MEL - Meridian Energy

[Harvey Specter]

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?But surely that is the purpose of the election. Under MMP, you are never going to get 75% (or 66% or whatever special vote % you can think up). You cant stop a country progressing.

On the same basis, Labour shouldn't be allowed to increase the retirement age to 67 if they get in as National oppose.

[Goldstein]

But surely that is the purpose of the election. Under MMP, you are never going to get 75% (or 66% or whatever special vote % you can think up). You cant stop a country progressing.

On the same basis, Labour shouldn't be allowed to increase the retirement age to 67 if they get in as National oppose.

I'm not sure they are the same. Should one political party support making NZ a repbulic and then when in power assume they have the mandate to start the process, even when there maybe 50% of the country opposed?

I undserstand what you are saying - just because we have MMP shouldn't stop the govt from doing effective governance.

However, I stand by my claim that it is not the Green's fault that we are now in the situation we are in. They may have been a bit naive with the kiwi-power idea, and that was probably a knee-jerk reaction to the sales going ahead. I think this latest idea of the partial buy-back has more teeth. We shouldn't denegrate them for it. They are putting up alternatives.

[Harvey Specter]

I think this latest idea of the partial buy-back has more teeth. We shouldn't denegrate them for it. They are putting up alternatives.Without seeing the detail, it actually sounds quite reasonable.

Compare it to Winston's, we'll just take the shares back.

[Daytr]

A much better turn out for the referendum than I certainly anticipated. The government has been sent a resounding NO! Key better start listening to the electorate or he is going to be turfed out at the next election. There is no way they should have raced to float these with this sort of uncertainty surrounding them. They have now damaged NZ's reputation for investment as it is likely these sales will be reversed. They thought they had a mandate to do this, clearly they didn't! http://www.nzherald.co.nz/nz/news/ar...ectid=11172228 (http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11172228)

[Daytr]

I hear Key's Granny is up for sale, any offers considered. Phase two will be the grandkids... LOL

[Xerof]

Problem with a non-binding referendum is a huge proportion of those who gave them the mandate in the first place don't bother to have a second, irrelevant cast of opinion. It's only the minority opposition who wish to shriek their protest, in vain. Well less than a million protest votes is no victory.

lets see if they gain a mandate to buy it all back in 2014, AFTER they tell us what we need to sacrifice to do so.

I have an open mind on the result, and will make sure my vote counts when it counts, not in some pathetic referendum

[Daytr]

I would suggest a turn out of 1.3M says a lot of people care about the issue. That is a much bigger turn out than I think most expected. Sure asset sales may have been part of their election platform, however did they ever consider that they got elected for other reasons? i.e. lack of credible opposition at the time. (How the hell do you think Abbott ever got elected across the ditch.) The referendum maybe non-binding, however the next election isn't. I have lived & worked overseas for 20 years in commodity markets & I have seen the damage that having these sort of assets in the hands of corporations have done. They have been a disaster & it ends up that the tax payer ends up paying much higher power bills & then also ends up picking up the pieces of the trashed company left behind. It hasn't worked in Australia or the States, why do they think it is the right thing to do here These assets are owned by generations of Kiwis & should be retained by the future generations.

Problem with a non-binding referendum is a huge proportion of those who gave them the mandate in the first place don't bother to have a second, irrelevant cast of opinion. It's only the minority opposition who wish to shriek their protest, in vain. Well less than a million protest votes is no victory.

lets see if they gain a mandate to buy it all back in 2014, AFTER they tell us what we need to sacrifice to do so.

I have an open mind on the result, and will make sure my vote counts when it counts, not in some pathetic referendum

[winner69]

Problem with a non-binding referendum is a huge proportion of those who gave them the mandate in the first place don't bother to have a second, irrelevant cast of opinion. It's only the minority opposition who wish to shriek their protest, in vain. Well less than a million protest votes is no victory.

lets see if they gain a mandate to buy it all back in 2014, AFTER they tell us what we need to sacrifice to do so.

I have an open mind on the result, and will make sure my vote counts when it counts, not in some pathetic referendum

With allude respect to those who believe it I don't think that they were given a 'mandate' in the last election ....the party stood on Issue 1 and Issue 2 and Issue 3 etc and Asset Sales .....with Asset Sales only one of several issues.

How many people who voted National in the last election went along and voted saying to themselves 'I vote National today because I want the asset sales to happen' .....not many I would say

Oh well it is just politics and putting spin on things to suit yourself.

[winner69]

Was a bigger turnout than the last Auckland mayoral race (34% I believe) ......was Len given a mandate to stop cutting the grass on the berms

[winner69]

Suggest you re-look at the number there mate ... Or perhaps re-sit that statistics paper you failed. There is no way that 900,000 votes against could have been put together without National voters voting NO too.

Belg ...there was a YES vote in Epsom and Tamaki .....isn't that what really matters?

Hey ....you live in Epsom don't you?

[Daytr]

No but he was obviously given a mandate for other more covert affairs.... LOL What a shambles, out of good grace he should step aside.

I live in the Bay of Islands & the ex MP John Carter just got elected in a landslide. He said he would fight tooth & nail the local council being swallowed by a super council. Now he's elected he's sitting on the fence! Sickening what these elected officials think they can get away with. Just do the right thing for a change!

In reply to 'Was a bigger turnout than the last Auckland mayoral race (34% I believe) ......was Len given a mandate to stop cutting the grass on the berms'

[RTM]

You are right on the money Daytr with your two posts. I voted National last time in spite of the policy to hock off our assets. As on balance I thought National's policies are better for the country. In particular I hoped they would make more progress on the social welfare abuses we see in our country and take people towards a little more personal accountability and responsibility. I also hoped, wrongly in retrospect, that they would figure out that the sale of assets was not what the electorate wanted, and back off that plank.
PS
I to live in Bay of Islands and watching anxiously to see what John Carter does....will he toe the National party line with respect to local body organisation.

[pietrade]

[QUOTE=RTM;449691............. I voted National last time........ I hoped they would make more progress on the social welfare abuses we see in our country and take people towards a little more personal accountability and responsibility. ............[/QUOTE]
Wow, where have you had your head? In a recent TV interview, a legal spokeswoman reported that (trying to recall the actual figures but something like) 800 benefit fraud claims had recouped the state $2million, while a handful of Serious Fraud Office claims on corrupt business people had netted $5 Billion.
Now, who's committing the 'abuses we see in our country' again? Time to remove the blue-tinted specs.......

[vorno]

...Now how does that saying go?

"the more money you have, the easier it is to hide"
- Unknown?

[RTM]

I'm wasn't referring to benefit fraud particularly. That's just one aspect. More the attitude that some folk have that the state should support them. And yes, good to see the SFO move on corrupt business people. I find the alternative government that JK is pushing the country closer and closer to seriously scary.

[vorno]

I wonder how much a crack down on tax dodgers would net? Probably more than enough to ensure those at the bottom of our society get the dignity they deserve.

Enough for a nice surplus.

[Aaron]

Benefit fraud!!! What about all the National super-annuitants picking up a benefit even if they don't need it. One thing I can agree with Robert Jones on in his herald article today.

[winner69]

Benefit fraud!!! What about all the National super-annuitants picking up a benefit even if they don't need it. One thing I can agree with Robert Jones on in his herald article today.

hey Aaron ...cool it

I be one of those in a year or two. I am due that payment because the govt has set aside one and frippence a week for me since I started working

Yes I am one of the selfish generation ....I have no qualms in taking what is rightfully mine ..... it is obviously up to your generation to work out how you are going to keep paying it to me for many years to come.

[stanace]

Benefit fraud!!! What about all the National super-annuitants picking up a benefit even if they don't need it. One thing I can agree with Robert Jones on in his herald article today.

What is your definition of "Don't need it" exactly? Lets say that I had a good job, worked all my life, always rented, and saved about $400,000. However I always enjoyed myself, played golf, ate out, had a company car.
Now I am retired I have no income, just the money in the bank. And have to buy a decent car.
My expenses are still food, rent, insurance(going up), am I now supposed to use up the money I saved until there is nothing left. That will take say 8-10 years. And then what do I do? Why should I suddenly have to reduce my standard of living as soon as I retire?
I haven't read the Robt. Jones item, but there are 2 salient points to Mr. Jones. 1. he cost me money, while he went quietly selling his shares, while pushing them. 2. What would he know about trying to retire on $400,000, and still have the same standard of living, the fraudster?

[Jay]

He would know a lot about retiring on $400K pa. ... oh sorry you meant $400K in total - that is a different story:)

[Aaron]

hey Aaron ...cool it

I be one of those in a year or two. I am due that payment because the govt has set aside one and frippence a week for me since I started working

Yes I am one of the selfish generation ....I have no qualms in taking what is rightfully mine ..... it is obviously up to your generation to work out how you are going to keep paying it to me for many years to come.
If the govt has set it aside then no worries but I think the Cullen fund is the only attempt to put some aside. As for being rightfully yours, I recall chanting that "free education was a right not a privilege" turns out it was a privilege after all.(You know which generation had that privilege).
How about means testing as a first step to keep up payments.

Apparently poor Robert Jones wasn't aware that he needed to tell the market he was selling his namesake company. whoops.

[stanace]

Come on Aaron, you didn't reply to my "why should I suddenly have to reduce my standard of living as soon as I retire"
And now you talk about means testing. What is your idea of a minimum asset balance before it reduces?
Come on, man, show us how you think it should work. Obviously you are not too close to 65 yet, or have a couple of million stashed away in Swiss banks.

[winner69]

No Aaron ...you don't get it at all

When I started working and paying taxes the government told me they were putting one and frippence (out of the taxes I paid) a week aside to pay me a pension .......and I believed them and they need to honour that promise

Yes I got a free education, paid a bit for having kids until they stopped that, and all that good stuff ......and was lucky to be the generation that started buying property at the beginning of the biggest property boom ever .....and all those good things

But I still expect the younger generation to give me pocket money and provide hospitals if I need it .....and you guys need to work out how to make that happen.

And I forgot about the free bus rides and ferry trips to waiheke ...... Well done winston

[TimmyTP]

How about means testing as a first step to keep up payments.
Nah, let's just can super and all pensions are a function of what you save/invest during your lifetime, with taxes adjusted (and backdated) accordingly. Unemployment benefit (or whatever it's called) can be along the same lines - if you don't contribute, you can't withdraw unless you are physically unable to work.

Nice result for me, but I would have to keep out of the cities for fear of tripping over all the hungry people.


Oops, apparently this is supposed to be the Meridian thread! Apologies from me to all those who want to discuss that topic; looks like you've been hi-jacked.

[Harvey Specter]

....and I believed them sucker

or maybe I am the sucker as I am likely to be the one of the first to pay for others retirements, but also have to pay for my own.

[winner69]

sucker

or maybe I am the sucker as I am likely to be the one of the first to pay for others retirements, but also have to pay for my own.

