greens love them or hate them are trying to protect what most people in NZ love, the environment such as the bush & ocean most people enjoy. Once it is gone or damaged its usually permanent. Have a look on the Forest & Bird or DOC websites to see how many of species of bird in NZ is on the endangered list & how many have become extinct in the last 50 or so years. NZ is losing its clean green image rapidly overseas & if it continues our tourism, a sustainable industry will feel the brunt.


Obviously if that is your guiding principle for fairness and prosperity, then you couldn't stop at the billions we have in debt to own these assets, govt would need to acquire all electricity infrastructure, and as the govt was running it at a loss it would be impossible for private companies to participate anyway.
But you couldn't stop there in fairness, because poor people have to pay for oil and gas, for food production and supply, for entertainment, and so on, and all of these are owned by nasty corporations and nasty johnny foreigners and are run for profit. Supposedly if the state acquired, at the cost of trillions (doesn't matter how much as apparently it's a money making machine), all these essentials and ran them centrally all our problems would be solved? I wonder if anyone has ever tried this?

As for the referendum, it's another cynical ploy by Green Labour in an attempt to get into power, whatever the cost.

[warthog]

If you want National, vote yes.
If you want Labour/Greens, vote no.

Personal Opinions won't feature with the result. We all know what the outcome is going to be anyway.

See, politics is simple!

No, your summary is simplistic.

The hog doesn't want National/tail-wag-the-dog OR Labour/Green. Much rather have the hog as benevolent dictator.

People see John Key as a bit of a simpleton and the hog must concede that there is much about the man that gives this impression.

However, when faced with certain audiences, the hog has noted, he doesn't pronounce NZ "Noo Zild" but, interestingly-enough says "New Zealand".

Key is a smart player. Smarter than most give him credit for. He is a political chameleon that changes his colours often, appealing to many different segments of voter.

But he is a dangerous politician. Dangerous with a capital D. For pretty much everyone except a small group of people (local and foreign). That includes traditional National voters, farmers, owners of business, workers, etc. Everybody.

TPP is but one example of what Key and others would be very happy to see implemented.

So, as Douglas, Prebble, Hyde and Banks have fooled many hard-working New Zealanders into thinking ACT was a party of the people (the hog met a few of them, who made the Jehovah's Witnesses look like rational atheists) with some measure of generous and honest intent, so Key, the "self-made man", has National voters thinking that he represents their interests.

Oil. Mining. Fracking. Pollution. Asset squandering.

Key is only just getting going.

And remember who he visited at home and told, the evening before the National party leadership contest between English and Brash, that he was backing English for the leadership?

None other than Bill himself.

Nice guy.

[warthog]

I wonder if a Labour govt would buy back MRP shares? I'd be happy to sell back at issue price ;)

Exactly, Belg. There would be a stampede for the exits.

So "no" is the answer.

[Stranger_Danger]

I voted yes to the asset sales basically because I support the current Government, at least over the current alternatives.

I'm actually against asset sales, as a rule, but "yes" was the closest to my view, due to it being a loaded, political, half question.

If you came to me and said "Should I sell my income producing assets?", without any more info, I'd likely say no.

If you then said "Before you answer, I've been supporting my daughter who had kids despite not having a partner or job, I've given my son an interest free loan to do a frisbee throwing degree and my wife has spent the little left over to make our house "more valuable", so now I'm totally tapped out", then yes, you may have to sell some assets.

It was a bollocks question.

A better one would have been "Would you prefer us to sell assets and keep Working For Families, or, keep our assets and kill Working For Families?

You can't make decisions about the asset part of your balance sheet without thinking about the liability side and cashflows. But that is what the question asks you to do. Why? Because that is how people vote.

Today's happy tip : Teach your children Mandarin.

[Longhaul]

I voted yes to the asset sales basically because I support the current Government, at least over the current alternatives.



Sorry, I'm not too informed about this, but can't the government currently borrow money at much lower cost compared to the returns of the assets they sold? If I could get a guaranteed return higher than the cost of borrowing, I'd be a fool not to take the opportunity. So not sure how the current asset sales make any sense - ESPECIALLY since the national party is supposed to have sound economic credentials (doesn't seem like they do).

[ratkin]

The moose voted and mailed back the form the same day as receiving. Why?

because there were, many years before even the building of these power stations, many, many men and women who went overseas to ensure we had the right to make such choices in life. A lot gave their lives in some foreign land to make sure we had the simple right to tick a box and make our voices heard.

Today, I see a mass amount of apathy regarding such issues. People are willing to speak out to their friends and colleagues, but go no further. They forget what these men and women did so many years ago and take it for granted. It makes me quite sick.

So, no matter what your views, please remember why we are allowed to do such things; personal sacrifice.

I am proud to be a Kiwi and Canadian with the right to voice my opinion, even if I don't agree with the operations behind the referendum :)

Provides the illusion of choice, when really there is none

[robbo24]

Provides the illusion of choice, when really there is none

... Except for the last general election.

[warthog]

Provides the illusion of choice, when really there is none

Well Ratkin, if you're a Colin Craig or John Banks voter this time around, the illusion may very well be one of choice.

At least the hog hopes this will be so (not that, as many have pointed out, hope is much of anything to go on).

[sharer]

Gents, have another look at the recent quarterly releases from MRP and Meridian regarding demand and wholesale pricing. Plenty there to take on board.
Yes, & as i wrote somewhere earlier, combination of MRP & Mel could be more attractive than either alone.
Now they're floated, i'm awaiting news leaks about their investing in each other's shares - why not?

[sharer]

I just had a thought... although its probably illegal... you could pick up all the voting papers that people are "binning" and have some extra votes as its a postal vote and not a ballot one :)
Yes Sir illegal, with probability 1.0

But even worse, wouldn't that mean you were joining the swindlers ?

[sharer]

Well said Warthog. Agree entirely.

What he said, well summarized Warthog

[Stu]

Stu, how is it cynical to give the nation a better deal on power? Or are you saying it is cynical as you think they will never carried it out?
Far right or far left agendas never work, there needs to be a balance of both for policy to work for the greater good. What we are seeing under Key is very right wing policy which benefits a few. The future of NZ is in sustainability, not short term make a buck schemes. The Greens love them or hate them are trying to protect what most people in NZ love, the environment such as the bush & ocean most people enjoy. Once it is gone or damaged its usually permanent. Have a look on the Forest & Bird or DOC websites to see how many of species of bird in NZ is on the endangered list & how many have become extinct in the last 50 or so years. NZ is losing its clean green image rapidly overseas & if it continues our tourism, a sustainable industry will feel the brunt.

