MEL - Meridian Energy

[RTM]

Trustpower are screwed because the RCPD incentives are gone. RCPD stands for Regional Coincidental Peak Demand. This is the method Transpower uses for calculating the distribution networks annual connection charges. The distribution companies usually rebate the companies which own the smaller stations which generate directly into the distribution networks. This is quite lucrative for the companies that own these smaller stations as they can time their generation to reduce the distribution networks peak demand and hence reduce their bill to Transpower.

Meridian have no generators connected to distribution networks (usually referred to as an embedded generator), all of their stations are connected to the transmission grid hence no benefits lost by the dissolution of RCPD. Trustpower is the opposite, most of their generation is embedded. Hence, they will loose a revenue stream.

In addition, Meridian get a massive benefit from the changes in HVDC cost allocation. Currently this is 100% paid for by the owners of South Island power stations. The majority (i'm guessing ~90%) of Meridians generation comes from the SI and hence any changes in this give them a major benefit too. Contact is roughly neutral, Genesis looses a wee bit, Mercury loose a lot (currently they have no SI assets).

Hopefully the above makes sense. The document is incredibly complex (156 pages) and haven't had time to digest it in full yet.

Many thanks for the explanation K14. I think I own all the power companies....so I guess what one loses (TPW) another will gain !
Hope I've got the proportions right, although I suspect not from your description.

Appreciated.

[Joshuatree]

Thanks k14. Im assuming your interpretation is correct thats gold ,if so may be time to short Trustpower down just 7c today.

[Jantar]

Trustpower are screwed because the RCPD incentives are gone...….

In addition, Meridian get a massive benefit from the changes in HVDC cost allocation. Currently this is 100% paid for by the owners of South Island power stations. The majority (i'm guessing ~90%) of Meridians generation comes from the SI and hence any changes in this give them a major benefit too. Contact is roughly neutral, Genesis looses a wee bit, Mercury loose a lot (currently they have no SI assets)…… Thanks K14. Yes you are correct in the relative gains and losses. I suspect Contact will lose fractionally more than they will gain due to the change in HVDC methodology, as their generation is weighted more to the NI. Meridian will be the biggest winner out of the Gentailers for sure. I will also need to read that section in more detail.

[bull....]

Trustpower are screwed because the RCPD incentives are gone. RCPD stands for Regional Coincidental Peak Demand. This is the method Transpower uses for calculating the distribution networks annual connection charges. The distribution companies usually rebate the companies which own the smaller stations which generate directly into the distribution networks. This is quite lucrative for the companies that own these smaller stations as they can time their generation to reduce the distribution networks peak demand and hence reduce their bill to Transpower.

Meridian have no generators connected to distribution networks (usually referred to as an embedded generator), all of their stations are connected to the transmission grid hence no benefits lost by the dissolution of RCPD. Trustpower is the opposite, most of their generation is embedded. Hence, they will loose a revenue stream.

In addition, Meridian get a massive benefit from the changes in HVDC cost allocation. Currently this is 100% paid for by the owners of South Island power stations. The majority (i'm guessing ~90%) of Meridians generation comes from the SI and hence any changes in this give them a major benefit too. Contact is roughly neutral, Genesis looses a wee bit, Mercury loose a lot (currently they have no SI assets).

Hopefully the above makes sense. The document is incredibly complex (156 pages) and haven't had time to digest it in full yet.

cheers good sumary

[Snoopy]

Trustpower are screwed because the RCPD incentives are gone. RCPD stands for Regional Coincidental Peak Demand. This is the method Transpower uses for calculating the distribution networks annual connection charges. The distribution companies usually rebate the companies which own the smaller stations which generate directly into the distribution networks. This is quite lucrative for the companies that own these smaller stations as they can time their generation to reduce the distribution networks peak demand and hence reduce their bill to Transpower.

Meridian have no generators connected to distribution networks (usually referred to as an embedded generator), all of their stations are connected to the transmission grid hence no benefits lost by the dissolution of RCPD. Trustpower is the opposite, most of their generation is embedded. Hence, they will loose a revenue stream.


k14, I am having some difficulty with my understanding of your post. It makes sense for the distributor Transpower to price network charges on 'Regional Coincidental Peak Demand', because that is the time when the network is under most stress. The network needs to be built to be able to handle that maximum level of power buzzing through the transformers and the wires. A smaller power station generating locally presumably means that such generation can be substitute for power being supplied by the mega stations far away. So it means less power need be sent up the main trunk route, and especially less across the HVDC south to north cable. But that extra power is still required locally and so the load on the local network is still the same. So why would Transpower rebate anything? But even if a small generator can make a difference to the power going north (say). Then a big generator could make an even bigger difference. So why wouldn't Genesis, as an example in this case, just crank up Huntly a bit and take all the profit available from lessening the load on the HVDC cable, and leave no excess profit hole for the small local power station to fill?

Finally Trustpower isn't a lines company. If Transpower were going to give a rebate, wouldn't they give it to the local lines company?

SNOOPY

[k14]

k14, I am having some difficulty with your post. It makes sense for the distributor Transpower to price network charges on 'Regional Coincidental Peak Demand', because that is the time when the network is under most stress. The network needs to be built to be able to handle that level of power buzzing through the wires. A smaller power station generating locally presumably means that such generation can be substitute for power being supplied by the mega stations far away. So it means less power need be sent up the main trunk route, and especially less across the HVDC south to north cable. But that extra power is still required locally and so the load on the local network is still the same. So why would Transpower rebate anything? And Trustpower isn't a lines company. If Transpower were going to give a rebate, wouldn't they give it to the local lines company?

SNOOPY
Apologies if I was confusing, its a tricky one to explain. I'll have another crack....

Transpower charges distribution companies (Powerco, Vector, Aurora etc) a set fee for having their distribution network connected to the transmission network. There are a lot of small power stations in NZ (say 40MW or smaller) that are connected directly to the distribution network. Hence, when one of these stations is generating directly into the local distribution grid, the amount of power being drawn off the transmission grid is reduced by the amount that station is generating.

RCPD is the current method that Transpower use to set the MW portion of the yearly fee each distribution company pays for every connection point they have connected to the Transpower grid. Depending on the distribution company and if you own a station that generates into the grid (referred to as an embedded generator) then you can usually negotiate with the distribution company a rate that you will be reimbursed by the distribution company (not Transpower) because if you generate during one of the periods where the RCPD calculation is triggered then that generation is directly reducing the distributions connection charge.

So Trustpower own quite a number of embedded generators. They have been for many years receiving these payments from the distribution companies that their stations feed into. Now this revenue stream will cease to exist. Some of the other companies do to, although I doubt they are as effected as Trustpower. Pioneer will be effected to some extent to I would guess.

Does that make sense? Let me know if any further explanation is required.

[Jantar]

k14, I am having some difficulty with my understanding of your post. It makes sense for the distributor Transpower to price network charges on 'Regional Coincidental Peak Demand', because that is the time when the network is under most stress. The network needs to be built to be able to handle that maximum level of power buzzing through the transformers and the wires. A smaller power station generating locally presumably means that such generation can be substitute for power being supplied by the mega stations far away. So it means less power need be sent up the main trunk route, and especially less across the HVDC south to north cable. But that extra power is still required locally and so the load on the local network is still the same. ........

SNOOPY
To add to what K14 wrote, the RPCD is a regional calculation, not a newtwork specific one. So while a small generator embedded in a network may reduce the regional peak, it usually does not reduce the load on the majority of the transformers and switchgear. This results in perverse outcomes for those networks in a region that do not have embedded generation.

[horus1]

The peak charges should NOT be taken out of the charging mechanism This change to TPM is nonsense and designed to preserve the existing generators and stop solar and new technologies. Anybody young should be going off grid if they can. I understand Transmission Pricing.

[fish]

The peak charges should NOT be taken out of the charging mechanism This change to TPM is nonsense and designed to preserve the existing generators and stop solar and new technologies. Anybody young should be going off grid if they can. I understand Transmission Pricing.

Will this have any effect on Home Solar?

[Snoopy]

Transpower charges distribution companies (Powerco, Vector, Aurora etc) a set fee for having their distribution network connected to the transmission network. There are a lot of small power stations in NZ (say 40MW or smaller) that are connected directly to the distribution network. Hence, when one of these stations is generating directly into the local distribution grid, the amount of power being drawn off the transmission grid is reduced by the amount that station is generating.

RCPD is the current method that Transpower use to set the MW portion of the yearly fee each distribution company pays for every connection point they have connected to the Transpower grid. Depending on the distribution company and if you own a station that generates into the grid (referred to as an embedded generator) then you can usually negotiate with the distribution company a rate that you will be reimbursed by the distribution company (not Transpower) because if you generate during one of the periods where the RCPD calculation is triggered then that generation is directly reducing the distributions connection charge.