You onto it mate .... I hope you and your generation do a good job and see that me and stan get our pocket money

Shame that your generation were also the ones that bought my generations properties at the top of the property cycle ....and were encouraged to borrow almost the price of the property to do so

But don't forget how to work out to look after the old people .... the ones who made the world what it is for you ... a beautiful place

[Aaron]

Come on Aaron, you didn't reply to my "why should I suddenly have to reduce my standard of living as soon as I retire"
And now you talk about means testing. What is your idea of a minimum asset balance before it reduces?
Come on, man, show us how you think it should work. Obviously you are not too close to 65 yet, or have a couple of million stashed away in Swiss banks.
I don't think I said you had to reduce your standard of living when you retire. You might even look to reduce your standard of living before you retire so that you can save for retirement.
Means testing might take a bit more thought and intelligence than I am capable of but say the average income is $48,000 and nat super is $18,585. You could get your full entitlement but this would rebate by 39cents in every dollar over $48,000 that you earn. By the time you get to $96,000 you receive no handouts from the people of NZ. Assets might be harder I can imagine the newspaper front page as pensioners are forced to sell their Remuera house to fund their own retirement. Too hard for me to work out and no point spending too much time on it, boomers will never vote in a govt that would mention things like capital gains tax or asset testing. Just ask National what a National Superannuation surcharge does to the length of time you are in office. We would need to bring assets into it though no point letting asset rich cash poor people off the hook like we do now.
The highjack of the thread continues.....

[macduffy]

May as well continue the hijack - I sense we're warming to the subject!

Yes, of course NZ Super should be means-tested, some sort of abatement system that takes account of varying levels of assets, I imagine. Oh, and the age of entitlement will have to be gradually increased to take account of increased life expectancy and national affordability.

But it's all too politically difficult - so I guess we'll muddle along until some economic disaster or other forces some action.

Disc: One of the recipients, paying considerably more in tax than receiving in super. Note: NZ Super is closer to $15,000pa than $18,585pa.

[winner69]

May as well continue the hijack - I sense we're warming to the subject!

Yes, of course NZ Super should be means-tested, some sort of abatement system that takes account of varying levels of assets, I imagine. Oh, and the age of entitlement will have to be gradually increased to take account of increased life expectancy and national affordability.

But it's all too politically difficult - so I guess we'll muddle along until some economic disaster or other forces some action.

Disc: One of the recipients, paying considerably more in tax than receiving in super. Note: NZ Super is closer to $15,000pa than $18,585pa.

Seems unfair you even have to pay tax on this Suoerannuation

[Aaron]

Seems unfair you even have to pay tax on this Suoerannuation

W69 you shouldn't be goading the younger generations this close to your retirement they might wake up. Although they are probably too busy trying to get by paying for their kids degrees and saving for retirement to notice.

[stanace]

You don't get it. I'm retired, not working. Whats with the means testing? Assets, why do I have to live in a smaller house now that I've retired? And if I own my home that I have lived in for the past 10 years, Remuera or not, why should I now have to downsize?
And I particularly like your comment about reducing my standard of living before I retire. In case I live that long? Is that what you are doing right now, reducing your standard of living so that you can retire, yea have a tui!

[stanace]

Try again. I have $400,000 in the bank, should I get Super? Yes or no?

[Harvey Specter]

Try again. I have $400,000 in the bank, should I get Super? Yes or no?Why should a kid on minimum wage be paying for your super?

I think some for of means testing resulting in an abatement of super is sensible. $400k may result in a 20% reduction in super (a sliding scale with those over $2m (including amounts gifted to trusts etc) receiving nothing).

[Aaron]

What is your definition of "Don't need it" exactly? Lets say that I had a good job, worked all my life, always rented, and saved about $400,000. However I always enjoyed myself, played golf, ate out, had a company car.
Now I am retired I have no income, just the money in the bank. And have to buy a decent car.
My expenses are still food, rent, insurance(going up), am I now supposed to use up the money I saved until there is nothing left. That will take say 8-10 years. And then what do I do? Why should I suddenly have to reduce my standard of living as soon as I retire?
I haven't read the Robt. Jones item, but there are 2 salient points to Mr. Jones. 1. he cost me money, while he went quietly selling his shares, while pushing them. 2. What would he know about trying to retire on $400,000, and still have the same standard of living, the fraudster?
I your case no house and $400,000 at say 4% which would be $16,000 a year I don't think you would have anything to worry about as any surcharge would have to be set quite high.

I am trying to save for the future, I don't play golf or eat out much and when I look at the small inroads I am making to increase wealth I am guessing I might have saved just enough to not be entitled to national superannuation when I retire at 67 and I will probably be bitter as if I had enjoyed life to the full the people of NZ would have helped me out more when I retire but I prefer to try my best and only put my hand out when I need it.
I am not saying all National superannuitants are bludgers just that not everyone needs a handout.
If Macduffy earns roughly $75,000 a year I would question whether he needs an additional $15,000 handout when the govt is borrowing money each year. I will take $15,000 if I need it or not if its available when I retire but will the country as a whole be better off borrowing to fund it.
I am not trying to upset anyone just putting forward an opinion on the wrong thread.

[blackcap]

Why should a kid on minimum wage be paying for your super?

I think some for of means testing resulting in an abatement of super is sensible. $400k may result in a 20% reduction in super (a sliding scale with those over $2m (including amounts gifted to trusts etc) receiving nothing).

Don't agree. If you have been clever enough or sober enough to save 400K then you should be entitled to enjoy it. Its your money and you have foregone the instant gratification to enjoy something in the retirement years. Any form of asset testing will just encourage frivolous spending and trust establishment.

[Longhaul]

NZ just needs to adopt Gareth Morgan's Big Kahuna (http://www.bigkahuna.org.nz/) and give every citizen over 18 a Universal Basic Income. Then there's no arguments about means testing super.

[Harvey Specter]

Don't agree. If you have been clever enough or sober enough to save 400K then you should be entitled to enjoy it. No one is saying you cant enjoy it, just saying you shouldn't get extra from the government/taxpayers
Its your money and you have foregone the instant gratification to enjoy something in the retirement years. Any form of asset testing will just encourage frivolous spending and trust establishment.The lower superannuation amount should be enough for most that they dont spend frivolously. Getting the level of abatement right is also key for this issue (if I did my maths right above, that was only 1c of abatement for every $1 of investment earnings).

Look through into trusts etc should eliminate planing. They have done a lot of work in this area for WFF so an extension for super shouldn't be an issue.

EDIT: since this is all off topic, I wont be commenting on this again on this thread. Heres another thread which is kind of relevant:
http://www.sharetrader.co.nz/showthread.php?8854-Should-the-superannuation-age-be-raised

[macduffy]

This discussion reminds me of people of my parents' generation arguing for Universal National Super, as it was then, on the grounds that they had "paid for it" through the Social Security tax of 1/6 in the Pound ( 7.5c in the dollar, in today's terms). True, as far as that went, except that the SS tax was a relatively recent impost in the working lives of some; it was meant to pay for all SS benefits, not just Universal Super; it was a "pay as you go", not a funded scheme so it never had the benefit of the magic of compounding returns.

We tend to see these issues through the prism of our own circumstances and experience!

;)

[troyvdh]

What really annoys me posters is when folk post stuff inappropriately.

Some folk just never get it..do they.

I again will have to contact the administrator.

It really does my head in.

[winner69]

This discussion reminds me of people of my parents' generation arguing for Universal National Super, as it was then, on the grounds that they had "paid for it" through the Social Security tax of 1/6 in the Pound ( 7.5c in the dollar, in today's terms). True, as far as that went, except that the SS tax was a relatively recent impost in the working lives of some; it was meant to pay for all SS benefits, not just Universal Super; it was a "pay as you go", not a funded scheme so it never had the benefit of the magic of compounding returns.

We tend to see these issues through the prism of our own circumstances and experience!

;)

My Dad said it was one and frippence (1 shilling 3 pence) but I see that nzhistory site said that it was 1 shilling in 1938.

Maybe it was never 'put away' but always paid of current govt income ..... whatever a national super of sorts has been promised so selfishly I will accept it in a few years time.

[Baa_Baa]

Anyone have any insights why the pop today, now $1.035?

[mattwanz]

Anyone have any insights why the pop today, now $1.035?


Strong NZ economic forecast, currency strengthening, would imagine stable-ish returns? When OCR goes up in March could be some more offshore investment here I suppose...

[Tyro]

Please does any know how much dividend to expect, and when?

[macduffy]

Please does any know how much dividend to expect, and when?

Interim result announcement is expected on 19 February.

http://www.meridianenergy.co.nz/about-us/media-centre/media-releases/market-announcements/meridian-energy-interim-results-announcement-date/

[cyclist]

I’ve been pondering the true value of the instalment receipt process, for someone like myself who is still sitting on cash in the bank. It turns out that the true value is a lot less than the headline “13.4% Gross in the First Year” number quoted in the prospectus.

Consider someone purchasing 10000 shares. i.e. ultimately a $15000 purchase, in the first year made up of $10000 for the instalment receipts, plus $5000 still in the bank. Annual return, assuming gross divi of 13.4 c/share, and gross interest in the bank of 4% is as follows:

(0.134 * 10000 + 0.04 * 5000) / 15000 = 10.3% gross return

That compares to (0.134 * 10000) / 15000 = 8.9% gross, if we paid full price up front.

(Simplified ignoring the time value of money)

Conclusion: The instalment arrangement only has significant value if you have another high return option for the $5000 until it is due for payment, or you don’t have the $5000 in the first place and hope to sell the instalment receipts before the final instalment, without any capital loss on sale.

I entered this stock strongly against my gut feel after a careful read of the prospective. Part of the reason for entering anyway was being seduced by the headline “first year” yield. Looks like I have been outsmarted.

[peat]

How would that change if you put the 5k into more instalment receipts ?

[cyclist]

I guess that is possible, but you are of course exposing more of your capital to any risks that are associated with this particular company.

[kyanar]

I see a buyback announcement came in about an hour ago

https://nzx.com/companies/MEL/announcements/246285

[Harvey Specter]

I see a buyback announcement came in about an hour ago

https://nzx.com/companies/MEL/announcements/246285Not a biggie. Just for the purposes of their share option plan. They cant issue more shares since that would effect the Governments % holding.

[Tyro]

Please, is there a post float thread for MELCA anywhere?

[axe]

After the call on the installment receipts will MEL be included in the NZX10?

[Xerof]

Tyro,

interesting isn't it? Clearly not seen as a traders stock, and likely most of the stock is buried in the long term portfolios.

It has a very strong correlation to the rise and fall of various political parties at the moment.....

Start a new thread and see what happens....