Better deal on power? By removing all competition? Or taxing the citizens more to subsidize an inherently inefficient system? Or perhaps borrowing billions offshore to fund an election winning and meaningless annual discount which turns out to be even more expensive in real terms? Venezula style?

"Very right wing" in your opinion then is minority ownership in a few state interests. I'm guessing you must have reserved the definitions of the very very very very very right wing, and of course, very very very infinity right wing for anything slightly less than public minority ownership? And anything that's actually right wing comes round in a big circle to National Socialist Workers Party?

As for the Greens, I think you'll find the environmental movement was doing fine without them, apart from the disastrous anti environment policies of their left wing allies (eg the socialist "progress" in the Aral Sea, or the three gorges dam). The Greens simply worked out there was an easy route to power by playing on the emotions of the simple minded. In fact two of the key pieces of environmental legislation of the last century (the EPA and The Endangered Species Act) were both brought in by Nixon, who the left still maintain is anathema to all that is holy.
As for NZs record in the last 50 years? We've had one of the most liberal and left leaning governments in the western world

And are the Greens loudly demanding a massive tax on our oil consumers and polluters? Not likely, too "Unpopular". And where do we get half our oil?
Somewhere sustainable? Which in no way defiles the land it was pumped from? All these foreign workers paid NZ industry union wages? Brought here in sustainable tankers? Which has absolutely no chance of sinking? Err, awkward.
Maybe just concentrate on boycotts of "Texan" companies drilling locally (don't use the term "American" companies, not with a Democrat in power.

[vorno]

...It looks like I'll be needing more popcorn (the Iran thread already has one of my monitors occupied!)

[Daytr]

Stu, what a load of absolute tosh! Those so called inefficient power generators were already owned by the government & making a very strong profit! All I am saying is why not give some of that profit back to all Kiwis in the form of a discount on their power bill. Why would you have to borrow when its coming out of profits? ! Obviously the concept went straight over your head with your rage against the greens etc clouding your judgment, either that or you just aren't very bright. All around the world letting corporations run electricity has been a disaster after disaster & it is then the tax payer that ends up paying for the mess. Ever heard of Enron? In Australia the power companies were incentivized to spend on infrastructure & so what they did was invest hundreds of millions if not billions in unrequired infrastructure, over & above what was needed. Why because there was a buck in it. But by all means run with your short term thinking strategy as no doubt you will come unstuck.

[Stu]

Stu, what a load of absolute tosh! Those so called inefficient power generators were already owned by the government & making a very strong profit! All I am saying is why not give some of that profit back to all Kiwis in the form of a discount on their power bill. Why would you have to borrow when its coming out of profits? !

I think you'll find under Labour the govt fully owned them yet its debt kept growing. And you're suggesting reduce or remove the profit? And you're aware that under your plan, govt owned assets would make very little or no profit? And it would be impossible for private companies to operate.

[Stu]

Obviously the concept went straight over your head with your rage against the greens etc clouding your judgment, either that or you just aren't very bright.
Well, there is at least one other fairly obvious possibility.

[Stu]

All around the world letting corporations run electricity has been a disaster after disaster & it is then the tax payer that ends up paying for the mess. Ever heard of Enron? In Australia the power companies were incentivized to spend on infrastructure & so what they did was invest hundreds of millions if not billions in unrequired infrastructure, over & above what was needed. Why because there was a buck in it. But by all means run with your short term thinking strategy as no doubt you will come unstuck.

Interesting you apparently have all these examples but the best you can find iso Enron? How much did that actually cost the tax payer? And which federal assets was it buying? Best stay away from those recent and very large govt investments in the likes of Solydra eh. ;)

[Stu]

*Solyndra
You seem very selective. And what about 3 Gorges, or the Arral Sea? Or what about every other state run asset or monopoly which doesn't have to report it's spending or results (at least not honestly)?

[robbo24]

Pretty much nailed the issue in two sentences Daytr.

Selling MEL and MRP has benefited a select few ... meanwhile us all receive no benefit whatsoever or stay poor and trapped by a capitalist system.

Capitalism at its finest!

I'm not sure I agree with your analysis belgarion.

The taxpayer benefited most - selling shares in 2 power companies facing uncertain financial futures for a price above what the market has paid for them after the float.

Are you sure you're not just trolling the forums with your socialist views?

[Goldstein]

The problem in my mind is that there is enormous potential with Meridian's assets. Companies like Google and Facebook are switching onto the fact that they need renewables to run their data centres.

If Meridian can secure a new contract with say Google building a data centre down there then the NZ tax payer will see less of the benefit going forward.

[Stu]

The problem in my mind is that there is enormous potential with Meridian's assets. Companies like Google and Facebook are switching onto the fact that they need renewables to run their data centres.

If Meridian can secure a new contract with say Google building a data centre down there then the NZ tax payer will see less of the benefit going forward.

So, on the basis of this speculative guess, you recommend every NZer to be "all in" on Meridian?

[Goldstein]

So, on the basis of this speculative guess, you recommend every NZer to be "all in" on Meridian?

The point is that if Meridian can realise the potential of some very good assets in today's world then the benefit to the tax payer will now be less than if the govt had not partially sold it.

I'm not suggesting the potential will be realised. The fact that the Govt flicked off a chuink is hardly a ringing endorsement.

Disc: Owned MELCA for 6 hours.

[Zaphod]

The problem in my mind is that there is enormous potential with Meridian's assets. Companies like Google and Facebook are switching onto the fact that they need renewables to run their data centres.

If Meridian can secure a new contract with say Google building a data centre down there then the NZ tax payer will see less of the benefit going forward.

That's a great idea and would be fantastic for the country, however unless we offer some significant concessions I can't see any major international data centres being built in NZ. Our low population, geographic isolation (which increases latency) and high risk from natural disaster are significant barriers for this type of activity. Australia is a much more likely locality for such facilities to be built in, with Amazon Web Services data centre in Sydney already commissioned and with Microsoft building their new Azure data centre.

