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Thread: Meridian Float

  1. #46
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    What do people see the sp movement being when different events happen, ie start price of $1, after a year a 13.5% divi, then people trying to scrape together money for next installment (18 months and a bit away)?
    I know its a stab in the dark answer but just interested to see how you think Mr market will react.

    I heard the TAB were taking bets.

  2. #47
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    One scenario

    Short term: A great listing with instos buying up big; after listing as well, so a winner for staggers and investors

    med term : Cunliffe overdoes his aggressive attack(like team NZ ?) and shoots self in foot, and Key with the slippery silver tongue wins well at election. Great divs and sentiment keep the price healthy

    Long term. : Although Tiwai is an older less efficient plant , ALU prices recover and by 2017 the mkts are prepared to pay a little premium for green ALU )hydro power). S/p remains strong and divs way better than the bank continue.

    whats your poss scenario/s cheers J/t

  3. #48
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    I havn't decided on investing in Meridian yet, but here's a couple of random thoughts.

    Meridian's "green" status is just the luck of the draw. They missed out on all those nasty thermal stations when ECNZ was broken up.

    As others have noted, they still need to buy thermal generated power when the rain doesn't fall sufficiently in the right places.

    I can't see any rational business being prepared to pay over the odds for "green " aluminium.

    The eventual loss of the Tiwai contract, if it happens, will free up generation to be sold at better, market prices to other customers. Prices overall may fall but the losers, under most climatic conditions, will be the higher-cost generators, not Meridian.

    (Hmmmm.... I seem to be talking myself into investing in this company.)

    Last edited by macduffy; 23-09-2013 at 05:47 PM.

  4. #49
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    Quote Originally Posted by macduffy View Post
    I havn't decided on investing in Meridian yet, but here's a couple of random thoughts.

    Meridian's "green" status is just the luck of the draw. They missed out on all those nasty thermal stations when ECNZ was broken up.

    As others have noted, they still need to buy thermal generated power when the rain doesn't fall sufficiently in the right places.

    I can't see any rational business being prepared to pay over the odds for "green " aluminium.

    The eventual loss of the Tiwai contract, if it happens, will free up generation to be sold at better, market prices to other customers. Prices overall may fall but the losers, under most climatic conditions, will be the higher-cost generators, not Meridian.

    (Hmmmm.... I seem to be talking myself into investing in this company.)

    I think you are 100% right.Losing Tiwai would mean BIG worries for more expensive generators,and greater profits for Meridian.

  5. #50
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    I was asked today by an acquaintence whether there is a prospect of the Instalment Receipt secondary market price, ceterus paribus, being discounted if there is a differential between the retail cap of .60 cents, and the (higher) institutional price? ($1.80 for example)

    I'm leaning towards 'no' because anyone/everyone who buys on the market will be obligated to pay the higher price anyway, and retail holders only get the cap benefit if they don't sell. So I guess the 'obligation price' post IPO will always be seen as $1.80 and this is the benchmark on which the market will trade

    Interested in others' views on this, but makes me think if you want it, buy in the IPO. Those who are going to wait and see where it settles, could be giving up 20 cents.

  6. #51
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    Quote Originally Posted by Xerof View Post
    I was asked today by an acquaintence whether there is a prospect of the Instalment Receipt secondary market price, ceterus paribus, being discounted if there is a differential between the retail cap of .60 cents, and the (higher) institutional price? ($1.80 for example)

    I'm leaning towards 'no' because anyone/everyone who buys on the market will be obligated to pay the higher price anyway, and retail holders only get the cap benefit if they don't sell. So I guess the 'obligation price' post IPO will always be seen as $1.80 and this is the benchmark on which the market will trade

    Interested in others' views on this, but makes me think if you want it, buy in the IPO. Those who are going to wait and see where it settles, could be giving up 20 cents.
    As always I agree with you.!!

  7. #52
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    Quote Originally Posted by macduffy View Post

    The eventual loss of the Tiwai contract, if it happens, will free up generation to be sold at better, market prices to other customers. Prices overall may fall but the losers, under most climatic conditions, will be the higher-cost generators, not Meridian.
    Must say I am puzzled about what happens to the Manapouri power if Tiwai closes. At the moment that electricity cannot be sent north, apparently a new line up to Benmore is required.

    Does that use existing pylons or is a whole new line required?

    Also from what I've read, the electricity generated by Manapouri is heavy DC stuff because that is what smelters need. It isn't generated in a useful current for the NZ network. But I could be completely wrong.

