I have had same thoughts CJ but am not convinced people will necessarily sell out of CEN anymore than any other shares to invest in MRP. I for one will not sell CEN but intend on buying MRP if prospectus is acceptable.
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As others have pointed out, the current dry conditions affect MRP disproportionately, compared to the likes of CEN, at least in the short term. It may be that this has highlighted CEN's attractiveness - and is benefitting the SP.
There was a lot of selling pressure when News Corp dumped its SkyTV shares. To be fair, no one had any notice (unless they read this forum) so wouldn't have been building up a stock pile of cash.
But with the amount of big IPO's rumoured for this year, I do wonder if existing solid stocks will be held back as a result. I'm not concerned as I hold for the long term but will probably need to regig my portofolio a bit depending on what the IPO's look like.
Contact shares are moving upwards. Just when I thought investors would be selling to raise cash for the MRP float. Maybe CEN is seen as a better NZ energy based share than MRP?
How much really has to be sold to fund the MRP float. There has been enough time for the mums and dads to save up $2000-$3000 to buy the maximum they are likely to get. All the funds will have been accumulating cash for the event. And why would you sell CEN to buy what is coming on offer?
That is right. It is about keeping a balanced portfolio.
!/3 of my total investment portfolio is in CEN. My account was credited with a generous dividend yesterday .The last thing I would now consider spending that dividend on is MRP even though i originally registered my interest .
This drought has shown that MRP doesnt have a balanced generation-being 2/3 waikato hydro based.
In reality though what % of investors actually balance their portfolios. My guess is that a lot of people, myself included, have decided not to bother with MRP and are investing/topping up in CEN. $2000 worth of shares is just a waste of time for a lot of people.
I was thinking more of the fund managers balancing their portfolios in anticipation of a large allocation. They are the ones most likely to influence the share price of company the size of CEN.