[iceman]

That's a great idea and would be fantastic for the country, however unless we offer some significant concessions I can't see any major international data centres being built in NZ. Our low population, geographic isolation (which increases latency) and high risk from natural disaster are significant barriers for this type of activity. Australia is a much more likely locality for such facilities to be built in, with Amazon Web Services data centre in Sydney already commissioned and with Microsoft building their new Azure data centre.

And don't forget, no fibre network :eek2:

[vorno]

Of course you're free to move to the land of heat & death!

[Goldstein]

That's a great idea and would be fantastic for the country, however unless we offer some significant concessions I can't see any major international data centres being built in NZ. Our low population, geographic isolation (which increases latency) and high risk from natural disaster are significant barriers for this type of activity. Australia is a much more likely locality for such facilities to be built in, with Amazon Web Services data centre in Sydney already commissioned and with Microsoft building their new Azure data centre.

These guys think globally so spreading the risk is what they are about. Data centres can be seismically isolated (the racks can actually move in a couple of directions). Even the lack of local fibre network can be addressed. The real impediment is the single internet gateway to NZ.

Manapouri was bult with a high energy user in mind back in the Muldoon era, and the deregulated NZ market desperately needs a new one.

[Harvey Specter]

These guys think globally so spreading the risk is what they are about. Data centres can be seismically isolated (the racks can actually move in a couple of directions). Even the lack of local fibre network can be addressed. The real impediment is the single internet gateway to NZ.

Manapouri was bult with a high energy user in mind back in the Muldoon era, and the deregulated NZ market desperately needs a new one.even a Google sized server farm would not replace Tiwai usage.

[Xerof]

RIO announced late last week that they have mothballed their Gove aluminium smelter.

[Goldstein]

even a Google sized server farm would not replace Tiwai usage.

It would replace one 'pot line' though.

Meridian contracted to supply 572 MW to Tiwai Pt.

A 100,000 server data centre may require 500W to power each server and say another 500W to cool to make the maths easy.

That's 100MW.

[Snow Leopard]

It would replace one 'pot line' though.

Meridian contracted to supply 572 MW to Tiwai Pt.

A 100,000 server data centre may require 500W to power each server and say another 500W to cool to make the maths easy.

That's 100MW.

A 100,000 server centre would be one of the larger centres in the world and with modern equipment and the NZ climate would actually consume about 30MW running at near capacity.

Heaven only knows how you would currently pipe the quantity of data (requests and responses) between NZ and the rest of the world that would justify such a size.

Best Wishes
Paper Tiger

[warthog]

A 100,000 server centre would be one of the larger centres in the world and with modern equipment and the NZ climate would actually consume about 30MW running at near capacity.

Heaven only knows how you would currently pipe the quantity of data (requests and responses) between NZ and the rest of the world that would justify such a size.

Best Wishes
Paper Tiger

Actually, you can't see what's over the horizon, PT. Of everyone here, you should be one of those who instinctively (feline genes) knows this is the case.

So quite a lot of what the hog thinks is going to happen in the future is processing. Huge number-chrunching facilities, which are given data to work on, but spit out only relatively small amounts of data.

Think Bitcoin. If PT had established a Bitcoin-mining operation next to Manapouri (with a contract for heavily-discounted power) in the early Bitcoin days, the coins would be ... virtually (see what the hog did there?) rolling in, and at quite a favourable cost.

Additionally, the connections between NZ and the rest of the world can only improve.

Especially with TEL/CNU starting to look like marginal players (CNU marginal in the sense that it loses much of the control over its destiny).

Interesting things are happening in the north of Sweden and Norway.

[Zaphod]

These guys think globally so spreading the risk is what they are about. Data centres can be seismically isolated (the racks can actually move in a couple of directions). Even the lack of local fibre network can be addressed. The real impediment is the single internet gateway to NZ.


Internationally, NZ is regarded as a higher-risk deployment environment for data centres. Nationally, Hamilton has the lowest risk profile, but the latency to major markets is still a major issue that won't be rectified through the provision of additional redundant international connectivity links.

Disc: Data centre design and build has been part of my professional duties for over a decade.

[Goldstein]

A 100,000 server centre would be one of the larger centres in the world and with modern equipment and the NZ climate would actually consume about 30MW running at near capacity.

Heaven only knows how you would currently pipe the quantity of data (requests and responses) between NZ and the rest of the world that would justify such a size.

Best Wishes
Paper Tiger

I guess it depends on the use. My day job concerns atmospheric modelling and we rent hardware in US data centres to get the compute close to the input data, and the output close (in terms of latency) to the clients.

The specs of the servers we use for modelling are a lot more power hungry than standard kit..

Generally the output is serveral orders of magnitude less than the input.

The price of running the stuff in the US is very cheap as well - cheaper than here.

I don't know what sort of kit or algorithms Google and FB etc use to run their market analytics. It might be quite different to what I'm assuming.

All of this was just to suggest another high energy user is possible.

[warthog]

Internationally, NZ is regarded as a higher-risk deployment environment for data centres. Nationally, Hamilton has the lowest risk profile, but the latency to major markets is still a major issue that won't be rectified through the provision of additional redundant international connectivity links.

Who would ever claim that redundant connectivity improved latency?

The hog can think of at least three occasions where data were sent back to Europe for processing by visiting academics because the computing resources are simple not available here.

[Zaphod]

Actually, you can't see what's over the horizon, PT. Of everyone here, you should be one of those who instinctively (feline genes) knows this is the case.

So quite a lot of what the hog thinks is going to happen in the future is processing. Huge number-chrunching facilities, which are given data to work on, but spit out only relatively small amounts of data.

Think Bitcoin. If PT had established a Bitcoin-mining operation next to Manapouri (with a contract for heavily-discounted power) in the early Bitcoin days, the coins would be ... virtually (see what the hog did there?) rolling in, and at quite a favourable cost.

Additionally, the connections between NZ and the rest of the world can only improve.

Especially with TEL/CNU starting to look like marginal players (CNU marginal in the sense that it loses much of the control over its destiny).

Interesting things are happening in the north of Sweden and Norway.

There are certainly some niche markets that NZ could capitalise on that don't require the transfer of huge data sets and would be enabled by cheap power and a relatively free and abundant supply of coolant, but they are certainly well on the horizon and I suspect that the countries like Sweden and Norway are the most likely candidates for those types of services at this point.

