Black Monday

[bull....]

Once S&P 500 break 200 SMA then it will flow faster to lower end of range ...maybe 3800 ...no idea !!!

bounced of m/a's today and agree break back below 200 test lower range bottom again.

See NZ 10yr hit over 4.7 this morning if stay like that be new weekly closing high we might be doing our own 5% test soon

[percy]

The Secret Broker
https://stockhead.cmail20.com/t/d-l-...l-yupddjlly-o/

[Gerald]

bounced of m/a's today and agree break back below 200 test lower range bottom again.

See NZ 10yr hit over 4.7 this morning if stay like that be new weekly closing high we might be doing our own 5% test soon

Would love to hear an explanation by anyone as to why our electricity retailers are trading at the same levels as when then 10 year was 0.5%

Who is buying these things yielding 3% and growing by less then inflation, with regulatory risk when you can make nearly 5% risk free for 10 years? Bonkers

[Rawz]

Would love to hear an explanation by anyone as to why our electricity retailers are trading at the same levels as when then 10 year was 0.5%

Who is buying these things yielding 3% and growing by less than inflation, with regulatory risk when you can make nearly 5% risk free for 10 years? Bonkers

I totally agree, makes no sense.

I posed a similar question on the TRA thread not too long ago.. I said why would one put money in a 5 year term deposit with a bank when you could buy TRA at double the yield and hold for 5 years. If you believed GDP would be higher in 5 years time vs today much better to go TRA. It’s fair to assume that not only would you get double the yield but also some good capital gains.

[mike2020]

I think people don't see interest rates staying high for long, as in the banks see people struggling already and are not passing on full raises much the same as they often don't pass on the full cuts. Not sure how long they can resist the RB but if you think 5% TD is as good as it gets and it can drop quickly you will have learnt retirement on TDs is no longer an option.

[Snoopy]

Would love to hear an explanation by anyone as to why our electricity retailers are trading at the same levels as when then 10 year was 0.5%

Who is buying these things yielding 3% and growing by less then inflation, with regulatory risk when you can make nearly 5% risk free for 10 years? Bonkers

I agree it doesn't make sense buying a low yielding retailer. But buying a low yielding gentailer is an entirely different proposition. Not sure where you get your 3% yield figure from. Checking on the NZX website today I see gross dividend yields of 4.287% (Mercury), 4.225% (Meridian), 6.146% (Contact) and 7.071% (Genesis).

With wind and hydro energy, the energy input cost is zero. So any incremental power you generate goes straight to the bottom line. That also means that costs are not rising as fast as inflation. So income rising at less than inflation does not mean that profits are rising at less than inflation.

Looking out a bit further we are in the process of transitioning our transport fleet to electric power, either directly via EVs or with hydrogen power. And green hydrogen takes a lot of electricity to produce. New power stations can be constructed without calling on shareholders for more funds. Both Meridian and Mercury, at least, can leverage the ever increasing value of their historical assets to build new power stations using the ever increasing value of their historical asset base as funding collateral.

Personally I think we are on the bottom rung of a stepladder jump in electricity demand. By that measure the price of the gentailers today does not look particularly expensive. However I do concur with your assessment that the government going ahead with Onslow would be a regulatory risk. As an investor you have to make your own assessment of how significant that regulatory risk is.

SNOOPY

[bull....]

Would love to hear an explanation by anyone as to why our electricity retailers are trading at the same levels as when then 10 year was 0.5%

Who is buying these things yielding 3% and growing by less then inflation, with regulatory risk when you can make nearly 5% risk free for 10 years? Bonkers

add imputation credit's on and you get roughly

GNE - 8.44%
CEN - 6.37%

so these two make sense as there yield's are still very attractive and they are stable businesses

MCY - 4.28%
MEL - 4.5%


marginal on pure yield basis but still stable businesses

also bond is fixed for the time period while a stock can keep growing it div and most gentailers are still growing div's even if they are small increases each yr.
Also fund's when allocating a % of there portfolio to defensive stocks may invest in these stocks to meet the allocation , the yield may become secondary in there reasoning as the stability of the stock price may be more important

the higher bond prices or rates in general will probably have a bigger impact on companies stock prices that have to raise debt or service large debt with less stable earnings profiles

traditionally these types of stocks are not owed if your looking for capiital gains but more for stability and some income and even why you say the prices are similar to so long ago if you compound the div and small cap gains each yr it add's up to very nice compounded returns

[SailorRob]

I agree it doesn't make sense buying a low yielding retailer. But buying a low yielding gentailer is an entirely different proposition. Not sure where you get your 3% yield figure from. Checking on the NZX website today I see gross dividend yields of 4.287% (Mercury), 4.225% (Meridian), 6.146% (Contact) and 7.071% (Genesis).

With wind and hydro energy, the energy input cost is zero. So any incremental power you generate goes straight to the bottom line. That also means that costs are not rising as fast as inflation. So income rising at less than inflation does not mean that profits are rising at less than inflation.

Looking out a bit further we are in the process of transitioning our transport fleet to electric power, either directly via EVs or with hydrogen power. And green hydrogen takes a lot of electricity to produce. New power stations can be constructed without calling on shareholders for more funds. Both Meridian and Mercury, at least, can leverage the ever increasing value of their historical assets to build new power stations using the ever increasing value of their historical asset base as funding collateral.

Personally I think we are on the bottom rung of a stepladder jump in electricity demand. By that measure the price of the gentailers today does not look particularly expensive. However I do concur with your assessment that the government going ahead with Onslow would be a regulatory risk. As an investor you have to make your own assessment of how significant that regulatory risk is.

SNOOPY

Liquid hydrogen has the density of polystyrene. Where you gonna store it bro.

Also... Gross dividend yields mean nothing.

[Snoopy]

Liquid hydrogen has the density of polystyrene. Where you gonna store it bro.

I never mentioned 'liquid hydrogen'. Fuel cell vehicle technology exists. The problem with running heavy trucks on batteries is that the weight of the battery required, severely compromises the payload that can be carried. Fuel cell technology is one way around this. The technology has been proven to work technically and heavy vehicle trials are due to commence in New Zealand. Exactly how hydrogen is used is immaterial to the fact that if this technology is to reduce emissions, then green hydrogen must be used. And the only companies in NZ that can supply the green energy to produce green hydrogen are the gentailers.

Also... Gross dividend yields mean nothing.

Obviously I don't agree. What point are you trying to make?

SNOOPY

[SailorRob]

I never mentioned 'liquid hydrogen'. Fuel cell vehicle technology exists. The problem with running heavy trucks on batteries is that the weight of the battery required, severely compromises the payload that can be carried. Fuel cell technology is one way around this. The technology has been proven to work technically and heavy vehicle trials are due to commence in New Zealand. Exactly how hydrogen is used is immaterial to the fact that if this technology is to reduce emissions, then green hydrogen must be used. And the only companies in NZ that can supply the green energy to produce green hydrogen are the gentailers.



Obviously I don't agree. What point are you trying to make?

SNOOPY

Oh my god Snoop, have you any idea what you're saying?!

Ok, so you're going to use GAS phase hydrogen???? So for 1kg of fuel, your going to carry an 11 square meter balloon with you? Is this the Hindenburg?

So how it is used is immaterial? You have a way of changing physics?

I think bro it needs to be Liquid or gas I suggest you do some research on the respective volumes of each that 1kg of mass occupies.

'I never mentioned liquid hydrogen' Share trader quote of the year so far! You imply by this that you honestly think gas hydrogen is feasible thus showing a massive display of ignorance on the topic.

Please tell us how much total energy is available from gas phase hydrogen per meter squared?