So Trustpower own quite a number of embedded generators. They have been for many years receiving these payments from the distribution companies that their stations feed into. Now this revenue stream will cease to exist. Some of the other companies do to, although I doubt they are as effected as Trustpower. Pioneer will be effected to some extent to I would guess.

Does that make sense? Let me know if any further explanation is required.


Thanks for the clarification k14. If a small embedded power station is in your local electricity network, then it makes perfect sense to pay someone to operate it. The payoff for Transpower is to reduce the amount of power that must be channelled into the local network from elsewhere. IOW the local network will put less stress on the wider Transpower network, so it makes sense that Transpower would make a payment to the small embedded generator to reduce peak loads on the wider Transpower network.

What does not make sense to me is why anyone would seek to change this current arrangement!



To add to what K14 wrote, the RPCD is a regional calculation, not a newtwork specific one. So while a small generator embedded in a network may reduce the regional peak, it usually does not reduce the load on the majority of the transformers and switchgear. This results in perverse outcomes for those networks in a region that do not have embedded generation.


So there is a regional arrangement for reimbursing grouped local networks. But if one of those local networks has an embedded power station then that means the owner of that power station is reimbursed. How is that perverse for the other networks in the wider region? Don't all local networks that are part of the regional network benefit, whether they have an embedded power station or not?
It would only be 'unfair' if the local lines company operator owned the small power station (which I think sometimes is the case?)



The peak charges should NOT be taken out of the charging mechanism This change to TPM is nonsense and designed to preserve the existing generators and stop solar and new technologies. Anybody young should be going off grid if they can. I understand Transmission Pricing.


I think horus is right!

SNOOPY

[Snoopy]

The peak charges should NOT be taken out of the charging mechanism This change to TPM is nonsense and designed to preserve the existing generators and stop solar and new technologies. Anybody young should be going off grid if they can. I understand Transmission Pricing.



Will this have any effect on Home Solar?


Unless your home solar generates at peak energy consumption time (unlikely), then you are going to face a higher line's charge in the future. Because the lines company will be losing revenue from your 'solar substitution' but the solar substitution will not be reducing their peak load. So the lines company will have to put up their fixed charges to you, so that they can maintain your local network for 'peak duty'.

SNOOPY

[horus1]

The real answer is that more and more will disconnect from the networks . It is happening overseas . Lines cos should be writing down assets as the networks are becoming normal business's not monopolies.

[Jantar]

…….

So there is a regional arrangement for reimbursing grouped local networks. But if one of those local networks has an embedded power station then that means the owner of that power station is reimbursed. How is that perverse for the other networks in the wider region? Don't all local networks that are part of the regional network benefit, whether they have an embedded power station or not?....

SNOOPY
The issue is that the peak demands cannot be accurately known in advance, but can be estimated, both in timing and quantity, from the SO and the Tesla forecasts. However if one node has a sufficient embedded generation quantity, that can reduce the peak at the expected time, then some other period will be a new peak, and will be at a time that may not be forecastable. Thus other networks may not be able to operated their load controls to coincide with when the new peaks occur, and end up being financially disadvantaged. This often the case in the Southern region where Trustpower has over 80 MW of generation available at Waipori and Deep Stream which feeds into a single node at HWB1101.

[k14]

Interesting decision just released by the EA. Their preliminary decision into the behaviour of Meridian and Contact in Nov/Dec 2019 has found that Meridian did breach the electricity governance rules. Contact did not.

This will have some serious implications if the decision is upheld and potentially result in a fine for Meridian. Will be an interesting opening on the NZX for both companies this morning.

[k14]

Here is the article https://www.stuff.co.nz/business/121980237/meridian-involved-in-undesirable-trading-situation-says-electricity-authority-in-preliminary-decision

Watch this space...

[RTM]

Here is the article https://www.stuff.co.nz/business/121980237/meridian-involved-in-undesirable-trading-situation-says-electricity-authority-in-preliminary-decision

Watch this space...

Thanks K14,
Maybe its time for Winston to buy back the power companies so they operate in the best interest of New Zealand Inc.:D

[Aaron]

I know there was concern re the closure of Tiwai Point but what about NZR. It is apparently one of the top 5 users of electricity. Possibly this has been discussed on another thread. Also NZR closing is not imminent I don't think.

[Joshuatree]

Top 5 user! , wow!. thats very interesting thanks. I wont be hunting for verification.

[Sideshow Bob]

This will have some serious implications if the decision is upheld and potentially result in a fine for Meridian. Will be an interesting opening on the NZX for both companies this morning.

Currently up 1%.....;)

[k14]

Currently up 1%.....;)
Yeah go figure, 109 pages of report too big for the market to digest. There will be long term consequences for this but very hard to predict the magnitude.

[Aaron]

Top 5 user! , wow!. thats very interesting thanks. I wont be hunting for verification.

I am guessing that maybe only Tiwai Point is significant, or are you just being a d**khead?

[Jantar]

Here is the article https://www.stuff.co.nz/business/121980237/meridian-involved-in-undesirable-trading-situation-says-electricity-authority-in-preliminary-decision

Watch this space...
Here is the full decision: file:///C:/Users/Admin/Downloads/Preliminary-decision-paper-10-November-2019-UTS-claim.pdf

Contact did not come out of it completely untouched as it is stated that Contact did offer in such a way that overnight generation was impacted. However it wasn't as bad or as blatant as Meridian and hence Contact were not guilty of a UTS.

There is a separate investigation into whether or not the High Standards of Trading Conduct provisions were breached. This is a less serious charge, but still it is one that no company wants to have decided against them.

[Joshuatree]

I am guessing that maybe only Tiwai Point is significant, or are you just being a d**khead?

On 2nd thoughts maybe you'd better verify that Aaron before you fly off the handle. A link? "Apparently" doesnt confirm anything,Thanks.

[Aaron]

On 2nd thoughts maybe you'd better verify that Aaron before you fly off the handle. A link? "Apparently" doesnt confirm anything,Thanks.

Your response seemed unhelpful. I remember seeing it mentioned in an article about NZR which I can't now find and wondered whether this takes on the significance that Tiwai Point does. Asking on here to see if this might be an issue for the power companies as I don't know. I guess it doesn't.

FYI links that I could find.
https://www.mbie.govt.nz/dmsdocument/4906-refining-nz-submission-electricity-price-review-options-paper-pdf
Its states NZR consumes 31% of northlands power (although this might not be much as nthld is pretty small)

It is a member of MEUG although this idoes not say where they rate regarding consumption or how much for that matter.
http://www.meug.co.nz/members-list

[Aaron]

Yeah go figure, 109 pages of report too big for the market to digest. There will be long term consequences for this but very hard to predict the magnitude.

The Electricity Authority has found that generator Meridian Energy manipulated the power market, costing consumers about $80 million.

$80 million would be about the right size for a penalty I would imagine.

[Jantar]

The Electricity Authority has found that generator Meridian Energy manipulated the power market, costing consumers about $80 million.

$80 million would be about the right size for a penalty I would imagine. I suspect the fina figure will be less than that. The EA determined that an extra 55MW on average would have dispatched at a price of $6.75. However there is no way any the main generators in the South Island would allow the price to drop that low.

Over that period South Island generators paid Transpower approximately $6.40 per MW for the HVDC. Add to that the approximately $2.20 per MW opex cost and the minimum return per MW just to break even is $8.60. Therefore it would be foolish for South Island generators to allow sustained prices lower than this.

[King1212]

Classic pumped n dumped by big boys...they certainly knew the news will be out... Smelter will be closed

[ananda77]

Classic pumped n dumped by big boys...they certainly knew the news will be out... Smelter will be closed

YES, after weeks of after market trades in CEN which compressed the price lower, then this rally?? Sold my last CEN at 6.82. What appears to be too good to be true....etc. Mind you, there is always 'Who Knows"

[Waltzing]

MCY actually went up? do they benefit

[horus1]

Yes they do

[RTM]

LCompared to July 2019, Meridian saw increased sales in all segments: residential (+12.7%), small medium business (+16.9%) agricultural (+11.2%), large business (+20.8%) and corporate (+13.4%)”

https://www.nzx.com/announcements/358409

As long as it rains at the right time and place...should be ok.

[Beagle]

LCompared to July 2019, Meridian saw increased sales in all segments: residential (+12.7%), small medium business (+16.9%) agricultural (+11.2%), large business (+20.8%) and corporate (+13.4%)”

https://www.nzx.com/announcements/358409

As long as it rains at the right time and place...should be ok.


In the month to 13 August 2020, national hydro storage decreased from 75% to 70% of historical average
- South Island storage sat at 73% of average and North Island storage at 57% of average on 13 August 2020.

Level's are very low. No progress on Tiwai Pt and nowhere to transmit the power too for a while after it closes. I find it very hard to get enthused.

[peat]

I'd rather be MEL than AIA though which admittedly is an odd comparison with such different causes of their current woes. But MEL has a pretty clear way ahead to utilise the excess power in time, and that time will not be as long as we originally thought. Its not exactly an unknown unknown given it was always being threatened.