Perhaps if NZ remained relatively neutral, abandoning the five-eyes alliance and not siding with the US through the TPP, we would see more activity in this sector. That of course, would be a big ask!

[Goldstein]

Who would ever claim that redundant connectivity improved latency?.

I would. If you are approaching a bandwidth limitation then real latency can be affected. By having another pipe out of the country you alleviate this.

It's like bonding network ports on a LAN. You mostly do this for the additional throughput not the redundancy.

[Zaphod]

Who would ever claim that redundant connectivity improved latency?

The hog can think of at least three occasions where data were sent back to Europe for processing by visiting academics because the computing resources are simple not available here.


You could argue from the perspective that the redundant links could be configured as being load-balanced or teamed and providing the primary link is saturated, latency would fall as a result. But I think we're going to get awfully technical for a thread about Meridian.

As for data sets being sent back to Europe for processing, I agree that there's a nascent market there, but is it at the point where we can capitialise on it? Probably not at the moment but as a country, it would be good to have a strategy to attract niche services.

[sideline]

.............
Manapouri was bult with a high energy user in mind back in the Muldoon era, and the deregulated NZ market desperately needs a new one.

That would be the electric car.

[Snow Leopard]

....But I think we're going to get awfully technical for a thread about Meridian....

Actually, it seems that between us we have reached consensus that NZ is the place to build and operate a large computational intensive server array to confirm whether Deep Thought (http://hitchhikers.wikia.com/wiki/Deep_Thought) was actually right.

Best Wishes
Paper Tiger

[sideline]

Actually, it seems that between us we have reached consensus that NZ is the place to build and operate a large computational intensive server array to confirm whether Deep Thought (http://hitchhikers.wikia.com/wiki/Deep_Thought) was actually right.

Best Wishes
Paper Tiger

The answer will still be 42!

[CAM]

Maybe they should set up and mine for bitcoins?? :D

[warthog]

I would. If you are approaching a bandwidth limitation then real latency can be affected. By having another pipe out of the country you alleviate this.

It's like bonding network ports on a LAN. You mostly do this for the additional throughput not the redundancy.

You're not seriously suggesting equivalence between LAN network ports and international links (other than in complete abstract) are you?

[Goldstein]

You're not seriously suggesting equivalence between LAN network ports and international links (other than in complete abstract) are you?

No. It was just an exmaple to disprove your assertion that bandwidth and latency are not related.

[Beagle]

Market seems to be starting to reflect the fact that if the wholesale power prices are under severe pressure due to abundent over-supply dividends will also be under pressure.
Maybe the Directors will suddenly discover that the best use of available funds is buying back the company's own shares AKA deliberate price manipulation to suit the Gov't's own purposes in terms of trying to float Genesis.

[warthog]

Why not?

Content being shipped around the I-net is so huge nowadays why not develop link aggregation (http://en.wikipedia.org/wiki/Link_aggregation) into all NZ networks and into the cloud. IT's pretty much eliminate latency for everything except the smallest resources (files) and these will most often be responses to human entry (e.g. forms) that the human eye couldn't tell any difference to where the servers were in the world.

Link aggregation technologies combined with local caching servers would mean that NZ could host huge data centres.

Oh come on you people with too much time.

This is like suggesting people use bicycle inner-tubes rather than condoms. More than theoretically possible and maybe even tried by some individuals whose curiosity got the better of them.

But just to spell it out: international link aggregation to NZ with multiple carriers simply will not happen.

If it does the hog will shout you a feathercoin or two (which may be worth a mint by that time).

[Goldstein]

Why not?

Content being shipped around the I-net is so huge nowadays why not develop link aggregation (http://en.wikipedia.org/wiki/Link_aggregation) into all NZ networks and into the cloud. IT's pretty much eliminate latency for everything except the smallest resources (files) and these will most often be responses to human entry (e.g. forms) that the human eye couldn't tell any difference to where the servers were in the world.

Link aggregation technologies combined with local caching servers would mean that NZ could host huge data centres.

Not sure about that BG. Still have to connect to the 'cloud'. Wish I hadn't used that example now..

A nice thought though is if the capital the Govt has raised from these sales would go to improving the infrastructure (in particular another link to Sydney). I would then support the asset sales unreservedly.

[silu]

Glad I removed my buy order at 95 cents. It's pretty murky and do not intend to swim against the stream at this stage.

[winner69]

MELCA just showed me the benefits of technology

Clever P&F can cope with free falling stocks and adjust scales automatically - but heck the graph paper way is hard yakka as had to stick another piece of paper at the bottom to accommodate a 95 price .....should have started further up the page eh but heck never thought it would go this low

[percy]

MELCA just showed me the benefits of technology

Clever P&F can cope with free falling stocks and adjust scales automatically - but heck the graph paper way is hard yakka as had to stick another piece of paper at the bottom to accommodate a 95 price .....should have started further up the page eh but heck never thought it would go this low

Made my day.!!!
Years ago I did charts and had to do moving average sums the hard way.Always there was adding paper to the top or the bottom,even after altering the scale.
Now days select whatever ma you want.Used to cut articles out,save all annual reports.Had drawers full of paper.All fine until I wanted to find something.Spent hours looking for bits of paper I had saved.
Often wondered if the small volumes on illiquid stocks meant I was wasting my time.

[Goldstein]

Glad I removed my buy order at 95 cents. It's pretty murky and do not intend to swim against the stream at this stage.

Don't forget MRP is down nearly 20% on the issue price while MELCA is down 5%. So there's probably a bit more to go. The shares have behaved rather similarly so far.

[peat]

im sitting in front of five computer screens
trying to support the share price all by yourself. :p

[Goldstein]

Glad I removed my buy order at 95 cents. It's pretty murky and do not intend to swim against the stream at this stage.

Don't forget MRP is down nearly 20% on the issue price while MELCA is down 5%. So there's probably a bit more to go. The shares have behaved rather similarly so far.

[vorno]

I'm sticking with my shares out of principle. Even if they drop to 50c

[troyvdh]

dear Peat...excellent post.

[TimmyTP]

I'm sticking with my shares out of principle. Even if they drop to 50c
Your alternative would be to sell now, then buy back @ 50c to double your principles.