[kyanar]

Sorry if this seems like a stupid question, but what's with the sudden rise in the MELCA share price? It went ex-dividend yesterday, and all the rudimentary stuff I've read says that once a stock goes ex-div the price usually declines by roughly the dividend amount to reflect that it's no longer entitled to that dividend - whereas MELCA has done pretty much the opposite!

[Harvey Specter]

It declined by the amount of the dividend at open yesterday but then just continued on its current rise, mainly driven by Labours poor showing in the polls making its NZPower plan less likely to see the light of day. All powerco's are on the rise I think.

[silu]

simple really!!!! MEL was sold as a bargain, the best long term asset play I have ever seen.

Agreed. Couldn't believe that I was able to fill my boots with more at 89c.

[Master98]

Agreed. Couldn't believe that I was able to fill my boots with more at 89c.

your gain and others lose that's reality of share market, good on you.

[bull....]

ill stick with my earlier post 20c in it + divs after 18 mths more if nat win election

Looking good

[macduffy]

A vote of confidence here. NZAS to recommence spending on Tiwai Point.

http://www.stuff.co.nz/business/industries/9949202/Spending-nod-for-Tiwai-Point

[Snoopy]

They have forecast dividends of 10.5c for 2014 and 11.5 for 2015 - net.

But even so, the yield compares favourably to the likes of CEN, TPW, MRP, VCT which are in the 5-6% range.


Now all of the power companies are 'on the table', the question arises how should the income investor choose which is the best in terms of forecast dividend payment?

Nominally the FY2014 yield, based on the 117.5 MELCA most recent closing price is:

10.4/117.5= 8.85% (net)

But Meridian is different because there is a 50c per unit capital payment due in May 2015 (approximately one year away). One way of accounting for this is as follows.

Assume that you as an investor have that "50c per share" tucked away somewhere earning interest, at say 4.5% per annum. Assume that the money is in a PIE and pays 28% tax. That means the after tax return you would receive is:

4.5% x (1-0.28) = 3.24%

Because you don't have to stump up that 50c for a year, you can invest less than 50c and let the interest make the balance up to 50c in a year's time. What balance 'B' would you have to invest to make this happen? You can calculate it by solving the following equation.

B x 1.0324 = 50c

So B is 48.4c.

In reality, over the next year it is the government that is saving you 50c - 48.4c = 1.6c per share, by letting you have a year from now to pay the final 50c. This gives you as a shareholder a net 1.6c per share in your pocket. That 1.6c is to you the benefit of holding MELCA instalment receipts today and not MEL shares. So you should take that 1.6c off the fully paid up share price to get a comparable yield with other power companies.

10.4 / (117.5 + 50 -1.6) = 10.4 / 165.9 = 6.27%

That is my answer, based on my way of looking at the circumstances. Interested to hear if others see it the same or differently.

SNOOPY

[barleeni]

I'm surprised MEL doesn't get much chatter on this forum, or is there another thread somewhere else regards Meridian?

Anyhow, just wondering peoples thoughts on the possible reaction come Monday on the back of the sell off of the US solar stuff, as well as the news about Tiwai and their 20 million back pay saga. Will that flow through to the Meridian SP?

I have a sell order for some of my stock at $1.25 but I am thinking there's not too much chance of that going through anymore in the near future............

[vorno]

I'm surprised MEL doesn't get much chatter on this forum, or is there another thread somewhere else regards Meridian?

Anyhow, just wondering peoples thoughts on the possible reaction come Monday on the back of the sell off of the US solar stuff, as well as the news about Tiwai and their 20 million back pay saga. Will that flow through to the Meridian SP?

I have a sell order for some of my stock at $1.25 but I am thinking there's not too much chance of that going through anymore in the near future............

As I see it the biggest risk is if Labour gets in. However, they can't even lead a heard of cattle with their current structure so I wouldn't hold much hope for them.

[Harvey Specter]

The US solar was probably a distraction. It would have made since if it was highly profitable (it wasn't) or they could translate their experience to NZ but Solar isn't viable for a power co to sell. It is marginal for a Network company but only if used for peaks heeding, hence Vector trailing a battery pack.

Doesn't make sense for houses, but may for businesses that operate during the day.

[GTM 3442]

The US solar was probably a distraction. It would have made since if it was highly profitable (it wasn't) or they could translate their experience to NZ but Solar isn't viable for a power co to sell. It is marginal for a Network company but only if used for peaks heeding, hence Vector trailing a battery pack.

Doesn't make sense for houses, but may for businesses that operate during the day.

I'd have thought that solar was a good way of keeping water behind the dam, so reducing weather risk.

[Xerof]

I'm surprised MEL doesn't get much chatter on this forum, or is there another thread somewhere else regards Meridian?

I have a sell order for some of my stock at $1.25 but I am thinking there's not too much chance of that going through anymore in the near future............

has anybody seen the Craig's analysis which values MELCA at $1.65? I saw it in a table presented in the Genesis pre-IPO presentations, but they have since been taken down.

you might be selling yourself short at $1.25.....if the threat by the lefties can be put to bed, these will get cracking to the upside after September

discl: hold

[MAC]

has anybody seen the Craig's analysis which values MELCA at $1.65? I saw it in a table presented in the Genesis pre-IPO presentations, but they have since been taken down.

you might be selling yourself short at $1.25.....if the threat by the lefties can be put to bed, these will get cracking to the upside after September

discl: hold

Edison have a DCF valuation at $1.86 as at 7th March 2014 and a "cautiously optimistic" message. Thus an installment receipt valuation of $1.36.

http://www.edisoninvestmentresearch.com/research/report/meridian-energy1

Lot's can happen with the cyclicality of storage, and I've always thought that over time that GNE and MEL will have an out of phase seasonal cycle. Still a little to close to the IPO's for all that just yet, both seem to look ok for now.

[Joshuatree]

Craigs have a target price on meridian of $1.28 as at 1st of april (overweight recco) , their most recent research note.

[McGyro]

Has anyone any thoughts on how meridian share price will move around the time of the final installment payback?

[percy]

Has anyone any thoughts on how meridian share price will move around the time of the final installment payback?

I expect a little weakness in the SP when holders get the demand for the final payment.
Once that is out of way the SP price will adjust to include the 50 cents per share payment. Not a big deal as far as I am concerned.I know how much money I need to pay.

[rbel038]

Looks like manapouri could be down two units sometime in the future. Interesting that only two units are showing the problem at the moment.

http://www.energynews.co.nz/news-story/17511/meridian-faces-transformer-replacement-manapouri

[vorno]

Looks like manapouri could be down two units sometime in the future. Interesting that only two units are showing the problem at the moment.

http://www.energynews.co.nz/news-story/17511/meridian-faces-transformer-replacement-manapouri


Nope, I refuse to sign up!

[belted galloway]

Nope, I refuse to sign up!


Here's the press release directly:

https://www.meridianenergy.co.nz/about-us/media-centre/media-releases/hydro-wind-solar/two-transformers-out-of-action-at-manapouri/

[horus1]

The problem is that it is a sign of lack of maintenance which is very bad in the medium /longterm . Harmonic currents are high at Manapouri and the transformers get a hard time.

[Snow Leopard]

Here's the press release directly:

https://www.meridianenergy.co.nz/about-us/media-centre/media-releases/hydro-wind-solar/two-transformers-out-of-action-at-manapouri/

"The cooling unit and its generator have been removed from service. A new transformer will be ordered from an overseas manufacturer and is expected to be installed and operational by March 2015."

Throwing the old transformer away!
That strikes me as a major failure not only of the hardware but their asset monitoring - I wonder what actually happened!

For certain they do not want to end up with only five working units till next year.

Best Wishes
Paper Tiger

[blackcap]

It can't be that bad as the company is not announcing it to market so its not material.

[Harvey Specter]

"The cooling unit and its generator have been removed from service. A new transformer will be ordered from an overseas manufacturer and is expected to be installed and operational by March 2015."

Throwing the old transformer away!
That strikes me as a major failure not only of the hardware but their asset monitoring - I wonder what actually happened!

For certain they do not want to end up with only five working units till next year.

Best Wishes
Paper Tigerprobably well past it's used by date so they were just running it till it broke. No issue.

[rbel038]

“We don’t know the root cause yet, but what we do know is that within the oil cooler – which is an attachment to the transformer – bits of aluminium have broken away and we believe they’ve been sucked through into the body of the transformer itself,” says Neal Barclay, Meridian's general manager of markets and production.
“That can cause issues with electrical arcing. There are protection systems in place to catch all of that, but we don’t rely on those protection systems.” - ref . energy news

Each of the coolers were replaced in 1999

I agree at this stage it isnt material , they state it wont affect revenue. However if you have 7 units refurbished with the same gear and two have failed after 15 years (when the design life is usually 40-50) seems like its just something to keep an eye on as a shareholder/asset owner

[Snow Leopard]

“We don’t know the root cause yet, but what we do know is that within the oil cooler – which is an attachment to the transformer – bits of aluminium have broken away and we believe they’ve been sucked through into the body of the transformer itself,” says Neal Barclay, Meridian's general manager of markets and production.
“That can cause issues with electrical arcing. There are protection systems in place to catch all of that, but we don’t rely on those protection systems.” - ref . energy news

Each of the coolers were replaced in 1999

I agree at this stage it isnt material , they state it wont affect revenue. However if you have 7 units refurbished with the same gear and two have failed after 15 years (when the design life is usually 40-50) seems like its just something to keep an eye on as a shareholder/asset owner

Thanks for that extra info.

Best Wishes
Paper Tiger

[bull....]

what a good result, bonus 2cps div makes 17% div return alone on the receipts + cap gain 0f 30c haha what an investment

[percy]

what a good result, bonus 2cps div makes 17% div return alone on the receipts + cap gain 0f 30c haha what an investment

Fantastic.!!
Rather pleased to have transferred funds from my bank deposit 4% interest rate,and purchased MELCA.
Exceeded my wildest expectations,by a huge amount.!!!

[silu]

I haven't said this often about my investments lately but I'm really happy with MELCA and it stands out like a shining beacon.

[Joshuatree]

Great stuff!! Went overboard taking these up, my fave number now:)

[Hoop]

Market opened with MELCA steady at 128.5 same as fridays close.....Hmm the no rise on this news is interesting....was the special 2.0 div factored in before it was announced ??
I bought more at opening (128.5c)...it is a very high yield rate...OK the industry is a no growth sector but even with the unpaid portion this has to be a yield investors dream at this price...surely

Maybe investors are wary ...this dividend yield is going to make MEL cannon fodder for the Greens and other lefties today

Meridian Full year results (https://www.nzx.com/files/attachments/198630.pdf)

[bohemian]

I bought more on Friday. It seems to me that this energy share could be a barometer for political sentiment and the recent ructions for the National Party might be affecting the share price.

[Joshuatree]

Maybe political uncertainty with poll showing labour and greens closing the gap on national.