AIA is likely to come back to normal eventually , maybe , but who the hell knows. Its assets wont be worth that much if international travel is constrained too much for long.

[Beagle]

Strange comparison peat :confused: Isn't it more useful to compare this with other gentailiers ?

For what its worth which probably isn't much as I don't follow this sector super closely I can see MEL and CEN struggling a bit after the Tiwai shutdown...not sure which is relatively better positioned between MRP and GNE but I like GNE's yield a LOT more than MRP, (roughly double the yield). I doubt that CEN's attractive yield is sustainable post Tiwai but maybe it is, who knows.

P.S. I agree mate, I wouldn't touch AIA with a bargepole.

[ecuttel]

I'm not so sure the shutting of Tiwai will have a huge effect on MEL. Tiwai to close in a year, in which hopefully the upgrade of the transmission line from Southland to Benmore is complete. Benmore is DC conversion point to supply the North Island... this combined with any Energy hungry industry the Govt can attract to aid the Southland economy could soak up some of excess power from the Tiwai closure.

Fingers crossed as I hold MEL shares :)

[trader_jackson]

https://www.stuff.co.nz/business/122562329/meridian-reports-profit-drop-and-challenges-on-the-horizon

Not that great really...
No wonder the silence on here is deafening

[bull....]

as craigs investments and bull have mentioned mcy is better

[tango]

as craigs investments and bull have mentioned mcy is better

Craigs were very late to the party with that conclusion. Their analysts fell in love with MEL and kept pushing it despite the looming Tiwai exit. I think MEL has appeared in each of the last two years Herald stock picks from Craigs

[bull....]

market seems to like there result , i got in on the conference call they seemed pretty upbeat about the future

[dreamcatcher]

Happy holder MEL & CEN

[bull....]

Meridian suggests fresh government talks on smelter underway as it contemplates $1.3b write-down

https://www.stuff.co.nz/business/122562329/meridian-suggests-fresh-government-talks-on-smelter-underway-as-it-contemplates-13b-writedown

they mentioned this on the call

[tango]

Meridian suggests fresh government talks on smelter underway as it contemplates $1.3b write-down

https://www.stuff.co.nz/business/122562329/meridian-suggests-fresh-government-talks-on-smelter-underway-as-it-contemplates-13b-writedown

they mentioned this on the call

The press release simply said that they had made an offer but had no idea whether it would progress. Did they offer something more on the call?

I’ve hedged my bets. I own shares in all of the power co except TPW. Let’s face it… Electricity is the way of the future and unless the greens get total control of Parliament we are not going to be using pedal power and we aren’t all going to convert our houses to solar.

[bull....]

The press release simply said that they had made an offer but had no idea whether it would progress. Did they offer something more on the call?

I’ve hedged my bets. I own shares in all of the power co except TPW. Let’s face it… Electricity is the way of the future and unless the greens get total control of Parliament we are not going to be using pedal power and we aren’t all going to convert our houses to solar.

they said contact had chipped some coin in too

[tango]

they said contact had chipped some coin in too

I heard an excerpt and what I heard is that
1. CEN, transpower and MEL are discussing options to utilise the surplus power
2. MEL have made another offer but so far NZAS are not receptive and MEL expect the closure to go ahead in a year.
3. The government is having discussions with NZAS that MEL are not privy to.
4. There are promising confidential discussions with new businesses in the South Island that may be able to take up the surplus power.

The last is the most exciting in my opinion

[bull....]

I heard an excerpt and what I heard is that
1. CEN, transpower and MEL are discussing options to utilise the surplus power
2. MEL have made another offer but so far NZAS are not receptive and MEL expect the closure to go ahead in a year.
3. The government is having discussions with NZAS that MEL are not privy to.
4. There are promising confidential discussions with new businesses in the South Island that may be able to take up the surplus power.

The last is the most exciting in my opinion

cen was mentioned in answer to an analyst question in the question and answer time. your point 4 was also asked in the Q&A and was said this is in years not mths. your point 2 mel says they have not heard back not that they are not receptive

[tango]

cen was mentioned in answer to an analyst question in the question and answer time. your point 4 was also asked in the Q&A and was said this is in years not mths. your point 2 mel says they have not heard back not that they are not receptive

Thanks for the update!

[artemis]

Bitcoin mining?

[bull....]

Labour promises to keep Tiwai Point on life support – but there's a catch
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12368492

last day to get the div as well

[NZSilver]

What's the sustainable div if tiwai stays open?

[NZSilver]

Labour promises to keep Tiwai Point on life support – but there's a catch
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12368492

last day to get the div as well

What's the sustainable div if tiwai stays open

[bull....]

What's the sustainable div if tiwai stays open

they mentioned in there last report about not paying specials anymore so i presume it be less that until tewai closes then it change again. so if they do a deal 3 -5 yrs should be close to what it is now im thinking

[NZSilver]

Can someone please explain why the price jumps at the end of the trading day

[gains]

Can someone please explain why the price jumps at the end of the trading day

Well it happened today because a trade of 1.2M securities went through on close. See:
https://www.directbroking.co.nz/directtrade/dynamic/quote.aspx?qqeg=NZ&qqsc=mel&QuickQuote=Go

[bull....]

month end book squaring , was good for me cause i was able to lighten my big load after buying for the div

[NZSilver]

Thankyou. I see it.moveing back to $5.10-5.20 range on the back of tiwai and lower IRs

[bull....]

Thankyou. I see it.moveing back to $5.10-5.20 range on the back of tiwai and lower IRs

hopefully all gentailers should have some support now based on the govt announcement of negiotiations with rio , results of that sometime after election. cross fingers for good news probably be another spike higher , no deal would be bad

[NZSilver]

hopefully all gentailers should have some support now based on the govt announcement of negiotiations with rio , results of that sometime after election. cross fingers for good news probably be another spike higher , no deal would be bad

Now all parties want a deal, chances are it will happen.

[artemis]

Couple of observations from the ASM today. The chairman's address was a pinnacle of virtue signalling and little else. We had the reo, bicultural, better recognition of the values of the tangata whenua, covid, climate change and transition away from fossil fuels. (Nothing to do with electricity supply and profits then.) Riding instructions from their government owner?

On that last point, Australia was said to be in the slow lane. They'll be worried about that for sure.

What keeps the Chair up at night - health and safety. A safe answer, better than Rio Tinto.

One funny thing, the speech to text translator of 'software as a service' was 'south war-as-a-service'.

[IAK]

Meridian at an ath of $5.90. What's going on? Tiwai confirmed? Divie hunters?

Disc. Largest holding but OCA in hot pursui lol.

[bull....]

Meridian at an ath of $5.90. What's going on? Tiwai confirmed? Divie hunters?

Disc. Largest holding but OCA in hot pursui lol.

huge rise alright , up a dollar since div. wish i hadnt lightened my over sized load after div

[sb9]

Meridian at an ath of $5.90. What's going on? Tiwai confirmed? Divie hunters?

Disc. Largest holding but OCA in hot pursui lol.

In the meantime another juicy divvy just landed in the bank a/c.

[bull....]

In the meantime another juicy divvy just landed in the bank a/c.

yes now what to spend it on

[kyanar]

yes now what to spend it on
If you believe the conspiracy theorists on this forum, you can't lose dumping it all into SKT which will be bought out this week at massive price premium?

[IAK]

Meridian ATH - $5.89 eh? Tiwai going ahead?

disc. holding

[bull....]

Meridian ATH - $5.89 eh? Tiwai going ahead?

disc. holding

rbnz meeting tomorrow looks like moving all the gentailers this week in advance

[IAK]

Thanks Bull.

[sb9]

$6.20 close today, hmmm..who would've thought...

[bull....]

for sure mel is the best performer in the bunch

[RTM]

$6.20 close today, hmmm..who would've thought...

Just a variation on the housing market.......

[bull....]

new highs again today.

ytd performance of gentailers shows in order of best to worst

mel 24%
tlt 22%
mcy 17%
cen 14%
vct 13%

the not so good

gne 4%
tpw 1%

[macduffy]

Deleted - apologies.

[sb9]

Powering ahead again today, currently $6.45...

[dreamcatcher]

Explains higher SP ............aluminum prices strong

[bull....]

mel powering ahead towards $7 , up 34% YTD the best performer of the gentailers

[maccadac]

Why is this thread so quiet? Has performed so well over the years!

[bull....]

Why is this thread so quiet? Has performed so well over the years!

there all in genesis lol which has returned a measliy 11% ytd anyway i see we just went over $7 pop the champange

[IAK]

Getting seriously over weight with this one. :t_up:

[dreamcatcher]

there all in genesis lol which has returned a measliy 11% ytd anyway i see we just went over $7 pop the champange

Holders have me to thank there bull as sold a few last week and always the same SELL goes up BUY goes down........ :mellow:

Well done holders :) something clearly happening...