[percy]

im sitting in front of five computer screens, several live databases , multiple graphs and one of my custom apps even speaks to me about stock prices and movements real time.. the app is customisable from a simple text file with a very simple statement format ....

"draws full of paper" ?

really percy for someone with such a capable mind :)

Mind a bit affected by the sun and sounds of the ocean here at Top Ten Holiday Park at Greymouth.
Bit hard to believe I am busy working. The trouble of having the best job in NZ.Another evening of watching the sun set over the ocean.
Drawers out the best in me.! lol.

[Snoopy]

MELCA just showed me the benefits of technology

Clever P&F can cope with free falling stocks and adjust scales automatically - but heck the graph paper way is hard yakka as had to stick another piece of paper at the bottom to accommodate a 95 price .....should have started further up the page eh but heck never thought it would go this low


The fact that Meridian (MELCA) was an installment receipt meant that it was always going to be more volatile than the ultimate underlying share (MEL). Add to that the political shenanigans that has seen power companies used as political footballs and I saw it as inevitable that, at some point, MELCA would trade under the installment receipt issue price. But fear not fellow power company investors. MEL is a soundly run business and one day in the far distant future it will be a growth company again. To anyone thinking of selling out at a loss at 95c, I would suggest the alternative strategy of scooping up those dividends and holding onto your hat.

SNOOPY

discl: do not hold MELCA

[peat]

I'm sticking with my shares out of principle. Even if they drop to 50c
What principle?

[vorno]

What principle?

My principle belief in the company itself, instead of peoples "fears" guiding the way. They're a good company & I believe in it.
...So if the SP dropped to 50c tomorrow it would not bother me unless a massive catastrophic failure occurred such as a giant wind-turbine eating moth comes along!

[GTM 3442]

Don't forget MRP is down nearly 20% on the issue price while MELCA is down 5%. So there's probably a bit more to go. The shares have behaved rather similarly so far.

As I recall, CEN floated at $3.10 (way, way back, when I still had hair), and I also recall buying in at $2.50/$2.55, which represented about a 15-20% discount.

So MRP/MELCA are behaving as my previous experience would suggest. So MRP at about $2 seems reasonable, as does MELCA in the low eighties.

So MRP at $4 and MEL at $3 in 2025 with lots of lovely lovely dividends along the way seems not too far out of whack from what I see in the rear vision mirror. . . .

[vorno]

dont spend two much time looking in the rear view mirror cause you might not see the bus full of labour and green mp's you are about to run into.

increase speed, use the nos!

[troyvdh]

Gee GTM ...well done for posting what you did....as an aside me thinks that folk should read Carmel's post in the sunday post....

like I mean the nats sales at SP highs of various entities to the public should in deed be applauded ...for a job well done.

[mouse]

Water is the new Liquid Gold, except when its run through hydro turbines. In which case we can see it has little value. Kiwis are lining up to sell, to overseas buyers, at a loss from what they have paid. If I had spare cash, which I do not, I would jump in now. Or maybe later, since it must be a buy. Particularly when the dividend yield is considered.
BUT, maybe Mum and Dad investors should have just put their cash into a Kiwi Bank Deposit account.

[janner]

Water is the new Liquid Gold, except when its run through hydro turbines. In which case we can see it has little value. Kiwis are lining up to sell, to overseas buyers, at a loss from what they have paid. If I had spare cash, which I do not, I would jump in now. Or maybe later, since it must be a buy. Particularly when the dividend yield is considered.
BUT, maybe Mum and Dad investors should have just put their cash into a Kiwi Bank Deposit account.

Maori see water passed through Hydro turbines as Liquid Gold.. They see it as much value..

Hope to see you at all the many, many, many, hearings ( Tax Payer funded )

Explaining and expanding on your views mouse !!..

[GTM 3442]

dont spend two much time looking in the rear view mirror cause you might not see the bus full of labour and green mp's you are about to run into.

So with your wipers running full speed, your headlights on high beam, the fog lights on, and the spotlight as well (just for good measure), perhaps you could give us some insight into exactly what you do see ahead ?

If the "bus full of labour and green mp's " actually manage to implement "Kiwitricity" or whatever, I see a "cost-plus" model which, looking at the history of New Zealand business, is a sure-fire recipe for guaranteed dividends as long as the regime lasts.

And I am a great fan of guaranteed dividends . . .

[janner]

So with your wipers running full speed, your headlights on high beam, the fog lights on, and the spotlight as well (just for good measure), perhaps you could give us some insight into exactly what you do see ahead ?

If the "bus full of labour and green mp's " actually manage to implement "Kiwitricity" or whatever, I see a "cost-plus" model which, looking at the history of New Zealand business, is a sure-fire recipe for guaranteed dividends as long as the regime lasts.



And I am a great fan of guaranteed dividends . . .

Not to sure whether you are taking the P%@s or whether you are the last of the OLD GUARD ..

Agree .. Let us all have a guaranteed 10 % plus.. Like it used to be !!..

Bring back Muldoon ..

[GTM 3442]

Not to sure whether you are taking the P%@s or whether you are the last of the OLD GUARD ..

Agree .. Let us all have a guaranteed 10 % plus.. Like it used to be !!..

Bring back Muldoon ..

Dead serious, sadly Janner.

As soon as the basis for pricing is "cost-plus", all you have to do is manipulate the presentation of your costs to the regulator and Bingo ! ! !

How does it go ? Ah yes !

"Dear Sir,

We regret that increases in the cost of "P%@s", we are faced with no option but to increase our prices.

The increase has been approved by "Kiwitricity", and will take effect from the start of your next weekly billing cycle.

Yours Ever So Sincerely
etc etc etc"


It's been a few years since I wrote one of those, but I'm glad to see the old magic's still there. ;)

[Harvey Specter]

Dead serious, sadly Janner.

As soon as the basis for pricing is "cost-plus", all you have to do is manipulate the presentation of your costs to the regulator and Bingo ! ! !
. ;)the problem is they want it based on original cost!

[Arbroath]

MEL great long term hold but the eventual closure of Tiwai point spooks the %^&$ out of me and will weigh heavily on the stock.

