Yovich & Co. Weekly Update - 18 March 2013
Mar 18, 2013 | Commentary Offers
This Weeks Themes
• The NZX50 gross index continued its push to record highs, closing the week close to the week's high, just shy of 4,400.
• The market was given confidence from the Governor of the Reserve Bank, indicating that any interest rate rise would not happen in 2013.
• The Aussie market ended the week slightly down as poor performances in the Chinese markets weighed on the mining stocks.
• The bull market on the Dow continued as it reached 14,500 later in the week but has since fallen due to the concerns emanating out of Cyprus.
• The Kiwi was mixed, rebounding against the USD yet down against the AUD as a result of the dovish Monetary Policy Statement.
Mighty River Power – Last week to Pre- Register:
Pre-Registration for Mighty River Power shares closes on Friday, the 22nd of March. The main benefit of pre-registering is that you will be eligible for a 25% better allocation than someone that has not pre-registered. The interest in the float has been the largest in the history of the New Zealand Share Market with 377,000 entities pre-registering so far. As a comparison, Contact Energy had 250,000 applicants. The next step for you as investors will be to receive the investment statement and application form, which we expect to happen in late April. At that stage we will be able to form an educated opinion on Mighty River Power. If you have still not pre-registered, please let us know and we can do it on your behalf.
In today's Herald there was an article outlining the expectations of the large brokers for pricing. The prices ranged from $2.36 to $3.06 valuing MRP at between $3.2 billion and $4.12 billion. With these valuations, the net dividend yield would be pleasing if it reaches the higher end the range mentioned, between 3.4% and 5.4%. You can read the article by following the below link.
Infratil Limited (IFT.nz) – Investor Day
The presentations at the Investor Day highlighted a few key reasons why IFT is likely to outperform over the next 12 months. Expectations are that asset values will continue to improve and with IFT's leverage, they will benefit largely from a revaluation of their assets. The recent indication that IFT may spin-off Z Energy also suggests that they are repositioning their portfolio, with the timing being fortunate as similar companies such as Caltex Australia and Ausfuels have been rerated upwards recently. First NZ Capital has an outperform recommendation on IFT with a $2.75 price target, current price is $2.40.
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