Investors hoping to be allocated tens of thousands of dollars worth of shares in Mighty River Power are being told to scale back their expectations, as the first day of pre-registrations shows strong interest in the partial float.
Around 35,000 people pre-registered their interest after a website and call centre were launched on Tuesday, alongside a $1.1 million advertising campaign and three week pre-registration process.
The Government is offering an incentive to New Zealanders who pre-register to encourage as many people as possible to sign up early, and a loyalty bonus for people who hold onto their shares.
The sell-off of up to 49% of Mighty River is expected to raise $1.8 billion and could be the first of three part-privatisations of state-owned energy firms.
Investment advisor Chris Lee says his clients are asking for individual parcels of Mighty River shares worth up to $100,000.
He says the oversubscription will be a boon for other companies planning to list.
NZX managing director Tim Bennett says the partial float should attract up to 200,000 new investors, who are likely to later invest in other shares, bringing much needed growth to the capital markets.
Mr Bennett confirms that a number of new companies are close to announcing listing plans.
A back door listing by The Mad Butcher and technology company Arria are expected to be among the first.
But Mr Bennett says there's no danger the SOE floats will suck up all investors' funds and crowd out smaller offerings.
Mr Lee is warning that new investors who buy just $2000 worth of shares without a broker may have trouble selling them.
Meanwhile, the Government is defending that $2000 threshold - the level to which it guarantees an allocation of shares for New Zealanders applying for a stake in Mighty River Power.
Finance Minister Bill English says the shares need to be spread among retail and institutional investors in New Zealand and offshore to ensure that the Government gets the best price for the asset.
"We're running a process here to try to balance a number of things - on the one hand, widespread ownership for New Zealanders, and on the other hand, fair value for what we're selling."
Mighty River will be listed on the New Zealand stock exchange in mid-May before the Budget announcement, with a secondary listing likely in Australia.
