Govt sees no SOE advice shortage
The government has dismissed concerns there won’t be enough authorised financial advisers (AFAs) to cater to the high level of interest in the delayed State-Owned Enterprise (SOE) floats, potentially leaving thousands of first-time share investors without advice.
Thursday, September 6th 2012, 6:00AM 1 Comment
by Niko Kloeten
The listing of Mighty River Power, the first sell-down in the government’s mixed ownership model, has been postponed until mid-2013 largely due to last-minute legal wrangling over possible Treaty of Waitangi issues relating to the sale.
However, speaking at the Institute of Finance Professionals (INFINZ) annual conference yesterday, Economic Development Minister Steven Joyce said the delay could actually be beneficial as it would allow time for more interest to build and for investors to get more information about the company.
The extra time would help deal with the “groundswell of interest”, which had been helped by all the “free publicity” given by the mainstream media to the on-going political debate, he said.
“It’s very important we help people make informed decisions when the shares go to market… it will also give us the opportunity to grow the level of interest and publicity in the offer.”
Joyce said much of the interest is from Kiwis who “might be new to the market and new to owning shares.”
A recent poll indicated that about 17% of New Zealanders are keen to buy shares in Mighty River, which would equate to about 680,000 investors, he said.
“Even if we get a third of that it still would make the number of shareholders on a par with Contact Energy.”
Asked whether the 2000-odd AFAs nationwide would be able to cope with the demand and whether large numbers of investors would end up buying shares without getting any advice other than government promotional material, Joyce said the government wasn’t concerned by the issue.
“I suggest we will be able to have sufficient financial advisers,” he said.
Niko Kloeten can be contacted at email@example.com
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