I attended a conference recently where a industry connected CEO shared his personal view that Tiwai would not be closed. He feels it is all bluster from Rio due to the high quality of product Tiwai produces and the huge commitments to close/re-open through a commodity cycle. Now arguably the commodity cycle is near the bottom and Rio have negotiated hard to lower their input costs but have still kept it open. Rio also have a track record, like BHP, and other large multi-nationals of negotiating hard for their interest so what did we expect to happen given the situation around the MEL float?

I agree with the CEO that Tiwai will be with us for the long-term unless the commodity price falls another 20-30%, which I admit it could. Real money is made when you call these situations correctly.....fingers crossed. And if does close MEL is well placed medium term to wear it and prosper.

[vorno]

great post and tend to agree that RIO made the most of the timing to screw our government.

To gain a bigger perspective one must remember that it is the largest employer for Southland.

If Tiwai goes under there will be a lot more to worry about than the MEL SP. A huge ripple-effect would take its due!

[vorno]

hmmmm me thinks you are being blinded by government propaganda.
Southland dairy farmers have a massive shortage of available workers 2000 +

Perhaps, but that would still mean that a lot of people would actively need to move in order for that to work. Not to mention a change of profession!

I stand by my comment!

[Harvey Specter]

hmmmm me thinks you are being blinded by government propaganda.
Southland dairy farmers have a massive shortage of available workers 2000 +I dont think those high paid employees at Tiwai would like to slog it out for farmers wages.

[mouse]

I attended a conference recently where a industry connected CEO shared his personal view that Tiwai would not be closed. He feels it is all bluster from Rio due to the high quality of product Tiwai produces and the huge commitments to close/re-open through a commodity cycle. Now arguably the commodity cycle is near the bottom and Rio have negotiated hard to lower their input costs but have still kept it open. Rio also have a track record, like BHP, and other large multi-nationals of negotiating hard for their interest so what did we expect to happen given the situation around the MEL float?

I agree with the CEO that Tiwai will be with us for the long-term unless the commodity price falls another 20-30%, which I admit it could. Real money is made when you call these situations correctly.....fingers crossed. And if does close MEL is well placed medium term to wear it and prosper.

What will happen first is that Rio will make an offer we cannot refuse to BUY Manapori. They will not walk away without a great struggle, from them, to get us to sell. All of our cash would then be returned to us, but we would have lost a major generation plant. Water is Gold.

[Beagle]

Anyone noticed the price of Aluminium has slipped from ~ $1,800 a ton too $U.S1,700 since this company was floated.
Also Labour / Greens seem to be getting stonger. From memory one of the lead brokers reckoned a Labour Greens power price intervention was worth approx 63 cents off the SP.

I think that could be what Snapiti is referring too with the Labour Greens "bus" that's coming.

Astute observers will have noticed the wholesale power prices across the country are already under intense downward pressure due to excess supply and we have negative power consumption trends from both business and retail customers and that's before we even start talking about the new generation capacity that's locked into coming on stream in the next year ot two. (Genesis Gas fired plant near Taupo being one example)....and yet for some strange reason people think the forcasted divdends outlined in the offer documments are cast in stone, go figure ? Perhaps they should have a chat with Chorus investors about how secure their divdends have turned out to be.
God only knows what happens to the wholesale power price if / when Rio Tinto pull the plug and there
s circa 14% of the entire nation's power supply as a further unallocated surplus, assumming Transpower can wire up another set of lines to transmitt it ?

Disc, don't own but wish it was easy to go short on this stock.

[vorno]

To quote Meridian Energy

"This is a long-term investment".

I'll like to see where this thread is at 10 years from now :)

[Beagle]

^^ Possibly higher than where it is today but perhaps more to the point, perhaps dramatically higher than where it will be in the near future when :-
a) If / When Labour Greens get into power and work their "majic" on retail power pricing
b) People, (who may already be heavily underwater on their investment) have to write another cheque for this stock for their second tranche of payment
c) If / when Rio Tinto announce they're closing the smelter and this company confirms it doesn't have the ability to supply the excess power to the national grid for another few years.

Granted if people stick their head in the sand for long enough and pretend everything's alright, it might all come out in the wash for them okay, eventually...

[Goldstein]

Are buyers picking up shares now under 1.00 getting all the entitlements that those who bought at the IPO were getting?

I thought the only entitlement was the fact that they are instalment receipts - or am I missing something?

So as I write this you can purchase MELCA for $0.90, with $0.50 payable in 18 months or whenever.

Note that the price is now sitting at 140/150 = 93% of IPO, NOT 90/100 = 90%. So has a way to go yet to match MRP

[vorno]

Are buyers picking up shares now under 1.00 getting all the entitlements that those who bought at the IPO were getting?

I believe I read a passage explaining that once instalments have traded hands on the market, their dividend rate gets slashed?
May need some clarity in this area, I might very well be mistaken.

[silu]

Are buyers picking up shares now under 1.00 getting all the entitlements that those who bought at the IPO were getting?

Yup that's how I see it.

[silu]

As I understand is that if you sell all your MELCA and then buy back you lose the price cap. But if you add to your IPO holding you get it.

[silu]

I'm confusing myself now. Who here has a personal broker they can ask?

[cyclist]

The retail price cap was $1.60. Since the IPO price was set lower at $1.50, I don't believe the retail price cap is relevant in any way now.

[Harvey Specter]

I assume everyone who doesn't know the answer doesn't currently hold? IPO holders get no special benefits for MEL. For MRP, they are entitled to bonus shares worth 4% from memory.

[silu]

I'm pretty sure now that it doesn't matter how many MELCA shares you bought at IPO or at what price you bought them at that in May 2015 you have the option of either paying another 50c ea to get the full share or sell your installments.

[silu]

Either way I added to my small IPO holding today at 89c. I usually don't buy in a downtrend but sometimes I like acting a little irrational.

[Bobcat.]

Yes, tempting. I have noticed before however that after an Equity market correction, utilities initially drop in price but then recover as investors decide they are a more reliable, safe haven in a bear market.

I'm sitting on my hands with MELCA for now...anticipating a sharp correction on the DJIA and S&P500 prior to Christmas. China and Japan stockmarkets IMO will weather that correction better than most - it will be interesting to see what happens here more locally.

Another downward pressure on MELCA and MRP is the negative foreign investor sentiment around CNU. That sentiment seems to be growing and probably won't subside until CNU and CFH negotiate a contract variation more favourable to CNU. Until then, I think the Bears could be in control.

