With the NZX down 246 points or 2.2% atm and power company shares in particular whatsup ?
Contact down 9.7%
Genesis down 4.9%
Mercury down 8%
Meridian down 8.2% !
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With the NZX down 246 points or 2.2% atm and power company shares in particular whatsup ?
Contact down 9.7%
Genesis down 4.9%
Mercury down 8%
Meridian down 8.2% !
I know! Just asked the same question on the CEN thread.
in case you missed it
Owners of Tiwai Pt aluminium smelter seek talks with the Government, raising possibility of closure
https://www.nzherald.co.nz/business/...ectid=12278907
thats why all the gentailers are crashing
https://www.stuff.co.nz/business/116...elter-in-bluff
This is whats up - would dramatically cut revenues/cashflows
Even a 'renegotiation' (best case scenario) could cause revenues/cashflows to stagnate = dividends no longer expecting to increase at or above inflation (and possibly even decrease) = very, very bad for companies that are valued basically off being a dividend payer (as they are overvalued to ridiculously overvalued, depending on the gentailer, on any other metric other than yield)
I have never taken much notice of the Morningstar recommendations, but they have a big red SELL on MEL
They've had a long run of good performance so I'm not that worried about some adjustment to valuations.
I'm more concerned about local economic factors like long running under-target CPI, low business confidence, low impact fiscal policy and RBNZ not having many bullets left. Tiwai alone isn't a high impact event but the cumulative pressure may cause a downturn.
Rio Tinto having a go again can’t blame them with JK chucking them cash a few years ago. The reality is closing the smelter would cost a load and it’s still profitable at these prices