[Traderx]

Incredibly overvalued, offshore passive fund buying? Ripe for hefty correction down the track

[Norwest]

Incredibly overvalued, offshore passive fund buying? Ripe for hefty correction down the track

Potentially the most overvalued stock on the NZX50.

[JSwan]

Incredibly overvalued, offshore passive fund buying? Ripe for hefty correction down the track

When Rio starts playing the Tiwai Smelter card again

[Swala]

Yes. Sold out of this completely yesterday, great gains over six months but can't see it going much higher and divi not that special now. Would probably buy back in if it drops 15 - 20%.

[JohnnyTheHorse]

I built a short position around $7.05 yesterday. I think this is overcooked and am expecting some daily consolidation back towards at least $6.50ish.

[Louloubell]

I sold half my holdings yesterday in anticipation of a correction. Will be interesting to see how low we go

[bull....]

Hydrogen plant for Southland in the future?

Meridian and Contact will spend $2 million on a feasibility study to investigate the potential of a large scale renewable hydrogen production plant in Southland

https://www.stuff.co.nz/business/123673990/hydrogen-plant-for-southland-in-the-future

if built will speed up the closure of the high emission peak stations

[Traderx]

I built a short position around $7.05 yesterday. I think this is overcooked and am expecting some daily consolidation back towards at least $6.50ish.

Hi - which platform/broker can you short MEL on? Thanks

[bull....]

Day of reckoning for Meridian on Tuesday as Electricity Authority readies ruling

https://www.stuff.co.nz/business/123756663/day-of-reckoning-for-meridian-on-tuesday-as-electricity-authority-readies-ruling

[JSwan]

Day of reckoning for Meridian on Tuesday as Electricity Authority readies ruling

https://www.stuff.co.nz/business/123756663/day-of-reckoning-for-meridian-on-tuesday-as-electricity-authority-readies-ruling


market currently pricing in that the EA are going to give them money instead of charging them ;)

[macduffy]

The Electricity Authority's ruling certainly hasn't hurt Meridian's SP today!

https://www.stuff.co.nz/business/300190244/lack-of-competition-pushed-up-prices-when-meridian-spilled-water-electricity-authority-says

[Jantar]

The Electricity Authority's ruling certainly hasn't hurt Meridian's SP today!

https://www.stuff.co.nz/business/300190244/lack-of-competition-pushed-up-prices-when-meridian-spilled-water-electricity-authority-says
Although the EA found that MEL had caused a UTS, MEL had not actually breached any of the code (rules). It is probable that Meridian will get a very small penalty, as a hefty penalty would certainly be appealed.

The EA will look probably look at a rule change. to ensure that unnecessary spill does not occur. But any wording of such a rule change will need to be a step back from saying that energy must be offered at an uneconomic price.

[bull....]

new highs again , people want yield at any cost eh

[Stranger_Danger]

new highs again , people want yield at any cost eh

Then they should look at their capital base, decide on a magic number (say 5%), call it Yield, put a party hat on it if you have one, and then either spend it, save it, voluntarily pay tax on it, sleep with it, boast about it ...whatever one was planning to do this mythical "yield" item if they hadn't taken my suggestion and made it up in their head.

Instead of just making it up in their heads, some of this yield chasing is going to be very, very expensive at some stage.

[bull....]

not often you get a please explain why your stock is going up so fast notice when it comes to a major company

[Jantar]

I expect to see a similar notice and identical response from CEN as well.

[bull....]

I expect to see a similar notice and identical response from CEN as well.

id be surprised mel has way out performed all other gentailers the last week / mth and year. as you are a industry expert jantar hope you have plenty of power stocks

[Jantar]

id be surprised mel has way out performed all other gentailers the last week / mth and year. as you are a industry expert jantar hope you have plenty of power stocks
Just over 33% of my portfolio is in Electricity companies.

The enquiry was about $1.32 increase over 3 1/2 trading days. CEN went up $1.04 over the same period. GNE only went up $0.23, so it wasn't an industry wide increase.

Percentage wise, MEL led the charge with over 20%, CEN were 14%, MCY 12% and GNE 7%.

[dreamcatcher]

Believe this is what its all about .........not yield

Meridian and Contact Energy are both in the S&P Global Clean Energy Index to which many clean energy funds are benchmarked

[Swala]

Believe this is what its all about .........not yield

Meridian and Contact Energy are both in the S&P Global Clean Energy Index to which many clean energy funds are benchmarked
Do the wiser, more experienced contributors here think that should keep the share prices at these elevated levels going forward?

[dreamcatcher]

Do the wiser, more experienced contributors here think that should keep the share prices at these elevated levels going forward?

Not sure if I would class myself as any wiser or experienced contributor but both MEL & CEN are a good slice in my portfolio. Contact has traded in the $9+ previously but $8 is new ground for MEL pushed by clean energy funds finding both attractive. Expect both to re-rate and remain at higher levels the same as a handful of other excellent NZ stocks.

[RTM]

Thanks Dreamcatcher, good perspective.


Believe this is what its all about .........not yield

Meridian and Contact Energy are both in the S&P Global Clean Energy Index to which many clean energy funds are benchmarked


Not sure if I would class myself as any wiser or experienced contributor but both MEL & CEN are a good slice in my portfolio. Contact has traded in the $9+ previously but $8 is new ground for MEL pushed by clean energy funds finding both attractive. Expect both to re-rate and remain at higher levels the same as a handful of other excellent NZ stocks.

[bull....]

8.59 close well those funds want in at any price

[LegendOfRiot]

Anyone else buying in at these levels?

[Stranger_Danger]

Anyone else buying in at these levels?

No, I'm easing mine out. You'd have to be on crack to buy at these levels.

[HITMAN]

Not sure I did the right thing, sold mine today, up over 400%. The buy orders have stacked up after closing. It may keep climbing. I'm happy though, let's see what else to invest in.

[Joshuatree]

Interested in what your strategy is here. Reached your target price? Have another stock lined up yet to run? This is a safe low risk play. Selling a portion to become free carried another option or just building a deck?

[Stranger_Danger]

Interested in what your strategy is here. Reached your target price? Have another stock lined up yet to run? This is a safe low risk play. Selling a portion to become free carried another option or just building a deck?

My strategy is to be on the other side of a rampaging herd once I feel we are well past the point where I can't justify the price using any sensible valuation method. I certainly take your point regarding the difficulty of finding sensible investment options in this environment, but that is precisely why most people go down holding handfuls of tulips, even when they know they shouldn't.

[HITMAN]

I'd been watching it climb for a while, when it got to over 100 times earnings was my box ticked to sell. I may regret my choice, but I've done far worse on some of my picks. I'll take out about 20% and invest the remainder.

[trader_jackson]

On a very simplistic basis, MEL has a market cap over $22b yet in FY20 only produced an NPAT of $176m - a PE of about 125x for a company barely growing.
Perhaps more relevant for the sector is price to EBITDAF, which is sitting at about 26x - EBITDAF is barely increasing either - a price to EBITDAF of mid teens (tops) would probably be more appropriate.
I suppose it doesn't matter if someone is perhaps viewed to be a fool to buy into MEL at these prices, as long as their is another fool around willing to pay a higher price.
Crazy times indeed.

[Joshuatree]

I'd been watching it climb for a while, when it got to over 100 times earnings was my box ticked to sell. I may regret my choice, but I've done far worse on some of my picks. I'll take out about 20% and invest the remainder.

Valuations dont seem to matter anymore ehhh.Let alone a possible dry spell ! 400% congrats. Had alook at mine just now 473%. havnt got any ideas where else to put it atm, great prob to have:)

[ScrappyO]

Been holding from the beginning and will keep holding, its not like electricity is some new fad.

[Balance]

The power shares are on fire - utilities offering more than bank deposit rates.

Financial advisors putting ten of millions of dollars into yield share portfolios and chasing stocks.

[dreamcatcher]

Both MEL & CEN up $2 since my last sell to keep some order in portfolio. Prospects for both companies look bright with 'save the planet' demand for green electricity stocks. Sounds ridicules but can see $10-$12 share. While SP is tempting interestingly others already paying these current elevated prices see a future margin.............imo

disc: hold both

[alex f]

Div yield is 2.5%, PE 125, plenty of other companies with growth potential and a slightly better div. Cant understand the prices in this sector, maybe people think there is little downside? Chorus Spark figures are probably way better

[RRR]

S&P global clean energy index has only 31 stocks in total, 2 from NZ - Meridian and Contact with 5% each. I suspect this is the reason for the big spike recently??

https://www.spglobal.com/spdji/en/indices/esg/sp-global-clean-energy-index/#data

Discl - holding since IPO, not selling

[Traderx]

There is basically one indicator to watch for MEL (and to some extent CEN) and that is the shares outstanding in the ICLN etf. The index ICLN follows inexplicably has them as some sort of clean energy heroes (perhaps someone should send S&P a picture of the Stratford power station). Anyway ICLN has been adding shares on an exponential basis (ie adding new money) and therefore has been merrily buying up MEL. This has the potential to get more wild as ICLN is creating its own outperformance bidding up its own holdings, driving more inflows and so on. Anyway MEL investors should keep an eye on this page https://www.sharesoutstandinghistory.com/icln/ check the Ishares page daily!

https://www.ishares.com/us/products/239738/ishares-global-clean-energy-etf

[Joshuatree]

Thanks RRR and Traders.What r shares outstanding; borrowed and shorted?