BC

[Beagle]

I believe all risks considered, in a low / no / negative growth industry its a PE 13-14 stock worth around $1.00, someone forgot to tell the Govt there shouldn't be a final 50 cent payment :)

This nonsense of brokers valuing a no growth stock with all those risks as being worthy of a price earnings ratio of well over 20 is complete nonsense and couldn't possibly have anything to do with the $100m plus of fees they've received could it....NO, I'm absolutly convinced one has nothing whatsoever to do with the other, (sarcasm intended).

Gullible investors have been robbed, there...someone finally called it for what it was.

I'm interested in buying if / when these partly paid shares hit 50 cents.

[axe]

Does anyone know when the interim and full year dividend dates are for Meridian???

[troyvdh]

dear roger...you do have quite firm opinions..on a variety of issues ..well done ..so do I .

However ...disclosure is a wonderful thing is it not...I believe that I have disclosed my holdings in the past....have you....cheers troy

[Hoop]

Does anyone know when the interim and full year dividend dates are for Meridian???

http://i458.photobucket.com/albums/qq306/Hoop_1/MeridianKeydates20132014.png (http://s458.photobucket.com/user/Hoop_1/media/MeridianKeydates20132014.png.html)

[axe]

Thanks hoop

[Bobcat.]

http://i.stuff.co.nz/business/industries/9485537/NZ-branded-as-risky-as-Pakistan

"BNY Mellon, a holding company for fund managers including Newton, said its related entities had sold 1.5 million Chorus shares on December 4, contributing to a drop in its stake from 7.5 to 6.3 per cent"

At the very least I would say BNY Mellon would want to sell down to under 5%. A definite overhang.

[sideline]

"BNY Mellon, a holding company for fund managers including Newton, said its related entities had sold 1.5 million Chorus shares on December 4, contributing to a drop in its stake from 7.5 to 6.3 per cent"

At the very least I would say BNY Mellon would want to sell down to under 5%. A definite overhang.

Bobcat,
BNY Mellon is NOT the ultimate beneficial holder of the shares. They issue the Chorus ADR (Symbol: CHRYY), which enables trading in Chorus on the US markets. They hold the CNU shares as backing for the CHRYY they have issued (ratio 5 CNU to 1 CHRYY).
So the reduction in their holding means that quite a few holders of those ADRs (probably mostly US fund managers diversifying internationally into 'safe' utilities in 'safe' jurisdictions) have sold their CHRYY causing BNY Mellon to cancel those ADRs and selling the CNUs no longer required.
I doubt BNY Mellon makes any investment decisions here, they are mainly arbitrating and collecting fees for providing the service.

I would think their holding in MELCA will be for a similar arrangement, though I could not find a Meridian ADR.

[Beagle]

dear roger...you do have quite firm opinions..on a variety of issues ..well done ..so do I .

However ...disclosure is a wonderful thing is it not...I believe that I have disclosed my holdings in the past....have you....cheers troy

There you go. Disc don't hold Meridian and also arn't short but probably should be.

[iceman]

While not directly related to Meridian, this http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11168422
is a good article from Gaynor suggesting Kiwibank should be partially floated rather than Genesis. He's got a valid point !
But no doubt that will not happen. After implementing Anderton's idea creating Kiwibank, Cullen has now moved fulltime to NZ Post to completely finish it off !!!!

[macduffy]

Yes, Kiwibank's been an obvious candidate for privatisation. The most likely reason for not doing so is that the govt doesn't want to attract any more flak! Imagine the uproar from certain quarters - " the Aussies will gain control" - "Labour created it, now National's giving it away".

No, they don't need that coming into election year!

[iceman]

we see govt for what they are - poor managers of our national assets.

So we should be glad they sold them then and got what at this stage looks to be a bloody good price for the Crown !

[777]

Oram failed to take into account the tax the government will collect from the dividends received by the 49% holders.

I also note that an overseas commentator stated that NZ now ranked below Pakistan for investing. All to do with political interference no doubt.

[kyanar]

Would that be the fund manager that purchased pretty much 8% of Meridian when it was at record high, and would be taking a bath now that it's low 90s? I can see why they wouldn't like our markets!

[Harvey Specter]

Once again another ill-informed statement ... Rod Oram on the subject ...

Worse, it is selling income-producing assets and reinvesting in non-income producing assets. Treasury estimates forgone dividends over the next five years will be $810m, while interest costs will be reduced by $780m. So the Government will be $30m worse off over five years because of the floats.

http://www.stuff.co.nz/business/opinion-analysis/9485502/SOE-sales-a-report-card

And not just Rod either, even Treasury concluded the same thing!given low demand, there is a risk dividends will be lower, and if we didn't get the govt budget/debt under control, the interest rate could have gone up.

[ScrappyO]

so the greens want to keep the next instalment. At least it's not another negative I suppose.

[noodles]

so the greens want to keep the next instalment. At least it's not another negative I suppose.

Have you got a link to that announcement?

[winner69]

Think Norman was raving on about it on the TV One news at 6 .... wasn't really paying attention

[ScrappyO]

Have you got a link to that announcement?

it was on one news.

[blackcap]

so the greens want to keep the next instalment. At least it's not another negative I suppose.

What do they mean, keep the next installment? So people hold partly paid shares in perpetuity?

[couta1]

What do they mean, keep the next installment? So people hold partly paid shares in perpetuity?
Sounds correct blackcap holders will continue to get full dividends while the Greens pay your 2nd instalment for you but you will only ever be able to sell your instalment receipts, sounds like a typical Green Party idea!!!

[ScrappyO]

http://www.scoop.co.nz/stories/PA1312/S00182/green-party-proposal-will-keep-more-meridian-in-public-hands.htm

[Harvey Specter]

http://www.scoop.co.nz/stories/PA1312/S00182/green-party-proposal-will-keep-more-meridian-in-public-hands.htmSounds fine to me, it is an optional, proportional share back.

Devil will be in the detail but it cant be worse that IFT latest attempt.

[Master98]

What do they mean, keep the next installment? So people hold partly paid shares in perpetuity?

My understanding is Green want shareholders to sell part of their shares to government at current fully paid shares price ( at record date )to pay their second installment 50cps,or you can choose to pay second installment to retain all your partial paid shares.

