Mighty River debut 'may inspire other firms to list'
Updated at 7:26 am on 13 May 2013
A stockbroker says the example of Mighty River Power's reasonably successful debut on the share market is likely to encourage other companies needing capital to list rather than seeking offshore investors.
Hamilton Hinden Greene director James Smalley says Mighty River Power's first day of trading when its shares rose nearly 5% was largely in line with Contact Energy's float in 1999.
Mr Smalley says the debut bodes well for the Government's other planned floats of state-owned assets and the market.
He says the market is receptive to solid businesses raising capital by listing on the sharemarket.
"That's been one of the problems with, particularly the New Zealand sharemarket in the past, it was not seen as a viable alternative for businesses looking to grow and there's only so much capital you can raise from debt."
Mr Smalley says the problem is that when New Zealand businesses get to a certain size they believe the only way to grow is by selling the business or getting overseas capital.
Hopefully, he says, the Mighty River float will show those businesses they do not necessarily need to look for overseas capital and they can list on the market.
Mr Smalley says they will get a reasonably good reception from local investors, providing the business case stacks up.
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