[kyanar]

Bizarro. iShares Clean Energy ETF is almost 10% composed of just MEL and CEN. That's... awfully overweight for just two companies, surely?

[JohnnyTheHorse]

Thanks RRR and Traders.What r shares outstanding; borrowed and shorted?

Shares outstanding are the number of shares held in the ETF. The ETF manager is incentivised to create new shares as this means they gather more fees. Hence, a large proportion of shares being bought in ICLN are actually new shares being issued. The manager then has to buy shares in the underlying securities.

ETF's can create massive distortions in markets and this is a perfect example. People are buying something because it's going up, and because of this it keeps going up. Most people invested wouldn't have a clue what the underlying companies are, let alone the financials of those companies!

Easy to profit from!

[RTM]

Valuations dont seem to matter anymore ehhh.Let alone a possible dry spell ! 400% congrats. Had alook at mine just now 473%. havnt got any ideas where else to put it atm, great prob to have:)

Same. Great deal John Key did. Where would I put the cash if I sold I wonder.
Just saw this tonight.

[alokdhir]

Same. Great deal John Key did. Where would I put the cash if I sold I wonder.

Just saw this tonight.

Cash will at some point in the future make more sense then being invested in a hugely overpriced company ....MEL is the most valuable company now ...way surpassing the market cap of FPH ...Market distortions dont last forever . Sell and regret is always better then not sell and regret !!

FPH is a defensive play in such markets ...safer then most ...almost equal to cash ...lol

DYOR

[RRR]

As the share price increases, other index funds/ETFs (smartshares, kiwisaver funds) will also keep buying.

https://www.nzherald.co.nz/business/market-close-soaring-meridian-leads-nz-sharemarket-higher-on-day-one-of-2021/TIPKXYQNV2VTOCGD5AV5V6E7UA/

Sorry, premium content - article mentions clean energy ETFs probably the reason for share price appreciation

[bull....]

As the share price increases, other index funds/ETFs (smartshares, kiwisaver funds) will also keep buying.

https://www.nzherald.co.nz/business/market-close-soaring-meridian-leads-nz-sharemarket-higher-on-day-one-of-2021/TIPKXYQNV2VTOCGD5AV5V6E7UA/

Sorry, premium content - article mentions clean energy ETFs probably the reason for share price appreciation

when they have filled there boots we know what happens. anyway im out now so good luck everyone capital gain was more important for me than divs.

[Snoopy]

As the share price increases, other index funds/ETFs (smartshares, kiwisaver funds) will also keep buying.
- clean energy ETFs probably the reason for share price appreciation.


Index tracker funds will not keep buying MEL in a rising market. Nor will they sell if the market for MEL shares falls. This is because if the fund has an index representative size slice of MEL to start with, the share price rises and falls will exactly reflect the required adjustment in value to maintain the required index mandated slice of the action. The only time an index tracking fund will 'trade' its shares is if a company falls in or out of the composition of that index fund.

What I just said above is true for a 'closed fund'. If we are talking about an 'open fund', where the funds under management vary, then they will have to buy more MEL shares as they are given more cash to manage. But they will also be buying more of all shares that make up that index, That means there will be no bias in acquiring Meridian shares, because they will be buying more shares in every company that makes up the index at the same time.

SNOOPY

[RRR]

Almost all ETFs/index funds are open ended. Smartshare ETFs do cap individual holding at 5%, but kiwisaver index funds are most probably investing in the index as per the actual weightage of the index constituents. As the market cap of a company in the index increases (relative to other companies) index funds will have to buy more of the company which goes up..

MCY is cleaner than CEN. TLT is very clean also

Discl - hold all except CEN

[Snoopy]

Almost all ETFs/index funds are open ended. Smartshare ETFs do cap individual holding at 5%, but kiwisaver index funds are most probably investing in the index as per the actual weightage of the index constituents. As the market cap of a company in the index increases (relative to other companies) index funds will have to buy more of the company which goes up..


The part of your post that I have emboldened is not correct.

I will try again to explain my point with a numerical example. Numbers are made up, for ease of calculation, but hopefully you will see the point.

Starting Point

Total NZX100 Market Capitalisation: $100 billion,
Market Capitalization for Meridian Energy: $7 billion

Event

Share price of Meridian goes up 10% to $7.7 billion. Rest of the market goes up and down for an overall change in valuation of everything excluding Meridian of zero.

Finishing Point

Total NZX100 Market Capitalisation: $100.7 billion,
Market Capitalization for Meridian Energy: $7.7 billion

Question

An index fund has a starting point valuation of $10m. How much must an index fund manager spend on MEL shares to maintain their proportional holding of MEL shares in the new index relativity?

Answer

Starting position was that 7% of the index fund was invested in Merdiian shares: 7% of $10m is $700,000.

Ending Point is that fund is now required to have $770,000 worth of Meridian shares, (because the market capitalization of Meridian has increased by 10%), which works out as;

0.1 x $700,000 = $70,000. {A}

Actual increase in value of the existing Meridian shares held in the index fund between staring point and finishing point is:

$770,000 - $700,000 = $70,000 {B}

So the cash value that the fund needs to add to maintain the relative increased weighting of their index share holding is:

{B} - {A} = $70,000 - $70,000 = $0

IOW no action by the fund is required.

Lesson:

No buying or selling of any kind is required to keep the relativity of Meridian's index rating when the market capitalization of Meridian jumps by 10%. It actually doesn't matter what the share price does. Fund value relativity automatically adjusts

SNOOPY

[jamesnk]

I have some MEL shares brought way back during the IPO. I've been keeping zero track of what is going on with these shares.

My question is why is MEL bouncing up and down so much? It seems very volilate for what I guessed was a boring energy company.

[Joshuatree]

Welcome jamesnk. MEL is at an all time high by my chart, hardly boring..Shares seldom go up in straight lines.Read back through the threads , theres lots of great explanations info investors/traders on here who are kindly sharing.

[RRR]

Snoopy - You are right at the current time no adjustments are required. But, my point is next time the index fund/ETF buys the index it will have to buy 7.7% of MEL (based on your simplistic scenario) - 10% higher than 7%. AUMs of index funds/kiwisaver funds are increasing all the time - so any new investments will be at higher prices...

[Snoopy]

Snoopy - You are right at the current time no adjustments are required. But, my point is next time the index fund/ETF buys the index it will have to buy 7.7% of MEL (based on your simplistic scenario) - 10% higher than 7%. AUMs of index funds/kiwisaver funds are increasing all the time - so any new investments will be at higher prices...


RRR wrote:
"As the market cap of a company in the index increases (relative to other companies) index funds (that have to invest new incremental contributions [Snoopy addition]) will have to buy more of the company which goes up.."

OK I get what you are saying now. But I put it to you that what you are saying is effectively index funds 'drive the market'. If, in a bout of 'new buying', an index fund drives the MEL share price too high, then there are other market players who will 'sell down', thus driving the price back down again to take advantage of that situation. So I would challenge your view that index funds would drive a share price higher, because that is assuming that those index funds control the direction of the market, and I don't think your can say that. If that were true, then once an index fund buyer started buying MEL, that would mean the MEL share price could never correct. And we do know that the MEL share price doesn't only go in one direction.

SNOOPY

[winner69]

Guru Mark

@MarkListerNZ
The ICLN global clean energy ETF is up another 9% overnight, on the back of the Dems looking to take the Senate. Meridian is one of the biggest holdings, so watch its share price further over the coming days..

[Joshuatree]

CEO of Meridian 5/01/ NZ Herald "The future and nz's clean,green energy"
..."saving 1.9 to 4.6million tonnes of carbon"

[Tomtom]

MEL has remained a large part of my investments for a long time but I think it's grossly over-valued. Then again, outside of banks, what isn't?

[King1212]

Plenty..

Skc...hgh...kpg...skl...nph....spk ..all undervalued compare with electric companies

Wait till the herds head to the cliff...all will jump

[k14]

Guru Mark

@MarkListerNZ
The ICLN global clean energy ETF is up another 9% overnight, on the back of the Dems looking to take the Senate. Meridian is one of the biggest holdings, so watch its share price further over the coming days..
On that basis is it fair to say this is a longer term investment on a 5-10 year horizon rather than seeking dividend yield? Looking at the fund make up they have Meridian as their biggest holding and Contact in at #5. Could this be a step change in the valuation of these two companies or if there is some negative investor sentiment the price would come down along with the rest of the market?