[theace]

what a good result, bonus 2cps div makes 17% div return alone on the receipts + cap gain 0f 30c haha what an investment


Anyone: How do I work work how much I get cash (per share) in hand taxes, etc?

[Okebw]

Anyone: How do I work work how much I get cash (per share) in hand taxes, etc?

In hand will be the amount of the dividend multiplied by the number of shares you own and as far as taxes are concerned I couldn't comment without details of your income. However it is 90% imputed so if you are a low earner it's likely you'll receive a tax benefit when you apply for next years refund and a high earner you'll still owe a small amount.

[cyclist]

If fully imputed, the gross dividend would be 8.82/(1-0.28) = 12.25.

I assume for 90% imputed, that changes to 8.82/(1-0.252) = 11.79. (0.252 is 90% of the company tax rate).

They will take out DWT to ensure that 33% tax has been taken off at source. Therefore the "in the hand" amount is 11.79 * 0.67 = 7.9 c/share

[theace]

If fully imputed, the gross dividend would be 8.82/(1-0.28) = 12.25.

I assume for 90% imputed, that changes to 8.82/(1-0.252) = 11.79. (0.252 is 90% of the company tax rate).

They will take out DWT to ensure that 33% tax has been taken off at source. Therefore the "in the hand" amount is 11.79 * 0.67 = 7.9 c/share

Great, thanks.

[Hoop]

Anyone: How do I work work how much I get cash (per share) in hand taxes, etc?


In hand will be the amount of the dividend multiplied by the number of shares you own and as far as taxes are concerned I couldn't comment without details of your income. However it is 90% imputed so if you are a low earner it's likely you'll receive a tax benefit when you apply for next years refund and a high earner you'll still owe a small amount.

Further comment
The 90% imputed part is taxed at the corporate rate (28% I think) by MEL so this is your tax credit...On average, depending on your earnings income, the imputed tax credit often cancels out the tax you pay on the dividend earn't...a bit like paying withholding tax on the interest received from your bank savings account (but without the tax credit part)

so.......say you have 1000 shares and you pay about 25% of your earnings in taxes.. then expect to keep most of that dividend .. 6.82c + 2.00c = 8.82c x 1000 = $88.82. (you may need to complete end of year tax return to receive any tax back surplus)
If earn less than $40,000 pa then you probably get that $88.82 divy + some imputed tax credit surplus* as well.. ....* You will need to furnish an end of year tax return to receive that tax back surplus..


Your homework ..I've supplied the Tax table below...you supply and use the calculator...:)

http://i458.photobucket.com/albums/qq306/Hoop_1/TaxrateNZ2013.png (http://s458.photobucket.com/user/Hoop_1/media/TaxrateNZ2013.png.html)

[sb9]

Market opened with MELCA steady at 128.5 same as fridays close.....Hmm the no rise on this news is interesting....was the special 2.0 div factored in before it was announced ??
I bought more at opening (128.5c)...it is a very high yield rate...OK the industry is a no growth sector but even with the unpaid portion this has to be a yield investors dream at this price...surely

Maybe investors are wary ...this dividend yield is going to make MEL cannon fodder for the Greens and other lefties today

Meridian Full year results (https://www.nzx.com/files/attachments/198630.pdf)


Yeah, tht the result would've propelled the share price above $1.30 at least, especially seeing that there are big sellers at the moment around that level. Must be the latest political dirt having its effect.

[mouse]

Yeah, tht the result would've propelled the share price above $1.30 at least, especially seeing that there are big sellers at the moment around that level. Must be the latest political dirt having its effect.

The election result is no longer certain. Uncertainty in the share price, although the result is good for Meridian, the key has to lock down the latest threat. We await events.

[sb9]

Looks like this one is pushing up quite strongly, now at $1.33 and not many sellers at that level, next stop $1.40??

[Joshwnz]

Looks like this one is pushing up quite strongly, now at $1.33 and not many sellers at that level, next stop $1.40??

Looking like it may reach that today. Just gotta hold breathe for two weeks hoping no further dirty politics announcements. How many fence sitters will be swayed by these "moderate" tax cuts this afternoon?

[Sideshow Bob]

Looking like it may reach that today. Just gotta hold breathe for two weeks hoping no further dirty politics announcements. How many fence sitters will be swayed by these "moderate" tax cuts this afternoon?

Mr Dot Com has his planned announcement 5 days before the election.....but bit more confidence national will get back in power.

[mouse]

My sixpennyth. I have 3,600 MRP shares and 3,600 Meridian. My MRP shares cost $8,320. The 3,600 Meridian shares were on HP, $3,600 down and $1,800 in 2015? Yet MRP dividends for this year total 13.5 cents per share. With Meridian paying 13 cents per share.
Dividends are almost identical. Yet I paid $8,320 for MRP and will pay $5,400 for Meridian. So $3,000 more for MRP.
They are both in the same business. Why does this happen. Any ideas?

We then come to todays closing price. MRP $2.445 per share. Meridian $1.40., with another 50 cents to be paid later. I cannot see why there is such a large, 54 cent, price difference. Again, why the difference, and why is Mr. Market acting like this?

[Chaowee88]

My sixpennyth. I have 3,600 MRP shares and 3,600 Meridian. My MRP shares cost $8,320. The 3,600 Meridian shares were on HP, $3,600 down and $1,800 in 2015? Yet MRP dividends for this year total 13.5 cents per share. With Meridian paying 13 cents per share.
Dividends are almost identical. Yet I paid $8,320 for MRP and will pay $5,400 for Meridian. So $3,000 more for MRP.
They are both in the same business. Why does this happen. Any ideas?

We then come to todays closing price. MRP $2.445 per share. Meridian $1.40., with another 50 cents to be paid later. I cannot see why there is such a large, 54 cent, price difference. Again, why the difference, and why is Mr. Market acting like this?

2 main reasons why.

- MRP has ex-dividend, so the 8.3C a share has been already allocated to holders of shares. New buyers will not get this dividend.

- MEL is currently trading on 1.40 but is based on installment so is actually +0.5 = 1.90 each share. They have not paid out dividends as of yet. Their ex-dividend date is on the 26/09 with 6.82 normal div and a special of 2. So in essence buyers now will actually only be paying 1.90 - 0.0882 = 1.8118.

Now base that on the market of both companies currently and their most recent profit and forward looking profits and the numbers start to stack up.

- MRP has a market cap of 3.36 billion yielding 5.52% in dividends.

- MEL is based on installment so actual value is 1.90 * 2,563,000,000 = 4.8 billion market cap yielding 6.52%. Note however buyers of MEL now can still get the upcoming dividend increasing the yield as follows = 0.1239/1.8118 = 6.838%.

So the market is pricing Meridian at a higher "worth" than Mighty River when both companies released similar results Meridian delivering slightly higher EBITDAF than Mighty River and also delivering slightly more attractive yield for investors.

The higher earnings and more attractive yield gives MEL a premium over MRP based on market cap.

Don't just look at the share price and difference in price. You need to take into account the shares on issue for both companies and their current and future looking profits.

This is how I look at it anyway..

[mouse]

Many thanks Chaowee. We still have 6.8% returns for MEL and 5.5% for MRP. HOWEVER, MRP is nearer to its customers plus has two major generation systems, hydro and geothermal. So I suppose MEL, only hydro really, does have a higher risk. Both are of course purchased for income and I think for this reason will continue to do well. Again, many thanks Chaowee for your analysis.

[horus1]

The excessive profits of all the electricity cos show the failure of the market in NZ for the consumer. They hold the votes and in the finish this will lead to either regulation or substantial changes to the market. The votes of the public will finally win. Be very wary of the shares of MRP,Meridian ,Trustpower and Genesis.

[Beagle]

The excessive profits of all the electricity cos show the failure of the market in NZ for the consumer. They hold the votes and in the finish this will lead to either regulation or substantial changes to the market. The votes of the public will finally win. Be very wary of the shares of MRP,Meridian ,Trustpower and Genesis.

I strongly disagree. Returns based on the replacement value of assets are quite moderate. I am a happy holder of Genesis which is arguably the best diversified from a generation point of view.

[Harvey Specter]

The excessive profits of all the electricity cos show the failure of the market in NZ for the consumer. They hold the votes and in the finish this will lead to either regulation or substantial changes to the market. The votes of the public will finally win. Be very wary of the shares of MRP,Meridian ,Trustpower and Genesis.Excessive profits? I would hardly call a yeild of 5.52% and 6.52% excessive, especially given their is a risk premium currently factored in should Greens/Labour get over the line. If National wins, yeild will drop to below 5%! You can get term deposits for close to that.

[horus1]

The regulator will not let them get a return on revaluated assets only on original costs . That is why in economic terms it is a rip off. In the finish they will get regulated as it is an essential industry

[Harvey Specter]

In the finish they will get regulated as it is an essential industryRegulation should only occur for monopolies.

Sure there should be some tweeking of the market model to ensure there is better competition, and to ensure generators cant be anti-competitive in certain situations (ie. price spikes caused by an exceptional event) but there is competition. If you think the price of generation is too high, go build a power plant and hook it up to the grid.

[Beagle]

The regulator will not let them get a return on revaluated assets only on original costs . That is why in economic terms it is a rip off. In the finish they will get regulated as it is an essential industry

Okay your political agenda is clear for all to see. I still strongly disagree. Plenty of generation capacity development currently on hold because they can't get an adequate return on new investment and the market from a generation point of view is already well supplied. What's the axe you want to grind, winter power bills hurting ?

[horus1]

I'm not political. I know a lot about the electricity industry,believe me if the regulator doesn't get them the technology will .

[dingoNZ]

I'm not political. I know a lot about the electricity industry,believe me if the regulator doesn't get them the technology will .

Logic would disagree

[mouse]

I'm not political. I know a lot about the electricity industry,believe me if the regulator doesn't get them the technology will .

Logic would agree. Meridian has all the spare capacity of Tiwai Point. Waiting to get loose.

[BlackPeter]

August monthly report is out and looks promising: National water reserves below average (94%), while Meridians reserves increased to well above average (136%) despite increased power consumption this August (4.2% higher than last year). Higher reserves and higher consumption ... do I feel another good year coming?

https://www.nzx.com/files/attachments/200561.pdf

Discl: hold; DYOR - my crystal ball is cloudy, as always ... and the election can spoil it all:ohmy:

[Beagle]

Logic would agree. Meridian has all the spare capacity of Tiwai Point. Waiting to get loose.

And no way of getting it to market...besides that anyone noticed the wholesale price of aluminium has recovered quite well lately :)

[axe]

The regulator will not let them get a return on revaluated assets only on original costs . That is why in economic terms it is a rip off. In the finish they will get regulated as it is an essential industry


The regulators will target the lines companies first.(monopoly)

Probably the ones that are 100% privately owned, the ones that are using loans at favourable interest rates to companies based in the cayman islands, so that can barely making a profit (in NZ) because they can only just cover the interest payments, so hardly pay any tax.
As the interest payments are going into a subsidiary of the parent company, but the subsidiary is cayman island based, no tax paid.