    Anyone?

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    Quote Originally Posted by Winston001 View Post
    Must say I am puzzled about what happens to the Manapouri power if Tiwai closes. At the moment that electricity cannot be sent north, apparently a new line up to Benmore is required.

    Does that use existing pylons or is a whole new line required?

    Also from what I've read, the electricity generated by Manapouri is heavy DC stuff because that is what smelters need. It isn't generated in a useful current for the NZ network. But I could be completely wrong.

    Anyone?

    Looking at the wiring diagram (http://systemoperator.co.nz/f1686,84...Locatordwg.pdf) located at the bottom (MAN2201 & TWI2201), Tiwai is connected to Manapouri via two double circuit 220 kV transmission lines

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    Quote Originally Posted by Winston001 View Post
    Must say I am puzzled about what happens to the Manapouri power if Tiwai closes. At the moment that electricity cannot be sent north, apparently a new line up to Benmore is required.

    Does that use existing pylons or is a whole new line required?

    Also from what I've read, the electricity generated by Manapouri is heavy DC stuff because that is what smelters need. It isn't generated in a useful current for the NZ network. But I could be completely wrong.

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

    http://www.3news.co.nz/Grid-can-cope...3/Default.aspx

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

    The 630MW potentially available (inc the stranded 400MW) from Manapouri would go into the market, likely displacing thermal output at Huntly, so there are risks to both Meridian and Genesis.
    Last edited by MAC; 23-09-2013 at 09:22 PM.

  10. #55
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    See p 54 of the Offer Document for Meridian's view on this issue.

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    Quote Originally Posted by moosie_900 View Post
    Brent King is telling us all to invest in Meridian. Time to run away if there ever was a contrarian indicator in the market!!!

    http://www.sharechat.co.nz/article/9...watershed.html
    Followed your link moosie.. Must say I have never heard of him.. Which probably shows up my narrow reading..
    Jeez .. Another guru to follow ??.. Yeah right..

    He says..

    My view on the results of the above will be:
    •The price of Meridian will be more competitive (i.e. the Government will want an increase after listing not a decrease).
    • There will be a bigger effect on other companies (expect strong selling of second liners !).
    • The offer is probably the smart one to take because of this.

    I agree with his statements.. I do not really care whether he has given " BUM " statements before..

    Meridian is in my opinion.. A good deal whether you are in it for.. Stagging.. Short term.. or Long term..

    Having sorted that out.. What to sell down from my portfolio that is under performing is the biggest problem..

    Will probably end up buying what the purse can come up with in the next few weeks..

    It is a BUY .. IMHO.. DYOR..

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    "Grid can Cope" info very helpful thanks MAC and depreciation comments too. Great thread allround share traders cheers and good luck TNZ today.

  13. #58
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    One of the issues for MRP is the IPO sweetener. Investors who got in after IPO will not have any benefit. This created the situation of over-inflated IPO subscription and subdued demand afterwards I think, which probably explains how it has performed so far. This time with Meridian, do the investors buy after IPO still get the "pay later" benefit? Is there any other sweetener that will differentiate before and after IPO purchases?

  14. #59
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    Quote Originally Posted by The BOWMAN View Post
    One of the issues for MRP is the IPO sweetener. Investors who got in after IPO will not have any benefit. This created the situation of over-inflated IPO subscription and subdued demand afterwards I think, which probably explains how it has performed so far. This time with Meridian, do the investors buy after IPO still get the "pay later" benefit? Is there any other sweetener that will differentiate before and after IPO purchases?
    Post IPO investors still get the instalment receipt benefit. However, they dont get the benefit of the retail price cap.

    So say the IPO price is $1.80 with $1 paid up front, with retail investors only having to pay $1.60.

    What happens when the market determines the correct price is $1.70. To the IPO retail investor, they think their instalment receipt is worth $1.10 as they only have to pay 60c, but to the purchaser, they are only willing to pay 90c, since they will have to pay 80c. This could result in a locked in effect where retail investors are incentivised to hold (which is the point of the incentive)

    I guess this is the same issue with MRP where IPO investers will get extra shares issued (4% worth up to a cap) if they hold long enough.
    Free delivery worldwide with Book Depository http://www.bookdepository.co.uk

  15. #60
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    I can see the emergence of a secondary market where you offer your installment reciepts on a delayed delivery basis to take advantage of the price difference.

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