[trader_jackson]

One thing is for sure: Everyone has forgotten about Tiwai exiting! You would have thought they'd just done a deal to open another brand new smelter and use even more of MEL's product - electricity!

[King1212]

Carzy world of share market tj...

[Shane.trading]

Will the price keep climbing?

[winner69]

Will the price keep climbing?


Of course it will .....insatiable desire to hold these power stocks,

[dreamcatcher]

Both MEL & CEN up $2 since my last sell to keep some order in portfolio. Prospects for both companies look bright with 'save the planet' demand for green electricity stocks. Sounds ridicules but can see $10-$12 share. While SP is tempting interestingly others already paying these current elevated prices see a future margin.............imo

disc: hold both

Highs for the day $11.10 & $9.94 pretty close i reckon...........

Mine are all free-held so can flick a few for quite a number of years but every year SP is higher then my last flick,............ will that continue ?? maybe if Green Funds continue to find these attractive

[Baa_Baa]

Weekly chart, log scale (https://invst.ly/tdcrx).

[King1212]

It will hit $15 ..

[JohnnyTheHorse]

Who else was watching for that $9.10 break? What a run it turned out to be! In at $9.10 and out at $9.88 very soon after.

[Joshuatree]

Anyone joining some dots here.Mel and carbon saving.

[IAK]

Crazy days. My portfolio is well and truly overweight in Mel now (~33%).

[RRR]

I was right in saying that index funds will buy more..:t_up:t_up:..Just kidding

Sold 30% of MEL today.. 7 bagger including dividends from IPO in 7 years..

[bull....]

congrats to those who got yest or day before prices looks like it deflating now

[dreamcatcher]

Blackrock increased holding in CEN by 8,22m imagine doing the same with MEL so no need for panic, these prices will come again soon.

Roughly need 26m shares to increase their holdings 1% from 6.076%

[bull....]

Blackrock increased holding in CEN by 8,22m imagine doing the same with MEL so no need for panic, these prices will come again soon.

Roughly need 26m shares to increase their holdings 1% from 6.076%

i be very surprised if they kept just chasing the price higher and higher

[GTM 3442]

i be very surprised if they kept just chasing the price higher and higher

One supposes they would just prefer a gently rising NAV for the fund and trade accordingly.

[JohnnyTheHorse]

The only people buying shares at these levels are those that have to (i.e. passive funds). Expect erratic price movements to continue.

[dreamcatcher]

i be very surprised if they kept just chasing the price higher and higher

Problem with stock like MEL people just sit forever and never sell until wham fund needs volume. Blackrock only has 6.076% and a new ceiling for SP has been set.......They can't package and sell what they don't have

[bull....]

Problem with stock like MEL people just sit forever and never sell until wham fund needs volume. Blackrock only has 6.076% and a new ceiling for SP has been set.......They can't package and sell what they don't have

if your buying now , you better hope the price dont fall cause it take many years to get your capital back. im the reverse thinking sold to get the capital gain as it was many years of divs. if it takes a year or two to fall back to sensible levels i still be well ahead. i will only lose if it goes heaps higher and stays there

[trader_jackson]

quite uncomforting to see one of NZ's largest listed companies can essentially be manipulated by 1 overseas fund

[JohnnyTheHorse]

Let's see if we're blessed with another pump into the close. Keep an eye on whether bids start stacking up at around 4.20pm.

[Bjauck]

I have some MEL shares brought way back during the IPO. I've been keeping zero track of what is going on with these shares.

My question is why is MEL bouncing up and down so much? It seems very volilate for what I guessed was a boring energy company. I guess that covid and measures introduced to cope with covid has meant that just about no shareholding is boring at the moment. In addition, if a major customer is in supposed existential angst, that makes it more "interesting"!

[dreamcatcher]

Let's see if we're blessed with another pump into the close. Keep an eye on whether bids start stacking up at around 4.20pm. Think they were waiting for you before the auction ;)

Suspect Blackrock don't have enough for another 1% notice so game continues next week noting buying pattern during auction

[alokdhir]

Problem with stock like MEL people just sit forever and never sell until wham fund needs volume. Blackrock only has 6.076% and a new ceiling for SP has been set.......They can't package and sell what they don't have

Why we assume they cant change the composition or introduce more stocks to their fund ICLN ...it can always change weightage of holdings and add to list of its holdings ??

Its surprising they are chasing same stocks to bubble levels or unjustified valuations with full knowledge of results of their activity . Unless they know something or think they know something ...it seems like it suits them creating a bubble in their own fund ICLN ...its adding 6-8 million units almost everyday in new issues !!

5 billion fund ...10% in these two MEL / CEN ...just translates in 500 million and that results in MEL p/e reach 130 and market cap almost 25 Billion ...

Big question is why they let it unfold like this ...simple answer seems as they wanted it this way ...thats why included NZ stocks with high weightage in the fund to boost its NAV by this cycle of new money chasing returns which comes from ICLN's need to chase these stocks because of new funds pouring into it !!:scared:

[Joshuatree]

CEO of Meridian 5/01/ NZ Herald "The future and nz's clean,green energy"
..."saving 1.9 to 4.6million tonnes of carbon"

[JohnnyTheHorse]

After a big drop this morning the usual buying accumulation has appeared on the depth in the last 30mins. Around 8m new ICLN units were issued on Friday (US time). Expecting a grind upwards from here into the close. Won't hold overnight as expect a reasonable chance of consolidation on ICLN tonight.

Disc: in for a trade. Make sure you use stops.

[dreamcatcher]

Any manipulation of SP has to achieve its goal of accumulating 'at time of writing' Cen-68ok Mel-1.28m we see how this pans out at days end.

disc hold both currently no interest in selling ANY

[alokdhir]

If the shares fall into closing or latter then its called Distribution if goes up then accumulation ...only end tells what it was ....lol

[dompf]

I tell you Bull..... saw this from a mile away. I’m not in this one but what a ride this would’ve been for that insto.

[alokdhir]

Today can be MEL / CEN day ...Another 10 million new ICLN issued so now they need invest about 60 million in these 2 ASAP :t_up:

[stoploss]

Today can be MEL / CEN day ...Another 10 million new ICLN issued so now they need invest about 60 million in these 2 ASAP :t_up:
Could they have purchased the shares last week and be issuing the units now ?

[alokdhir]

Could they have purchased the shares last week and be issuing the units now ?

Normally thats not the procedures for open ended funds like ICLN ...they sell at current NAV to new buyers then buy their current portfolio with new funds they get !!

Its very possible that Friday sales were also not yet invested ...

[winner69]

Brokers must be loving it ...kaching

[alokdhir]

Brokers must be loving it ...kaching


Day trader's dream too buddy !!

[stoploss]

Normally thats not the procedures for open ended funds like ICLN ...they sell at current NAV to new buyers then buy their current portfolio with new funds they get !!

Its very possible that Friday sales were also not yet invested ...
Looks more like a pump n dump ......

[dreamcatcher]

Approx traded numbers since 1/12/2020.......... MEL-76m CEN-42m

Blackrock CEN 4/12 11.1% (79m) 23/12 12.2% (87m) 8/1 13.34% (95m)

" MEL 10/11 5.04% (129m) 23/12 6.07% (155m)

[Marilyn Munroe]

Majority state owned gentailers have a shareholding limit of ten percent, other than Her Majesty the Queen in right of her Dominion of New Zealand.

So if you are planning to sell into this rising price do so before whoever is buying "open circuit" gets to ten percent.

Boop boop de do
Marilyn

[winner69]

Always good to read different points of view to learn and limit one’s biases.

The Folly of Renewable Energy

http://www.rationaloptimist.com/blog/the-folly-of-renewable-energy/#.X_zklyMYxN0.linkedin

[Bjauck]

Majority state owned gentailers have a shareholding limit of ten percent, other than Her Majesty the Queen in right of her Dominion of New Zealand.

So if you are planning to sell into this rising price do so before whoever is buying "open circuit" gets to ten percent.

Boop boop de do
Marilyn
Is NZ still a Dominion? We joined the UN as "New Zealand" and adopted the statute if Westminster in 1947 . The Constitution Act removed any right for the UK to legislate insight of the British Crown over its dominion of New Zealand.

[kyanar]

Is NZ still a Dominion? We joined the UN as "New Zealand" and adopted the statute if Westminster in 1947 . The Constitution Act removed any right for the UK to legislate insight of the British Crown over its dominion of New Zealand.

No. New Zealand is no longer a Dominion, it's a sovereign country, and the head of state is the Queen of New Zealand, not the Queen of England. That she holds the title of Queen of England (and Queen of Canada, Queen of Australia, etc) is irrelevant.

The actual title is "Her Majesty the Queen in Right ofNew Zealand", usually prefixed with "Minister of State Owned Enterprises, on behalf of" or "Minister of Finance, on behalf of".

[Scrunch]

Always good to read different points of view to learn and limit one’s biases.