They are the ones who the regulator will go after first.

No government Red,Blue or Green will target the state owned gentailers profits as they are getting 51% of the DIVI.

[cyclist]

No government Red,Blue or Green will target the state owned gentailers profits as they are getting 51% of the DIVI.

And the tax component of the other 49%.

[axe]

And the tax component of the other 49%.

Correct, also to appease Winston they will target the assets with 100% foreign ownership ie: the Wellington lines company.

[Harvey Specter]

The regulators will target the lines companies first.(monopoly)
.you do realise the Comcom has been targeting the lines companies for years. Lots of court cases send extra compliance.

IRD is looking into those overseas owned lines companies too.

Transpower may get away with it since govt owned.

[axe]

Yes I am aware. Also, I am not saying there is 0 risk for the mixed ownership model companies.

[mouse]

You know, the horse is not a winner until it gets over the line. Mind you, Winston could be offered the PMs job and that might get him on board with the Nats. Does it need Nats to be Govt for the share price to stay up? And why are we closing today at $1.45 before the election results?
Should I sell, or buy more?

[dingoNZ]

I brought some more@ $1.45 today, at the end of the day. I'm confident that the Nats will come in and that Melca will continue to perform. They have a great growing customer base and good future potential

[Sideshow Bob]

Not to mention 8.8 cps coming soon......

[Wolf]

I sold my power company shares today for while I do expect national to get in and the market seems to, it does seem tight and if Labour got in I think the market would react negatively.

My most important goal Is capital preservation and I will happily pay a higher price on Monday for this added security.

[Stranger_Danger]

So, up a good bit this week ahead? Or, priced in already?

I guess time will tell.

[bull....]

should be positive today following election result.

[mouse]

So, up a good bit this week ahead? Or, priced in already?

I guess time will tell.

My view is you cannot price in an election result. Since there are so many variables. You could take a punt of course. But we also have the problem of return on capital, versus return of capital. Obviously Wolf prefers the latter. Which with inflation and taxes is probably not certain either. Life is really a bit impracticable, but we have to do the best we can.
Percy, I am moving over to your area whilst EQC repairs go on here.

[robbo24]

My view is you cannot price in an election result. Since there are so many variables. You could take a punt of course. But we also have the problem of return on capital, versus return of capital. Obviously Wolf prefers the latter. Which with inflation and taxes is probably not certain either. Life is really a bit impracticable, but we have to do the best we can.
Percy, I am moving over to your area whilst EQC repairs go on here.

You can price it in, it's easy.

If you thought the red threat was going to win, you didn't buy.

If you thought the red threat wasn't going to win, you bought.

Let's go power companies!!!! :D:D

[stoploss]

Wow ......

[silu]

This is crazy!?!?!?!?

[dingoNZ]

This is crazy!?!?!?!?


So glad I bought in Friday, this will wash out the div

[goldfish]

Nice, I got some on friday sold half on opening will keep half as it goes x div on friday, going to be a interesting week to see what happens.

[McGyro]

Anyone care to explain the point in hanging on to Meridian shares now that the party, so to speak, is over?
Done well to date but the high return divs and the post issue run-up are done.
Is there more to come?

[bunter]

- My valuation 2.37.
- Utilities might get a premium one day for liquidity, quality, and flight of capital to defensive stocks pre-crash - no allowance for which is included in that 2.37.
- 'Capital management' announcement due in Feb 2015 - given that they paid a special dividend recently, I'm picking this will be a return of capital rather than a call for more.

But all in all GNE (3.47 valuation) a better bet in the sector IMVHO.

[noodles]

- My valuation 2.37.
- Utilities might get a premium one day for liquidity, quality, and fight of capital to defensive stocks pre-crash - no allowance for which is included in that 2.37.
- 'Capital management' announcement due in Feb 2015 - given that they paid a special dividend recently, I'm picking this will be a return of capital rather than a call for more.

But all in all GNE (3.47 valuation) a better bet in the sector IMVHO.
a buyback is more likely. The company is short imputation credits.

[dingoNZ]

Just checked my bank and have received my divi, thanks MELCA you're a star!

[silu]

Just checked my bank and have received my divi, thanks MELCA you're a star!

Yeah I needed that. Booking a Xmas holiday overseas is just so expensive.

[newtrader]

Does the imputation credit look a bit lower than the declared amount (2.39 cents)?

I did the maths and it looks like I received imputation credits based on the assumption of 2.387 (not 2.39) cents per share

It's not a lot for the individual receipt holder but if you take the amount 'missing' (0.003 cents) and apply it too the total number of receipts (2.5 billion), it appears we are short roughly $75k.

Can someone check my maths? I hope just did something wrong and this is nothing to worry about.

[MAC]

What a fantastic investment MEL has turned out to be - now trading at 1.61 after the 8.8c div. I had a post election valuation of 1.55 (Morningstar 1.16....), but that might have been a little light. In any event no plans to sell. has become my biggest holding.

Was going to pick it in the stock picking contest but PT said it wasn't allowed...!

Well done Black Knat, research reaps rewards.

[sb9]

Couldn't agree more and make that $1.63 as we speak. What's interesting is the depth shows not many sellers but heaps of buyers, interesting!!!

[silu]

Buying a whole lot at IPO and doubled up when they were 90c was one of my better investment decisions of the past couple of years.

[bull....]

fantastic i had 20c + divs as my forecast without election result factored in so is the other 40c now because national won the election hahaa they were definitely trading at a big discount

[bull....]

actually since the election i hv meridian up 40% compared to mrp 13% , gne and cen around 8% so is one to assume from these figures mel is the top power company in nz based on investors wanting in?

[sharer]

Buying a whole lot at IPO and doubled up when they were 90c was one of my better investment decisions of the past couple of years.

Me too. Then worked back to get into MRP & GEN (admittedly initially dodged for various non-investment reasons).
Since getting in to all 3, i frequently try reworking the assessment to get what looks like a rational proportion of each, a fairly difficult calculation (a more honest word would be guesswork). Especially as so far it has never seemed rational to actually sell anything to free funds & it has more been a matter of saving up dividends to get funds for small expansions at opportune moments when others got nervous - but no hope of that working any more :)

[dingoNZ]

actually since the election i hv meridian up 40% compared to mrp 13% , gne and cen around 8% so is one to assume from these figures mel is the top power company in nz based on investors wanting in?

19.20% including all div and capital gains for MELCA, from 19th September :)

[McGyro]

What has caused today's price jump?

[sb9]

Oof...big volumes thro' today, more than 6 million shares traded...must be lot of instos chasing yields.

[sb9]

I think the large volumes have something to do with MSCI Index, which is to be reviewed early next month and have heard from few sources that MELCA and MRP are going in there and XRO might be coming off that, could someone confirm or deny??

[777]

Interesting... I suspect a return of capital in February is also being factored in, but very difficult to know what that might be worth. Gut feel - 5 cps.

Why would they return capital when they will be collecting the final instalment of capital in April or May?

[Harvey Specter]

Why would they return capital when they will be collecting the final instalment of capital in April or May?That goes to the Government, not MEL doesn't it.

[777]

That goes to the Government, not MEL doesn't it.


Correct. My mistake.

[sb9]

One big seller @$1.87 with more than Million shares on offer.

[macduffy]

Meridian cans Queensland hydro project.

http://www.meridianenergy.co.nz/about-us/media-centre/media-releases/hydro-wind-solar/renewable-project-binned-due-to-energy-policy-uncertainty/

[Harvey Specter]

Not sure why the price spiked yesterday on no news. M&D investors buying in for the new year since it did so well last year?

I have now completed my sell down. I got more than I wanted in the IPO (fantastic) so have now sold down to the amount I want to pay the balance on later in the year. Will be interesting to see what effect the conversion has on the shareprice (before and after).

[horus1]

the key short term question for Meridian must be what happens at Tiwai. Does anybody have a view in light of global commodity prices and demand for aluminium.

[dingoNZ]

Alu was up 5% in the past 12 months but come back a bit in the last month. At current levels Tiwai is profitable and isn't as risk, I would imagine they won't be going anywhere for a while yet. But we shall find out around mid year!

[newtrader]

Alu was up 5% in the past 12 months but come back a bit in the last month. At current levels Tiwai is profitable and isn't as risk, I would imagine they won't be going anywhere for a while yet. But we shall find out around mid year!

Weakness on the kiwi dollar is probably also helping Tiwai.

[bunter]

Not sure why the price spiked yesterday on no news. .
Some sort of capital return due in Feb, I seem to remember.

Slightly overvalued now - fair value $1.62, by my model, which is 46th best value of the 70 stocks I follow.

[xafalcon]

the key short term question for Meridian must be what happens at Tiwai. Does anybody have a view in light of global commodity prices and demand for aluminium.

This question is relevant to all electricity generators. While Meridian holds the supply contract, if that extra electricity is released to market it will reduce returns of all generators and sp will follow.

[Jantar]

This question is relevant to all electricity generators. While Meridian holds the supply contract, if that extra electricity is released to market it will reduce returns of all generators and sp will follow.
Not true. Because of line constraints that extra energy cannot be transferred out of the lower South Island. So the only stations affected will be Manapouri, Roxburgh and Waipori hydro (and Clyde to a lesser extent), and White and Mahinerangi wind farms. Contact owns the Clyde and Roxburgh stations, but also has significant geothermal and thermal plant in the North Island. So overall it would only be Meridian that would be adversely affected in the short term.

Once Transpower upgrade the circuits to all more of Manapouri's generation to flow north, then that would co-incide with the scheduled progressive shutdown of genesis's remaining Huntly coal fired units, the net gain to the nation in energy by adding Tiwai's demand and subtracting Huntly's generation is only 85 MW.

[Harvey Specter]

Once Transpower upgrade the circuits to all more of Manapouri's generation to flow north, then that would co-incide with the scheduled progressive shutdown of genesis's remaining Huntly coal fired units, the net gain to the nation in energy by adding Tiwai's demand and subtracting Huntly's generation is only 85 MW.Is the contrait just around Manpouri or is it the whole south Island. I though there was a phase out for Tiwai exit which would give Transpower time to make the upgrade.

[MAC]

the key short term question for Meridian must be what happens at Tiwai. Does anybody have a view in light of global commodity prices and demand for aluminium.

One should not forget that a certain percentage of thermal generation is required to hedge weather dependent generation. Research shows that both hydro and wind seasonal dry year events correlate closely. So it is not a simple as weighing up a hypothetical demand exit with thermal decommissioning.

Meridian does not own any thermal plant for marketing reasons, but they do instead heavily hedge contract for thermal generation as they must.

