NZX boom yields little benefit for power firms
Mighty River Power and Meridian Energy share prices hit record lows yesterday, despite the New Zealand stock exchange's best year of trading in a quarter of a century.
The NZX's latest monthly metrics showed a jump in the volume and value of trades last month compared with November last year, as $5.4 billion of shares was traded.
Last Tuesday was also a record trading day for the NZX in both volume and value, as $926.8 million of shares changed hand.
Forsyth Barr broker David Price said 2013 had probably been the best year for equity raising for about 25 years.
But yesterday shares in both Meridian Energy and Mighty River Power plunged to fresh record lows.
Instalment receipts in Meridian Energy, initially sold by the government for $1 in October, dropped 2.5 cents to close at 92.5c yesterday.
Shares in Mighty River Power meanwhile dropped 7c to $1.99.
Ahead of Meridian's float Woodward Partners analyst Nick Lewis said political polls and National's chance of being re-elected next year would have a direct impact on listed power company prices.
Yesterday ACT leader John Banks announced he would quit politics at next year's election, having held the Epsom seat in a National-ACT coalition.
If there was a consistent theme of National being re-elected "then I would expect [power company] prices to start to creep up again," Lewis said.
But if Labour gained in the polls, prices were likely to fall, he said in October.
Meanwhile, NZX monthly metrics showed total trades in the cash market were up 74.5 per cent to 141,143 last month, compared with November last year.
Forsyth Barr's Price said the increase in activity was a combination of more equity raisings or initial public offers (IPOs) and more share placements, or 2POs.
"I'm actually trying to cast my mind back to a time when we actually had more in the way of raisings," he said.
There were 16 capital raisings last month, taking the total for the year to November to 218.
The results showed there had been 1,084,072 trades this year to November, up 31.6 per cent compared with last year.
The total value of this year's trades was $39.5b, up 47.9 per cent.
The daily average value traded was up 85.3 per cent to $256m. The average daily volume traded was up 82.2 per cent to 6721 trades.
Price said trading was probably reaching its peak.
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