[okane]

Re-Nationalisation by stealth? Jesus, just make it worse for our investing image will ya Wussell?!?! getting compared to Pakistan not good enough for you? lets go for Afghanistan eh?

Why do you call him "Wussell"? Is it because greens have an association with homosexuality? To my mind a lisp has a stronger association with the British aristocracy, who are usually right wing.

The most prominent politician with a lisp in New Zealand is Rodney Hide, again a conservative not a liberal.

[robbo24]

Sounds fine to me, it is an optional, proportional share back.

Devil will be in the detail but it cant be worse that IFT latest attempt.

So the communists are going to hold to ransom the price of MEL by threatening their electricity purchasing policy, then act like good guys for buying it up cheaply - what a crock.

[Harvey Specter]

Wrong. The govt is still rock solid with a low debt to income ratio.

The rest of NZ though (excluding govt) has borrowed too much.
I did say COULD. We borrowed a lot for CHCH and if something else major happened, we would be thankful for selling assets at their peak to reduce debt.

Imagine if all those quakes in Seddon were a bit further north :0

[okane]

because hes Wussell from the Wild West and has no clue about how to operate a free market economy. bit touchy today are we?

im not a misanthropist; i hate all politicians equally :)

I see. I genuinely thought there was a reason why you think lisping is amusing as ad hominem but now I see it's just an all purpose insult because you don't agree with his politics.

[winner69]

Just like Australia has a Mr Wabbot as PM

[axe]

Just like Australia has a Mr Wabbot as PM


Is he a "wascally wabbit"?

[Harvey Specter]

So the communists are going to hold to ransom the price of MEL by threatening their electricity purchasing policy, then act like good guys for buying it up cheaply - what a crock.True. But given lots of people will probably sell down at least part of their holding to pay for the final instalment, this 'plan' removes a substantial overhang from the market prior to due date.

In fact, Key should probably adopt it - he probably loves the idea as a trader but He couldn't suggest it himself as it would be another 'crony capitalism' idea.

[zigzag]

Why do you call him "Wussell"? Is it because greens have an association with homosexuality? To my mind a lisp has a stronger association with the British aristocracy, who are usually right wing.

The most prominent politician with a lisp in New Zealand is Rodney Hide, again a conservative not a liberal.

No. It's just a mix of Russell and Weasel.

[Goldstein]

So the communists are going to hold to ransom the price of MEL by threatening their electricity purchasing policy, then act like good guys for buying it up cheaply - what a crock.

Can't let that one go.

The Greens all along have said they are completely opposed to the asset sales, just as National have said they want to push ahead with them. The Greens are trying to come up with solutions to support their stance and good on them. We get to vote next election.

If you think this is a crock robbo24, then you are welcome to leave NZ for a more suitable polictal climate such as Zimbabwe.

[robbo24]

Can't let that one go.

The Greens all along have said they are completely opposed to the asset sales, just as National have said they want to push ahead with them. The Greens are trying to come up with solutions to support their stance and good on them. We get to vote next election.

If you think this is a crock robbo24, then you are welcome to leave NZ for a more suitable polictal climate such as Zimbabwe.

Thanks I'll consider leaving for a more suitable "polictal" climate.

I'm certainly not impressed by the idea that opposition parties bring about a drop in share price with politically oriented threats with the clear intention of using that drop in price to buy up the shares later.

You don't seem to refute my idea of what the Greens are doing - which seems to verify my notion.

If they weren't proposing to buy on behalf of the Crown (if elected) then they would arguably fall fowl of the legislative prohibition on making statements intended to manipulate the market.

[Goldstein]

Thanks I'll consider leaving for a more suitable "polictal" climate.

I'm certainly not impressed by the idea that opposition parties bring about a drop in share price with politically oriented threats with the clear intention of using that drop in price to buy up the shares later.

You don't seem to refute my idea of what the Greens are doing - which seems to verify my notion.

If they weren't proposing to buy on behalf of the Crown (if elected) then they would arguably fall fowl of the legislative prohibition on making statements intended to manipulate the market.

The problem is that one political party has pushed ahead with the asset sales, while other major parties are opposed. It was National who has made this a politcal football. The Greens (regardless of whether we agree with them) are quite within their rights to come up with policies to support their agenda. They are not doing it to manipulate the SP of any of the SOEs - to suggest that is rediculous. Also to suggest the Greens are making us an unattractive investment destination is also a load of rubbish.

I'll remind you all:

(i) We have MMP.
(ii) The asset sales were clearly opposed by other major political parties.

Any savvy investor would have considered this. To take this out on one politcal party shows how narrow minded some of you are.

[Harvey Specter]

The problem is that one political party has pushed ahead with the asset sales, while other major parties are opposed. It was National who has made this a political football. The Greens (regardless of whether we agree with them) are quite within their rights to come up with policies to support their agenda. They are not doing it to manipulate the SP of any of the SOEs - to suggest that is ridiculous. Also to suggest the Greens are making us an unattractive investment destination is also a load of rubbish.Given the rest of your post, I am not sure how you can say National have made this a political football. They campaigned on it and under MMP, they won. To say they cant progress with the one of their main policies they campaigned on is just wrong.

Greens can do what they like, and I think it is good they come up with their policies in advance. However, the timing of the KiwiPower announcement was a bit disingenuous. It was clearly planned as a political stunt. It wasn't very well thought out despite the amount of time they had to come up with it and the amount of time and taxpayers money they had invested in the referendum, which again, is just a political stunt.

Price holding steady at the moment.

[Goldstein]

Given the rest of your post, I am not sure how you can say National have made this a political football. They campaigned on it and under MMP, they won. To say they cant progress with the one of their main policies they campaigned on is just wrong.

Greens can do what they like, and I think it is good they come up with their policies in advance. However, the timing of the KiwiPower announcement was a bit disingenuous. It was clearly planned as a political stunt. It wasn't very well thought out despite the amount of time they had to come up with it and the amount of time and taxpayers money they had invested in the referendum, which again, is just a political stunt.

Price holding steady at the moment.

The point is that unless National had agreement from the other parties it was always going to become a political football. There are some things that are bigger than a single political party. What did National think was going to happen? Once the SOEs are sold, job done?

I agree that the Greens have been scrambling, probably to take any impetus away from Labour.