Personally, I don’t see Tiwai backing out fully anytime soon, they may continue to offload potlines during cyclical commodity cycle lows, as much of their product is high purity value added stuff it does very well during cyclical highs. They may routinely threaten to leave when they think they are being screwed on power price negotiations and have done so off and on for the last twenty years.

They have also looked at building their own generation plant in the past which I understand would be competitive, even a little cheaper, than the Meridian contract pricing structure, this would be more of a concern to Meridian, and to electricity wholesale prices in general.

A build option would only practically tenable though when existing contracts with Meridian require renewal, and they didn’t take up the option last time around.

Just relax the status quo will continue for a few years yet.

[horus1]

Tiwai is heavily subsidised on power price. It has the highest security of transmission in the country. With the technology changes which are becoming available in the electricity industry building or upgrading any transmission lines is not economic, . you cannot rely on a 40 year economic life any more, more like 20 years. As it is a number of very expensive Transmission upgrades built in the last 10 years will have to be written off. i.e. 400KV from AK to Whakamaru.

[Jantar]

Is the contrait just around Manpouri or is it the whole south Island. I though there was a phase out for Tiwai exit which would give Transpower time to make the upgrade.
The constraint is the lines between Roxburgh and the Waitaki River stations with the ROX-NSY circuit being the main issue. Transpower do have a plan to upgrade the circuit should it be needed, but it would take a couple of years to get resource consent then another 3 years to replace the line.

[MAC]

Tiwai is heavily subsidised on power price. It has the highest security of transmission in the country. With the technology changes which are becoming available in the electricity industry building or upgrading any transmission lines is not economic, . you cannot rely on a 40 year economic life any more, more like 20 years. As it is a number of very expensive Transmission upgrades built in the last 10 years will have to be written off. i.e. 400KV from AK to Whakamaru.

It's a common public saying in NZ isn't Horus that Tiwai are subsidised, I'm sure Tiwai would have never seen it that way, particularly ever since the government screwed them over so overtly shortly after the get go in the early 1970's.

Two high efficient F class units in combined cycle sitting at Tiwai right now (800MW) with gas prices where they are might just make Meridian look comparatively damned expensive for base load demand. They have the switchyard and wharf infrastructure on site, only thing holding them back is the contractual commitment to MEL and whatever backdoor agreement they reached with the government last time around.

[horus1]

for years Tiwai paid 4.5c per Kwh , and this included 1.5c for the transmission. I believe from what is in the papers that they are paying about 5c now for energy. I have read the original contract and it was watertight . They were and are heavily subsidised. Domestic customers in NZ are paying 24-26c . The electricity reforms in NZ have been a di

[MAC]

for years Tiwai paid 4.5c per Kwh , and this included 1.5c for the transmission. I believe from what is in the papers that they are paying about 5c now for energy. I have read the original contract and it was watertight . They were and are heavily subsidised. Domestic customers in NZ are paying 24-26c . The electricity reforms in NZ have been a di

Different perspectives from different commercial standings.

The thing about base load demand is that it matches base load generation with, well one could say 100% utilisation. If hypothetically Tiwai were to build their own generation station as a viable commercial prospect that would set the market price for base load demand, and because of that it roughly sets the market price Meridian will ultimately ever get.

So there is no formal subsidisation is there, it's a public perception of a market reality.

Generally though, just my opinion, the government are still beholding to Tiwai for having screwed them in the 70's, they teased Comalco to New Zealand with the promise of cheap power and then once Tiwai was built they reneged and raised the price.

I don't think Tiwai would have stuck with Meridian if the politics during the last two negotiations would have been more favourable for them to have gone their own way with thermal plant build. It's not been politically easy to get a resource consent for coal or gas fired stations for some time now.

I’m sure they must see regulation, SOE politics and the Labour party as one of the biggest risks to their business, they have been screwed over by the government in the past after all.

[horus1]

I think I understand electricity economics a bit better than most .The problem in your analysis is that neither hydro nor cogen plants are base load. I assure you when I showed the rio tinto board around Manapouri in the 80,s they were srewing the govt not the other way around

[MAC]

I think I understand electricity economics a bit better than most .The problem in your analysis is that neither hydro nor cogen plants are base load. I assure you when I showed the rio tinto board around Manapouri in the 80,s they were srewing the govt not the other way around

I never said hydro or cogen are base load plants Horus, I've only referred to coal and combined cycle.

Government market manipulation aside, at the end of the day the market determines price, and base load demand as a market in itself, comes with lower average power prices, and that is so in most parts of the world.

That is in no way subsidisation, it's market supply and demand. The perception of subsidisation is merely a misnomer and advantageous politics that comes out at negotiation time.

[troyvdh]

Gee ...the instos are piling in....one crossing of 275000.....love to have a beer with that bloke/madam.

[sb9]

http://www.cnbc.com/id/102331611

This could throw some light re the aluminium demand.

[theace]

Not too far from doubling in value!

[Sideshow Bob]

Not too far from doubling in value!

Put in the divvies, and close to 110% total return since the float!!

[PartyPooper]

Sold MELCA at 1.40 and MRP at 2.30 biggest mistake in a long time.

[RGR367]

Put in the divvies, and close to 110% total return since the float!!

Yeah and a little bit more and I'll be inclined to follow these lyrics from the song The Gambler .............. :t_up:

You've got to know when to hold 'em
Know when to fold 'em
Know when to walk away
And know when to run
You never count your money
When you're sittin' at the table
There'll be time enough for countin'
When the dealin's done

[dingoNZ]

Was my best investment of 2014, I sold out recently. Remember the installment is due in May :)

I will be buying back in after it begins trading as MEL (after installment is paid) I imagine there will be some selling pressure from retail holders not wanting to front up the 2nd installment.

[bunter]

Was my best investment of 2014, I sold out recently. Remember the installment is due in May :)

I will be buying back in after it begins trading as MEL (after installment is paid) I imagine there will be some selling pressure from retail holders not wanting to front up the 2nd installment.

It's possible the company will announce a contribution to this payment in February, by way of capital return.

[Harvey Specter]

Was my best investment of 2014, I sold out recently. Remember the installment is due in May :)Thats why I have sold down to just the amount I want to hold going forward. Not sure whether to be dissappointed I sold out early, or thankful I got allocated more than I was expecting (still hold more than I do for GEN despite applying for the same amount).

[McGyro]

Is there any evidence or reasoning that suggests Meridian may contribute to the payment?

[sb9]

Well, they mentioned late last year about some sort of capital return in early part of this year. So guessing they might adjust the instalment payment against capital return. Not entirely sure though. Thought of selling my IPO holding in the last few days, however resisted the temptation on back of capital return news, lets see.

[Harvey Specter]

Well, they mentioned late last year about some sort of capital return in early part of this year. So guessing they might adjust the instalment payment against capital return. Not entirely sure though. Thought of selling my IPO holding in the last few days, however resisted the temptation on back of capital return news, lets see.The installment goes to the government (seller of the shares), any capital repayment comes from the company.

They will be completely separate, though they may time them together to assist shareholders and minimise trading in shares (need to raise funds for the installment receipt)

[dingoNZ]

Plus it is not tax efficient in the slightest so I doubt it

[Harvey Specter]

Plus it is not tax efficient in the slightest so I doubt itIf its a capital return (opposed to dividend), there is no tax. Likewise, if they have heaps of IC's then no tax inefficiency.

[bunter]

Plus it is not tax efficient in the slightest so I doubt it

'It' = capital return?

[kyanar]

So price has bounced up to 1.99, though I can't see any announcements or anything that might have driven it - any idea why it's suddenly worth so much after sitting for quite a while around the 180s?

[macduffy]

So price has bounced up to 1.99, though I can't see any announcements or anything that might have driven it - any idea why it's suddenly worth so much after sitting for quite a while around the 180s?

Catching up with the recent firming of other gentailer stocks?

[BFG]

So price has bounced up to 1.99, though I can't see any announcements or anything that might have driven it - any idea why it's suddenly worth so much after sitting for quite a while around the 180s?

The hunt for yield continues. Money has to go somewhere, especially all those Kiwisaver bucks we all keep shovelling to our respective fund managers ;)

[dingoNZ]

So price has bounced up to 1.99, though I can't see any announcements or anything that might have driven it - any idea why it's suddenly worth so much after sitting for quite a while around the 180s?


Chasing yield, NZD is collapsing against USD (down over 1% today) I'd expect it to pass the $2.00 mark tomorrow to be honest.

[McGyro]

So price has bounced up to 1.99, though I can't see any announcements or anything that might have driven it - any idea why it's suddenly worth so much after sitting for quite a while around the 180s?

There had been talk about a possible Meridian contribution to the May(?) payback. Supposedly there is to be an announcement this month. Lets hope today's spike was caused by an information leak. I had intended selling about now in case there was a pre-payback price dip, and then buying in after the dust settles. If the announcement tags the contribution until after the payback date, then it might reduce the dip. I haven't yet thought this out clearly, but I'll be hanging on for a bit longer yet.

[Jantar]

Then, if the Reserve Bank reduces the OCR as rumoured, the price could go higher still.

[axe]

Then, if the Reserve Bank reduces the OCR as rumoured, the price could go higher still.

Where do you get your rumour????

Date 29 January 2015
Statement issued by Reserve Bank Governor Graeme Wheeler
"In the current circumstances, we expect to keep the OCR on hold for some time. Future interest rate adjustments, either up or down, will depend on the emerging flow of economic data."

link http://www.rbnz.govt.nz/news/2015/6006340.html

[Harvey Specter]

Where do you get your rumour????

Date 29 January 2015
Statement issued by Reserve Bank Governor Graeme Wheeler
"In the current circumstances, we expect to keep the OCR on hold for some time. Future interest rate adjustments, either up or down, will depend on the emerging flow of economic data."

link http://www.rbnz.govt.nz/news/2015/6006340.htmlaustralia just reduced theirs. Inflation is below 1%. If they introduce a different tool to tackle house prices, then they will.

[BFG]

australia just reduced theirs. Inflation is below 1%. If they introduce a different tool to tackle house prices, then they will.

Wholeheartedly agree.

Axe, you need to watch the wording in the RBNZ press releases. It has changed significantly between OCR meetings.

[brend]

Where do you get your rumour????

I think this comment is better from Wheeler

"In the current circumstances, we expect to keep the OCR on hold for some time. Future interest rate adjustments, either up or down, will depend on the emerging flow of economic data," he said.

Read more: http://www.3news.co.nz/business/reserve-bank-keeps-ocr-on-hold-2015012909#ixzz3QiAb20Cv

[Xerof]

Every owner of MELCA is required to pay 50 cents to the Crown. This will not be adjusted. If MEL decide to make a 'contribution' it would have to be in some other form. So there would be a two step process.

I think you're probably all right with your reasons for the further rise - a more balanced outlook for interest rates plus a possibility of a reduction generated by Wheeler's latest statement, and some firming of speculation around handing cash back to shareholders in whatever form that may take.