The Folly of Renewable Energy

http://www.rationaloptimist.com/blog/the-folly-of-renewable-energy/#.X_zklyMYxN0.linkedin

Yes, and also interesting to google one of the key statistics quoted. The folly of Renewable Energy quotes Hydro as supplying 2.5% of the world's energy consumption.

The website link below estimates that in 2019 hydro was 15.63% of the world's energy consumption. It has a country by country breakdown over time. The key data source was information from BP which looks pretty comprehensive.
https://ourworldindata.org/grapher/share-electricity-hydro?tab=table&time=earliest..latest

That's a pretty big gap between different sources, and I'd tend to believe the BP data. It does however make it odd that the Blackrock renewables index has such a high weighting towards CEN and MEL. I can only guess that in many other countries major hydro dam's are government owned and therefore unable to be directly invested in (or are owned by companies that also have coal/oil power plants meaning renewable energy is not the majority of their activity).

[iceman]

Yes, and also interesting to google one of the key statistics quoted. The folly of Renewable Energy quotes Hydro as supplying 2.5% of the world's energy consumption.

The website link below estimates that in 2019 hydro was 15.63% of the world's energy consumption. It has a country by country breakdown over time. The key data source was information from BP which looks pretty comprehensive.
https://ourworldindata.org/grapher/share-electricity-hydro?tab=table&time=earliest..latest

That's a pretty big gap between different sources, and I'd tend to believe the BP data. It does however make it odd that the Blackrock renewables index has such a high weighting towards CEN and MEL. I can only guess that in many other countries major hydro dam's are government owned and therefore unable to be directly invested in (or are owned by companies that also have coal/oil power plants meaning renewable energy is not the majority of their activity).

That's exactly right. One has to wonder now if Governments around the World that hold these assets may look to NZ as a blueprint of what can be achieved with shared ownership and Governments being able to raise potentially a LOT of money quite easily in the post COVID World !!

[Tomtom]

That's exactly right. One has to wonder now if Governments around the World that hold these assets may look to NZ as a blueprint of what can be achieved with shared ownership and Governments being able to raise potentially a LOT of money quite easily in the post COVID World !! Or perhaps a warning even.

[Dlownz]

Tiwai continuing to 2024. I think this wasn't unexpected news

[CraftyBeer]

Seemed to be on the cards, especially with aluminium prices rising (I believe).

[winner69]

Rio Tinto got their way again ...well played them

[Raz]

Rio Tinto got their way again ...well played them

Well said, this was not unexpected.

[Louloubell]

Curious to see what it will do to the SP or if this is built in already? Certainly not unexpected.

[winner69]

Jeez down to 770 something

Didn’t seem that long it nearly got to 10 bucks.

[Onion]

Jeez down to 770 something

Didn’t seem that long it nearly got to 10 bucks.

I sold part of my holding at $9.55 - thought I was clever for a while - now think I should have sold more. But what would be the buy-back-in price? Who knows in this crazy market at present? Normal valuations just don't make sense any more.

[peat]

“I’m personally very energised to start 2021 on these terms" says Neal Barclay Chief Executive.

very droll.

[kiora]

Whos getting shafted here? Grrrh
Pull the plug and tell them to clean up their mess
"Meridian’s comments about the profitability of the smelter – and the July timing of the pricing element of its offer –may raise questions over whether and why the Government might still be prepared to offer the smelter a separate discount on the transmission charges it pays to Transpower.

Energy Minister Megan Woods said last week that the Government was independently still in talks with Rio Tinto about those charges – and also about the smelter’s responsibilities to clean-up the smelter site when it closes.?
https://www.stuff.co.nz/business/123976062/its-a-very-profitable-smelter-now-meridian-boss-says-after-price-beatdown

[Waltzing]

perhaps because the market doesnt really know what to value the gens at. Interesting to see what the SNOP thinks about this one. Would never have touched it at 10 and yes a total sell. It wont revalue till interest rates go up and the div is back to where the market understands value. But really what value is green energy if climate change is as bad or worse than we realise. These stocks could be the next GOLD or bit coin X n.

[Jantar]

Whos getting shafted here? Grrrh
Pull the plug and tell them to clean up their mess
"Meridian’s comments about the profitability of the smelter – and the July timing of the pricing element of its offer –may raise questions over whether and why the Government might still be prepared to offer the smelter a separate discount on the transmission charges it pays to Transpower.... What the smelter are asking for isn't discount, but merely a fair transmission cost. Tiwai pay much more than any other user in NZ on a MW per km basis, a total of 7% of the entire county's transmission costs, yet there are only 640 km (4 circuits, each 160 km) in length compared to the more than 12,000 km of Transpower's transmission lines in NZ .

In fact a complete new set of transmission lines from Manapouri to Tiwai could be built for what Tiwai pays in just over 5 years transmission costs.

Transpower and the EA are looking at a new TPM (Transmission Pricing Methodology) that would reduce the cost to Tiwai to bring them into line with what the rest of the country pays.

[Vesper]

Even if this reached close to $10 again, well beyond what it 'should' be I'm not sure what one would spend the windfall on unless one needed to buy something fancy with the cash. I'm not having an easy time of spotting where else I would invest the money where I am not already overweight (e.g. OCA) so as far as I'm concerned its hold for a long time yet. its still $2 higher than it was even a year ago.

[peat]

yeh definitely coming back to fair value now with a PE of 103


/sarcasm.

[Norwest]

You would think MEL was an tech company with amazing growth ahead looking at that PE ratio... until you wake up and realize its a boring gentailer.

[kiora]

What the smelter are asking for isn't discount, but merely a fair transmission cost. Tiwai pay much more than any other user in NZ on a MW per km basis, a total of 7% of the entire county's transmission costs, yet they are only 640 km (4 circuits, each 160 km) in length compared to the more than 12,000 km of Transpower's transmission lines in NZ .

In fact a complete new set of transmission lines from Manapouri to Tiwai could be built for what Tiwai pays in just over 5 years transmission costs.

Transpower and the EA are looking at a new TPM (Transmission Pricing Methodology) that would reduce the cost to Tiwai to bring them into line with what the rest of the country pays.

But but but was it $0.05 /kw?
Surely they can find some other industry to pay more than this?
https://www.stuff.co.nz/business/119415167/path-cleared-for-aluminium-smelter-to-get-discount-on-64m-annual-transpower-bill

[dobby41]

But but but was it $0.05 /kw?
Surely they can find some other industry to pay more than this?
https://www.stuff.co.nz/business/119415167/path-cleared-for-aluminium-smelter-to-get-discount-on-64m-annual-transpower-bill

Now's the time to work on that replacement industry.
One idea was datacentres with a cable from south to Aus - but they take time to get built - time they now have.
Build the industries and next time the smelter comes calling tell them the new price or bu***r off.

[Jantar]

But but but was it $0.05 /kw?
Surely they can find some other industry to pay more than this?
https://www.stuff.co.nz/business/119415167/path-cleared-for-aluminium-smelter-to-get-discount-on-64m-annual-transpower-bill
Yes, the energy price was $0.051 per kWh. It is the transmission price you mentioned that I replied to. Most people fail to understand that the energy price and the transmission price are charged separately for large industries.

[Hoop]

yeh definitely coming back to fair value now with a PE of 103


/sarcasm.


You would think MEL was an tech company with amazing growth ahead looking at that PE ratio... until you wake up and realize its a boring gentailer.

Measuring MEL's PE Ratio and comparing it to "average" all market PE Ratios is not very meaningful. MEL has high non cash costs such as depreciation which makes the PE Ratio much higher than the "norm".
It's best to value MEL by other metrics or if you must use PE Ratio and try to make it meaningful..follow MEL's PE history so to compare then to now and every year in between to see the changes in its valuation.. then once you have that historic PE data, allowances have to be made as interest rates are now considered to be the primary driver for PE Ratios and affects the valuation.. I didn't say it was easy.

Is it over valued ?..I'm too busy to crunch the numbers.
Disc: have no MEL

[winner69]

Hoop's busy so I puled some numbers from Morningstar database

the 2021 NPAT is a forecast.

Need to bear in mind that the NPAT/EPS used by NZX includes abnormals and normalised EPS was a bit higher (lower PE)

Interesting forecasts seems to have profits declining over the next few years.... I know very little about this sector so can't comment if right

However the numbers - based on Hoops comments PE is still probably a bit high

[JohnnyTheHorse]

Back to where things were just before Xmas! Relentless selling today - pull up a 15min chart and look how it has just be steadily down with zero breather. Still expecting a bounce that can be played before the end of the day.

[101nick101]

Trading halt today and nobody (media) or otherwise is talking about it...

Edit* sharesies has now removed the trading halt. Weird...

[Jantar]

Trading halt today and nobody (media) or otherwise is talking about it...

Edit* sharesies has now removed the trading halt. Weird... Is there a market notice advising this?

[stoploss]

Just the monthly operating report, onwards and upwards

[bull....]

i think the buzz in power company stocks is over. exited at near the top will wait for the eventual re-entry much lower.

