Friday, 28 December 2012
New Zealand asset sales
Yet another case of the government ignoring and riding roughshod over advice from its public services and public opinion.
Treasury warning over power company sales
The Treasury has warned the Government the stock market will not be able to cope with the partial sale of three state-owned power companies in one year.
28 December, 2012
The Government had planned to begin selling shares in Mighty River Power this year but put it off until 2013 to allow more time to consult with Maori.
Newly-released advice from the Treasury says it is only practical to sell one company every six months - two next year and one in 2014.
It says that still makes the programme vulnerable to a market downturn or a dip in a company's performance.
Finance Minister Bill English has been considering selling all three power companies next year.
The Labour Party says that is economic idiocy and shows Mr English is pushing ahead with bull-headed politics regardless of the consequences.
Labour's state-owned enterprises spokesperson Clayton Cosgrove says a fire-sale of assets will depress demand and reduce share prices.
The chairman of the Capital Market Development Taskforce says the Treasury is being sensibly cautious in its warning, but it will turn out to have underestimated the market's capacity.
Rob Cameron says the capacity of the market for share floats that are large, of good quality and well priced is typically underestimated.
He expects a very good response to the Mighty River Power partial float, which he said will give Government further confidence that there is the demand to handle all three.
The taskforce was established in 2008 with the aim of improving the country's financial system.
Share to Twitter
Share to Facebook
Share to Pinterest
Post a comment
Post Comments (Atom)