[MAC]

It may depend also on where inflows have come from and where they will go when the tide goes out. Has anyone data on percentage change in offshore holdings in MELCA and other large cap yield plays.

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11394962

[sb9]

Well, touched $2 now....

[bull....]

much better result than contacts, with nice div

[Joshuatree]

YES re 19.2c in divs for the year!

[Baa_Baa]

Excellent results today, again. Total divi's and capital gain easily sufficient to cover the installment receipts, or put another way, have pretty much paid for the IPO, currently 82% to-date cap+div but not including this 1HY divi. Brilliant!

Refer Page 2 of the CEO/Chair report, sections "Installment Receipts" and "Capital Management" ... https://www.meridianenergy.co.nz/assets/Investors/Reports-and-presentations/Interim-results-and-reports/2015/Half-yearly-report-for-the-period-ending-31-December-2014.pdf

Gotta love this company, what a great performer.

BAA



Every owner of MELCA is required to pay 50 cents to the Crown. This will not be adjusted. If MEL decide to make a 'contribution' it would have to be in some other form. So there would be a two step process.

I think you're probably all right with your reasons for the further rise - a more balanced outlook for interest rates plus a possibility of a reduction generated by Wheeler's latest statement, and some firming of speculation around handing cash back to shareholders in whatever form that may take.

[dingoNZ]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11404245

MELCA has always been my favorite of the generators, I've sold out entirely, I'll buy back in after the capital payment in May. Well done to all holders, fantastic result!

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11404245

MELCA has always been my favorite of the generators, I've sold out entirely, I'll buy back in after the capital payment in May. Well done to all holders, fantastic result!

Hmm...me thinking the same, sell now and get back in later, its been great investment :)

[Joshuatree]

You'll miss 6.2c in Divs plus pay brokerage. Have you got price points it will drop to as people sell to pay their 50c.? Im thinking with such a strong divi even after the 5o c instalment the price may not drop as much as some think as Global and local money is looking for good safe yields .

[sb9]

You'll miss 6.2c in Divs plus pay brokerage. Have you got price points it will drop to as people sell to pay their 50c.? Im thinking with such a strong divi even after the 5o c instalment the price may not drop as much as some think as Global and local money is looking for good safe yields .

Yeah agreed on dividend front. I'm just guessing there will be bit of weakness around instalment payment time as people need to fork out extra money and that might cause some hasty selling by some at last minute, especially those who haven't planned for extra payment.

[macduffy]

Yeah agreed on dividend front. I'm just guessing there will be bit of weakness around instalment payment time as people need to fork out extra money and that might cause some hasty selling by some at last minute, especially those who haven't planned for extra payment.

It's a toss-up, isn't it!

Depends on how many follow that strategy; how much others - insto's particularly - see it as an opportunity to increase holdings in a weak market; whether shareholders might prefer to sell other stocks to raise the ready; the mood of the market generally, etc.

I'm no help!

;)

[bull....]

electricity demand up yoy even with top up payment soon it offers mean yield

[sb9]

What's up with sp today, seem to be going higher and higher with very thin sell side...

[axe]

It's a toss-up, isn't it!

Depends on how many follow that strategy; how much others - insto's particularly - see it as an opportunity to increase holdings in a weak market; whether shareholders might prefer to sell other stocks to raise the ready; the mood of the market generally, etc.

I'm no help!

;)

I think the insto's will be pretty keen to ensure a smooth transition during the installment receipt payment window.

[Baa_Baa]

+$0.105 .. 5.1%, 5.8m vol @ $12.38m ... t o d a y, the transition gets smoother every day. What a week!
:t_up:


I think the intos will be pretty keen to ensure a smooth transition during the installment receipt payment window.

[Traderx]

much as I love MEL, it looks very overdone to me. Mkt cap is effectively $6.8 billion. This is priced for perfection. I.e Tiwai stays open, no droughts ever, a good price received for the 150mw odd liberated from Tiwai shortly, favourable Tpm outcome, favourable RET outcome, NZ demand growth resumption etc.

Disc do not hold

[Stranger_Danger]

Yep, as much as I hate to say it, MELCA is heading into the sell zone. But where to put the cash? Ugh, I won't be popular for this, but I enjoyed the GFC period a lot more than today, in terms of finding attractively priced investments.

[McGyro]

Yep, as much as I hate to say it, MELCA is heading into the sell zone. But where to put the cash? Ugh, I won't be popular for this, but I enjoyed the GFC period a lot more than today, in terms of finding attractively priced investments.

Tread carefully; I sold out at $2 a couple of days ago in ill-considered anticipation of a downwards rebound. Broke all my rules about selling only after detailed analysis and having a cooling-off period. Been kicking myself ever since. Either way, its been quite a ride.

[IAK]

Interesting article on SOE sales:

Almost a year after the last (official) state asset sale, David Hargreaves has a look at how the investors - and the taxpayers - have fared

http://www.interest.co.nz/opinion/74219/almost-year-after-last-official-state-asset-sale-david-hargreaves-has-look-how-investo

[Joshuatree]

Int thanks IAK. $3 billion in gains and divs the taxpayers aren't going to benefit from.And a $4.7 billion return mmmh

"Collectively, therefore, the shareholdings sold are now worth about $2.5 billion more than the New Zealand taxpayer, courtesy of the crown, received for them. Add in the $580 million worth of dividends and that is north of $3 billion of value that the taxpayers are not seeing thanks to the asset sale

[BlackPeter]

Int thanks IAK. $3 billion in gains and divs the taxpayers aren't going to benefit from.And a $4.7 billion return mmmh

"Collectively, therefore, the shareholdings sold are now worth about $2.5 billion more than the New Zealand taxpayer, courtesy of the crown, received for them. Add in the $580 million worth of dividends and that is north of $3 billion of value that the taxpayers are not seeing thanks to the asset sale

Actually - it was not really courtesy to the crown that the new shareholders benefitted that much. The crown would have received a much better price for the shares they sold if Green / Labour wouldn't have run their irresponsible scare mongering campaign against the electricity generators. While (as one of the people purchasing the shares) I am thankful that the Left made this venture so profitable - as a tax payer I am annoyed that they decided to waste billions of our money for cheap political gain.

[Baa_Baa]

If the govt has a $1 asset and sells 1/2 of it for $0.5 (bank that), and the remaining half doubles back to $1, plus dividends (bank that too). Seems like a good deal for the govt.

[Joshuatree]

Actually - it was not really courtesy to the crown that the new shareholders benefitted that much. The crown would have received a much better price for the shares they sold if Green / Labour wouldn't have run their irresponsible scare mongering campaign against the electricity generators. While (as one of the people purchasing the shares) I am thankful that the Left made this venture so profitable - as a tax payer I am annoyed that they decided to waste billions of our money for cheap political gain.

Don't want to get into politics here so i will agree to disagree. Meanwhile the s/p keeps going UP. $2.195 as i type with over 2million shares thru.:p

[GTM 3442]

. . . While (as one of the people purchasing the shares) I am thankful that the Left made this venture so profitable - as a tax payer I am annoyed that they decided to waste billions of our money for cheap political gain.

Except it wasn't a political gain. The only people to gain were those who ignored the Labour/Green policy statement.

[sb9]

Don't want to get into politics here so i will agree to disagree. Meanwhile the s/p keeps going UP. $2.195 as i type with over 2million shares thru.:p

Glad I didn't sell out when I was planning to do so immediately after it crossed $2 after results announced.

[Joshuatree]

:) yeah i was weakening a little in my resolve as well. Watching closely as div nears.

[xafalcon]

What's up with sp? Is irrational exuberance finally being overtaken by common sense fundamentals?

[theace]

Looking at the MELCA upcoming divi on the NZX site:



Ex Dividend
Period
Amount
Supp.
Imputation
Payable
Currency


27/03/2015
Interim
4.800c
0.850c
1.870c
15/04/2015
NZD


27/03/2015
Special
1.400c
0.250c
0.540c
15/04/2015
NZD



What does Supp. Mean? And what do I end up with in hand?

[Harvey Specter]

Looking at the MELCA upcoming divi on the NZX site:



Ex Dividend
Period
Amount
Supp.
Imputation
Payable
Currency


27/03/2015
Interim
4.800c
0.850c
1.870c
15/04/2015
NZD


27/03/2015
Special
1.400c
0.250c
0.540c
15/04/2015
NZD



What does Supp. Mean? And what do I end up with in hand?Supplementary is for foreigners so ignore it (it is fair so dont worry about them getting more either).

You will get the 'amount' less about 5% withholding tax.

[IAK]

Let the games begin - "Questions linger over profitable Tiwai Point smelter's value, Rio Tinto says." http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11414253

[McGyro]

Still a bit confused as to what will happen when the 50 cents payback time comes around. At present I have the 50 cents earning interest elsewhere. When I pay it back to the government as a MELCA shareholder, it no longer earns me anything and would, in effect, drop the worth of by shares by 50 cents. Wouldn't need to jump in price by 50 cents at payback time to justify hanging on to them, instead of selling now and buying when the dust settles. Is there a more optimistic way of looking at this?

[Snow Leopard]

Still a bit confused as to what will happen when the 50 cents payback time comes around. At present I have the 50 cents earning interest elsewhere. When I pay it back to the government as a MELCA shareholder, it no longer earns me anything and would, in effect, drop the worth of by shares by 50 cents. Wouldn't need to jump in price by 50 cents at payback time to justify hanging on to them, instead of selling now and buying when the dust settles. Is there a more optimistic way of looking at this?

Hi

What should happen is that you hand over your MELCA (Installment Receipt) and 50c and in return get one MEL (Ordinary Share) which in theory will trade at a 50c higher price.

Best Wishes
Paper Tiger

[PSE]

Int thanks IAK. $3 billion in gains and divs the taxpayers aren't going to benefit from.And a $4.7 billion return mmmh

"Collectively, therefore, the shareholdings sold are now worth about $2.5 billion more than the New Zealand taxpayer, courtesy of the crown, received for them. Add in the $580 million worth of dividends and that is north of $3 billion of value that the taxpayers are not seeing thanks to the asset sale
They may be selling for 2.5 billion more but it doesn't mean they are worth that much, at over $2 this excellent company has reached dangerous levels of overvaluation due to shareholder exuberance.
I was buying MELCA at $.90 but I sold out and left it to the speculators. The PE ratio is now around 30 with a PB ratio of 2 and the company has no growth prospects.
I swapped for TPI on the ASX which is a similar utility type stock but now selling below book with a PE of 20 but does have a prospect of growth. Its dividend is only 3% which is preferable to MELCAs highly dodgy paying out of free cash flow scam.
As if the assets don't need to be replaced.

