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Thread: Power shares

  1. #771
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    Quote Originally Posted by Jantar View Post
    You forgot NWF at 58%.
    i did forgot all about this stock hasnt really ever been on my radar as a worthwhile investment but i guess a rising tide lifts all boats.
    one step ahead of the herd

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    Well MR S what wrong with this little high div yield stock. Its not as if the gods arnt up there! No or low growth?
    Last edited by Waltzing; 08-01-2021 at 01:01 PM.

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    Quote Originally Posted by Waltzingironmansinlgescul View Post
    Well MR S what wrong with this little high div yield stock. Its not as if the gods arnt up there! No or low growth?
    NZ Windfarms seems a well run company for what it is. Personally I like to invest in the 'big market players', one of the top three in their chosen market. If you are a 'big market player' your future in five to ten years time is more secure as you are less likely to be 'pushed around' or 'held to ransom' on price.

    I think any threat to NZ Windfarms will likely come from the mismatch of generation capacity to (retail) customers. Wholesale pricing of power can be stretched -both ways. NWF don't have any retail customers. I am not sure that large companies (big five gentailers) really worry that much about minnows like NWF. But I think it is possible that natural movements in the market that the big boys take in their stride could make things very difficult for minnows like NWF. The ultimate threat to NWF IMO will come because of market collateral damage, not a targeted minnow attack.

    Some of these risks can be unwound by writing contracts into the power futures market. But IMO it will never be as easy for the likes of 'NZ Windfarms' compared to a vertically integrated Gentailer. Yet that doesn't mean I would be putting money into a gentailer today. Value is the ultimate investment driver for me. A good company, overvalued, can make a poor investment. I do see overvaluation in the gentailers.


    SNOOPY
    Last edited by Snoopy; 08-01-2021 at 04:23 PM.
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  4. #774
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    Smelter to stay open to Dec 2024..https://www.nzx.com/announcements/366175

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    This is a huge bombshell - anybody and everybody thought Tiwai was here to stay permanently and all the power co's rallied to ridiculously record high levels... almost despicable CEN and MEL are trying to spin this as good news.

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    Quote Originally Posted by trader_jackson View Post
    This is a huge bombshell - anybody and everybody thought Tiwai was here to stay permanently and all the power co's rallied to ridiculously record high levels... almost despicable CEN and MEL are trying to spin this as good news.
    Always just a matter of when not if it closed.

    Hopefully agreement has been on commercial terms (sure it would have been, I think.....) and not done to fill an election promise??

    Election 2020: Labour promises to keep Tiwai smelter open longer | Stuff.co.nz

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    Quote Originally Posted by Sideshow Bob View Post
    Always just a matter of when not if it closed.

    Hopefully agreement has been on commercial terms (sure it would have been, I think.....) and not done to fill an election promise??

    Election 2020: Labour promises to keep Tiwai smelter open longer | Stuff.co.nz
    There is no bombshell with this, it may also stay open past that date, really this is as much certainty on it as there has been in recent times.

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    Quote Originally Posted by Raz View Post
    There is no bombshell with this, it may also stay open past that date, really this is as much certainty on it as there has been in recent times.
    It is almost certainly not going to stay open past that date - the next 4 years will probably be a process of gradual wind down and jobs will be gradually lost instead of almost all immediately lost later this year - so it wasn't a worst case 'hard' exit [very bad news] scenario, rather, just bad news for the power sector being confirmed - and it both CEN and MEL have had to reduce their pricing to be able to secure these last 4 years. Probably about as best outcome as the south could want, but overall certainly not a good outcome for the power sector in general.

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    Quote Originally Posted by trader_jackson View Post
    It is almost certainly not going to stay open past that date - the next 4 years will probably be a process of gradual wind down and jobs will be gradually lost instead of almost all immediately lost later this year - so it wasn't a worst case 'hard' exit [very bad news] scenario, rather, just bad news for the power sector being confirmed - and it both CEN and MEL have had to reduce their pricing to be able to secure these last 4 years. Probably about as best outcome as the south could want, but overall certainly not a good outcome for the power sector in general.
    As with all these deals, the devil will be in the detail, which we just don't know yet. Meridian made a pretty generous offer on energy charges (a combined multi-year $250m discount) last year that was rejected. The bit of the bill that Meridian could not control was the line charges. We have to assume that Transpower has come to the party on these. But to what extent? Whether Meridian has had to bite further into their own profit margins further is unknown.

    I disagree with your assessment TJ. I don't think you can gradually wind down a potline. You either operate it or you don't. So I see employment stabilised at today's levels right through until 2024. The four year timetable to closure is useful, because it gives time for Transpower to upgrade their transmission lines to get all that stranded power further north if needed. It also gives time for a hydrogen fuel plant to be built if that indeed is seen as an alternative industry that could take over from Tiwai.

    The best outcome for the power industry, and for the planet globally would be for Tiwai top continue indefinitely. But no private business could give that assurance. Thus taking everything into account I think today's announcement is about the best that could be expected under current circumstances. But how will this affect the share price trajectories of the gentailers?

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    Last edited by Snoopy; 14-01-2021 at 09:04 AM.
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    Quote Originally Posted by Snoopy View Post
    As with all these deals, the devil will be in the detail, which we just don't know yet. Meridian made a pretty generous offer on energy charges (a combined multi-year $250m discount) last year that was rejected. The bit of the bill that Meridian could not control was the line charges. We have to assume that Transpower has come to the party on these. But to what extent? Whether Meridian has had to bite further into their own profit margins further is unknown.

    I disagree with your assessment TJ. I don't think you can gradually wind down a potline. You either operate it or you don't. So I see employment stabilised at today's levels right through until 2024. The four year timetable to closure is useful, because it gives time for Transpower to upgrade their transmission lines to get all that stranded power further north if needed. It also gives time for a hydrogen fuel plant to be built if that indeed is seen as an alternative industry that could take over from Tiwai.

    The best outcome for the power industry, and for the planet globally would be for Tiwai top continue indefinitely. But no private business could give that assurance. Thus taking everything into account I think today's announcement is about the best that could be expected under current circumstances. But how will this affect the share price trajectories of the gentailers?

    SNOOPY
    I actually agree with what everything you've said - but with the power co's at such lofty valuations, combined with chat on here about how Tiwai can't shut because of its green credentials, one would have thought today's announcement (a certain step closer to closure) would have reminded the sector that Tiwai's operation, and fairly large contributions to the NZ economy (and power demand!), is far from a sure thing, and therefore today's announcement would been bad news (but not very bad news)... if any other business was one step closer to losing their biggest customer in a few years time with no clear path on what would be an alternative, it would no doubt send a shiver down that business's spine... hence it is somewhat gobsmacking to see MEL up on the open!

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