[ratkin]

MELCA - Final day of trading: Tuesday, 29 April 2015
MELCA - Final quotation date: Tuesday, 29 April 2015
MEL - Quotation date: Wednesday, 30 April 2015
Record date: 5.00pm, Monday, 4 May 2015
Final instalment payment period opens: Wednesday, 6 May 2015
Final instalment payment due: Friday, 15 May 2015

So price dropping today because people dont want to have to pay extra?

[ratkin]

Just sold at 1.98 on the grounds that the extra payment will create plenty of selling pressure, and there should be opportunities to re enter more cheaply

[blackcap]

Bit silly really if the fall today is attributed to the announcement made today by the company as this information has been known now for more than a year.

[bull....]

wonder if meridian lost the te wai point contract? its being offered around to other parties?

[dingoNZ]

I think its just punters selling down so they can pay their installment receipt due in May. Unless they've a leaky ship and half the market knows something we don't.....

[ratkin]

I think its just punters selling down so they can pay their installment receipt due in May. Unless they've a leaky ship and half the market knows something we don't.....

Looks like i sold at right time. There always likely to be a sell off before the instalments due, especially when was looking toppy anyway.
Decision now will whether to buy back in at some point

[IAK]

Good call ratkin. I hope the SP keeps dropping, I want to double up on my IPO holdings.

[Baa_Baa]

Divi time next week, 15 May should crease a smile back on the faces of belligerent holders, especially those from the IPO. Another energy stock that's taken a beating lately. Sure some people will fold due to the instalment payments, some will be enjoying taking profits, but IPO stalwarts are well ahead and with the SP thoroughly oversold at these levels, good buying opportunity has emerged as well.
7267
BAA

[percy]

I brought in at the IPO,and it was always my intention to pay the instalment,which I will do.
I congratulate Ratkin and others who sold foreseeing the instalment demand would shake out sellers.
Thank you for the Screen Shot.
I notice the sp at $1.85 is still ahead of the 200day EMA which is $1.72.
It is still my intention to keep my MEL shares in my long term portfolio.

[dingoNZ]

One would imagine those who paid the IS would be planning to hold for the long term, at a guess those profit taking would sell before the IS is due. Just my 2c. I will be buying back in just prior to it being due.

[Baa_Baa]

MELCA will become MEL shortly, a long termer for my portfolio. I've only bought the IPO, and recently sold 20% of that IPO issue to part cover the instalment receipt and will top up the instalment balance from another recent sale of an under performer. At present with a holding average of $1 (the IPO price), MELCA has been a great performer even at the current oversold price. The $0.50 instalment payment will bring back the overall gain to just excellent, as opposed to stellar at present. And all this for a solidly profitable utility, countercyclical and promising healthy returns at relatively low risks for the long haul. The only concern on the horizon is whether the anti-privatisation lobby gets in power, though I'll concern myself with that closer to the time. Back in the bottom drawer they go, a happy holder.

BAA


One would imagine those who paid the IS would be planning to hold for the long term, at a guess those profit taking would sell before the IS is due. Just my 2c. I will be buying back in just prior to it being due.

[Joshuatree]

So Rio have been trying to find a buyer for Tiwai pt smelter for a long time. The Smelter is old; old plants close; the only reason it hasn't is govt handouts, cheap electricity and the huge cost of rehabilitation . So IF the writing is on the wall what effect will that have on Meridian?. ComCom are supportive of an appropriate return on investment for MEL so despite the sudden excess of power with Tiwai gone Meridian would still be a good income only investment but the s/p will drop ?. And industry would be attracted to cheapish power and slowly fill the Gap left by Tiwai.

[percy]

MELCA will become MEL shortly, a long termer for my portfolio. I've only bought the IPO, and recently sold 20% of that IPO issue to part cover the instalment receipt and will top up the instalment balance from another recent sale of an under performer. At present with a holding average of $1 (the IPO price), MELCA has been a great performer even at the current oversold price. The $0.50 instalment payment will bring back the overall gain to just excellent, as opposed to stellar at present. And all this for a solidly profitable utility, countercyclical and promising healthy returns at relatively low risks for the long haul. The only concern on the horizon is whether the anti-privatisation lobby gets in power, though I'll concern myself with that closer to the time. Back in the bottom drawer they go, a happy holder.

BAA

I would not worry about the anti-privatisation lobby.
They have short memories, and the will find another issue to run with.
This issue cost them support and the country a lot of money.
They will not revisit it.

[Baa_Baa]

Nice and simple, "The issue price for MEL shares will be calculated based on the Closing Price of the MELCA instalment receipts on 29 April 2015 plus the Final Instalment Amount" of NZD$0.50 https://www.nzx.com/companies/MEL/announcements/263029

Mark it in your diaries holders, your shiny new MEL shares issue on Thurs 21 May. The alert amongst you will realise a lead time of around a month, so also note:

"Expected Commencement of Trading on the NZX Main Board on a deferred settlement basis: Thursday, 30 April 2015. Expected Commencement of Trading on the NZX Main Board on a normal basis: Friday, 22 May 2015"

[Harvey Specter]

"Expected Commencement of Trading on the NZX Main Board on a deferred settlement basis: Thursday, 30 April 2015. Expected Commencement of Trading on the NZX Main Board on a normal basis: Friday, 22 May 2015"
What does that mean. You can sell your MEL from 30th but your broker will probably make you pay the 50c installment when you sell, the new shareholder having bought full MEL shares with no further payment?

[Baa_Baa]

May 15th is the last day for paying the $0.50 instalment. It's probably easier just to read the announcement.


What does that mean. You can sell your MEL from 30th but your broker will probably make you pay the 50c installment when you sell, the new shareholder having bought full MEL shares with no further payment?

[Joshuatree]

So Rio have been trying to find a buyer for Tiwai pt smelter for a long time. The Smelter is old; old plants close; the only reason it hasn't is govt handouts, cheap electricity and the huge cost of rehabilitation . So IF the writing is on the wall what effect will that have on Meridian?. ComCom are supportive of an appropriate return on investment for MEL so despite the sudden excess of power with Tiwai gone Meridian would still be a good income only investment but the s/p will drop ?. And industry would be attracted to cheapish power and slowly fill the Gap left by Tiwai.

Has this been discussed back a few threads? Will scroll back at see what i can find.

[dingoNZ]

I don't imagine Tiwai will be shut in the forseable future, it is currently 'in the money' with ALU prices and is expected to remain profitable. I don't think it will be shut before 2022. If Tiwai were (when it is eventually) to shut then the NZ electricity market would be oversupplied, meaning some of the generation would be required to be either switched off temporarily or shut down. Renewable energy would not be switched off, my pick would be that the Huntly plant would be shut off and the supply between the generators would be somewhat shared by swaptions/CFD's so that they can meet market demand.

[stoploss]

I don't imagine Tiwai will be shut in the forseable future, it is currently 'in the money' with ALU prices and is expected to remain profitable. I don't think it will be shut before 2022. If Tiwai were (when it is eventually) to shut then the NZ electricity market would be oversupplied, meaning some of the generation would be required to be either switched off temporarily or shut down. Renewable energy would not be switched off, my pick would be that the Huntly plant would be shut off and the supply between the generators would be somewhat shared by swaptions/CFD's so that they can meet market demand.
Heaven forbid electricity prices might actually go down .....only commodity that goes one way . ......

[percy]

I hope they go down tonight,as it is so cold here we have the heaters on.!!!!
What happened to the drought and lovely long warm Autumn.????

[airedale]

HI Percy, if only there was a government owned firewood company that Bill English could sell off. That would be another profitable float. I have just put another log on the fire.

[percy]

HI Percy, if only there was a government owned firewood company that Bill English could sell off. That would be another profitable float. I have just put another log on the fire.

Put an extra one on,I am on my way to your place!!
I don't have a fire place.
Nights like tonight I really miss it.
Heat pumps and heaters just don't give the same comfortable glow.!!
Hailing now.Was bucketing down awhile ago.!!

Did you ever have shares in Energy Corp?.Gerald Henry's dud,before he and his brother went onto DIL.Trying to turn sawdust into pellets for fires.!!

[dingoNZ]

Ahh I miss our old wet back fire place, nothing like it!!! Not very common up here in Auckland!!

[Baa_Baa]

The Jetmaster open fire is humming here. Nothing like an open fire ... ahhhh. Sorry MEL, you'll have to get me on the nightstore, our lounge is pure flame!

[huxley]

Article in stuff - http://i.stuff.co.nz/business/industries/67726996/New-Zealand-Aluminium-Smelters-calls-for-cheaper-power

[xafalcon]

This conversion of installment receipts to shares is a draw out shambles. You can apparently trade MEL from 30 April, but how many have you got? Zero. Until they are allocated a week after you must make payment on 15 May. How can you sell something that you don't have, or buy something nobody has? Nobody can verify how many MEL you have. And just because you have xxxx MELCA, doesn't mean you have or will have the same number of MEL. Since nobody can verify your trading balance, you could even sell your MEL shares through multiple brokers several times over. Share liquidity will potentially fall to zero for a month. Total shambles.

The whole process could have been so much quicker and simpler if MELCA closing price on 29 April was multipled by shareholding, then divided by (MELCA + $0.50) and this quantity immediately allocated as MEL. With the extra $0.50/share payment being used to purchase the balance of the original MELCA holding (MELCA - MEL)

I have blocked out the month with zero trading and zero access to money from sales (if they happen)

[warthog]

Meridian Energy monthly operating report for March 2015:
https://www.nzx.com/files/attachments/211279.pdf

[percy]

Meridian Energy monthly operating report for March 2015:
https://www.nzx.com/files/attachments/211279.pdf

Good to have you posting again.
You have been missed.!

[777]

This conversion of installment receipts to shares is a draw out shambles. You can apparently trade MEL from 30 April, but how many have you got? Zero. Until they are allocated a week after you must make payment on 15 May. How can you sell something that you don't have, or buy something nobody has? Nobody can verify how many MEL you have. And just because you have xxxx MELCA, doesn't mean you have or will have the same number of MEL. Since nobody can verify your trading balance, you could even sell your MEL shares through multiple brokers several times over. Share liquidity will potentially fall to zero for a month. Total shambles.

The whole process could have been so much quicker and simpler if MELCA closing price on 29 April was multipled by shareholding, then divided by (MELCA + $0.50) and this quantity immediately allocated as MEL. With the extra $0.50/share payment being used to purchase the balance of the original MELCA holding (MELCA - MEL)

I have blocked out the month with zero trading and zero access to money from sales (if they happen)


You will have exactly the same number of MEL as MELCA on the 30/4/15 but the MELCA won't become MEL until you pay the 50c instalment. Your second paragraph is total rubbish. The first theoretical trading price on the market will simply be 50c higher than the last MELCA share.

[mouse]

Pouring with rain all night. Snow up in the catchment for Meridian water. It will probably melt before Winter and fill up the lakes. Plenty of electricity. What about a price reduction, or an increased dividend?