[Sideshow Bob]

From Business Desk (thats an average of about $8.07/share):

BlackRock spent $210m on Meridian shares (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=ed5d38132d&e=3b6f9185d3)BlackRock spent about $210 million buying 26 million Meridian Energy shares in the past month, paying as much as $9.50 per share, as a wave of clean energy investment overwhelmed the local market.
A significant shareholder notice, posted on Tuesday, revealed the world’s largest fund manager bought more than 1 percent of all Meridian shares on issue between Dec. 22 and Jan. 22, driving the price through the roof.
Read the full story at BusinessDesk — subscribe now (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=46a8b2a3c9&e=3b6f9185d3)
Read on » (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=ca3fcab973&e=3b6f9185d3)

[turnip]

Trading halt today and nobody (media) or otherwise is talking about it...

Edit* sharesies has now removed the trading halt. Weird...

There is always a short automatic trading halt whenever a company makes an announcement marked price sensitive, such as Meridian's monthly operating report today.

[dreamcatcher]

i think the buzz in power company stocks is over. exited at near the top will wait for the eventual re-entry much lower.

If you are waiting for a 5 or 6 re-entry you may be disappointed as those days are gone. Now waiting for the next wave of green funds come looking and believe Blackrock are far from finished buying, the world now values these power shares highly. Contact already has analysis with $9+ valuations. Meridian always was a favorite with funds will not re-rate downwards unless demand for electricity disappears overnight.

[kyanar]

Did it get a speeding ticket? I see a pretty decent drop on open.

(Edit: nevermind, answered)

[koko90]

What is going on with the SP? I thought the pump was over but keeps dropping further. How much further is it likely to drop?

[Ohdoyle]

Who knows, I must admit though I am starting to seriously consider buying in.

Divedend yield back over 3 percent which to me represents reasonable value in the current climate. Only thing that gives me pause is such a dramatic drop leading up to reporting season is not normally a good sign.

[bull....]

rising bond yields make these stocks less attractive now , there fundamental valuations have changed going forward if this is the case. highly unlikely your see those highs again that santa gave you

[flyinglizard]

Waiting for the earning announcement on 24th of Feb, need to see the whole picture and re-evaluate the SP.

PE is still historical high, around 91 at price of 6.19, non-stop falling down to 24th of Feb, maybe further if earning is not good.


12301

[Soolaimon]

Still going down..... someone know something the rest of us don't?

[winner69]

Grant from Hinden Green says -

@G_T_Davies
Meridian Energy is down 41% from it's highs of January 7th this year. For context, the NZX50 only dropped 32% over about the same period in Feb/March last year as the proverbial hit the fan worldwide. Meridian, a utility, should not behave like this. ETF fund flows for the win.

[flyinglizard]

Grant from Hinden Green says -

@G_T_Davies
Meridian Energy is down 41% from it's highs of January 7th this year. For context, the NZX50 only dropped 32% over about the same period in Feb/March last year as the proverbial hit the fan worldwide. Meridian, a utility, should not behave like this. ETF fund flows for the win.

I am afraid that even it goes down to $4.50, the PE is still as high as 65.22. I do believe that some big guys are shorting on this one.

[bull....]

Still going down..... someone know something the rest of us don't?

yes must be etf selling they could in theory drive it to a dollar a share ... thats how those etf things work must sell at any price , must buy at any price

[Beagle]

The volatility has been truly remarkable. The incredible pressure of ESG fund buying, (as though ESG is more relevant that traditional metrics like earnings and dividend yield), forcing it up to nearly $10 was breathtaking to say the very least. I am expecting it to revert to its recent trading range of $4.50-$5.00 where it traded for quite some time before all this madness began.
I hope those with their heads screwed on sold into the ESG fueled irrationality and are now well positioned to buy this quality company again at a more realistic price.

Disc: I might be interested in a modest stake at around $4.50

https://www.stuff.co.nz/business/124232998/energy-stocks-tank-pulling-down-sharemarket-as-investors-eye-growth

[Baa_Baa]

Weekly chart, log scale (https://invst.ly/tdcrx).

Not boasting (hopefully), but remember this? I recall a few other helpful members here putting out the warnings, good on you folks, hope people took heed of it. When it's too good to be true, it is.

[winner69]

Yes indeed Beagle ..... MEL became a plaything for clean energy funds which created this madness

But life goes on for MEL the company and they will continue doing their ‘ESG things’ and perform well....irrespective of what index funds think of them.

I think it’s great that Meridian’s reason for being (Purpose) is all about ‘clean energy for a fairer and healthier world’..

They say - We believe that by doing the right thing by people and the planet, we’re working to build a better future for our customers, communities, and environment.

And when they talk about value: The components that make up how we create value – our financial reserves, physical assets, technology platforms, our people, the relationships we have with a variety of stakeholders, and natural resources (particularly water)

No mention of profits or maximising shareholder returns.- just a reliable return to all.

[Lego_Man]

For those wanting some additional background, S&P just announced a change to their weighting methodology for the underlying index that the Blackrock ETF replicates. MEL are currently around 4-5% weights in this index which has at least 6-7bn of ETF money folowing it. S&P launched a review in response to the clear observation of the effects that their buying was having on a whole lot of underlying stocks in the index.

Now, effectively the MEL and CEN weights are going to be liquidity capped after the next rebalance which will happen at the end of March. Broker estimates are for up to 500m worth of stock to be sold by Blackrock for both to make this rebalance.

The price is tanking because local fund managers and instos are getting out ahead of the ETF selling wave. MEL is getting hit more as there was already less fundamental support (lower dividend yield).

[Lego_Man]

I hope he was telling all his clients to sell MEL at 9-10 bucks then.

[biker]

Not boasting (hopefully), but remember this? I recall a few other helpful members here putting out the warnings, good on you folks, hope people took heed of it. When it's too good to be true, it is.

Actually some good broker comments at that time also about ‘unrealism’
Sold all MEL @ $9.47 and CEN $11.00. Holding for the dividend is out of the question at those crazy prices.
Now about 60K better off than if I’d kept them.

[Tomtom]

Hopefully it falls a lot. I would love the opportunity to put some more cash to work in a safe, dividend paying utility. Set and forget is my perfect investment strategy.

[Scrunch]

For those wanting some additional background, S&P just announced a change to their weighting methodology for the underlying index that the Blackrock ETF replicates. MEL are currently around 4-5% weights in this index which has at least 6-7bn of ETF money folowing it. S&P launched a review in response to the clear observation of the effects that their buying was having on a whole lot of underlying stocks in the index.

Now, effectively the MEL and CEN weights are going to be liquidity capped after the next rebalance which will happen at the end of March. Broker estimates are for up to 500m worth of stock to be sold by Blackrock for both to make this rebalance.

The price is tanking because local fund managers and instos are getting out ahead of the ETF selling wave. MEL is getting hit more as there was already less fundamental support (lower dividend yield).

Thanks for the insight. Very useful

[bull....]

For those wanting some additional background, S&P just announced a change to their weighting methodology for the underlying index that the Blackrock ETF replicates. MEL are currently around 4-5% weights in this index which has at least 6-7bn of ETF money folowing it. S&P launched a review in response to the clear observation of the effects that their buying was having on a whole lot of underlying stocks in the index.

Now, effectively the MEL and CEN weights are going to be liquidity capped after the next rebalance which will happen at the end of March. Broker estimates are for up to 500m worth of stock to be sold by Blackrock for both to make this rebalance.

The price is tanking because local fund managers and instos are getting out ahead of the ETF selling wave. MEL is getting hit more as there was already less fundamental support (lower dividend yield).

interesting indeed , why would you buy ahead of this then eh

[HITMAN]

Looks like its going to keep dropping to a more realistic value. I regretted selling at $8.10 for a few days as the price continued to rise, but those regrets have disappeared. If it moves south of $5 it may be time to step back a board the train.

[bull....]

Looks like its going to keep dropping to a more realistic value. I regretted selling at $8.10 for a few days as the price continued to rise, but those regrets have disappeared. If it moves south of $5 it may be time to step back a board the train.

good move they were rediculously overvalued , make sure you take account of rising bond yields also as these make gentailers ( bond proxies) less attractive the more bond yields go up

[101nick101]

Sold out at $7.20 and watched it climb to over $9 (crazy stuff). Will buy back in in the next month or so.

[Hoop]

Reached it's low point last Monday of $5.55ish ralled to $6.45 and now back to $5.95...Seems like we may have witnessed a dead cat bounce, if so, that is a bearish outlook...MEL has to regain the $6.00 area to keep support above the EMA200 (bear line).

Disc: added to my watchlist

[Beagle]

Reached it's low point last Monday of $5.55ish ralled to $6.45 and now back to $5.95...Seems like we may have witnessed a dead cat bounce, if so, that is a bearish outlook...MEL has to regain the $6.00 area to keep support above the EMA200 (bear line).

Disc: added to my watchlist

Doesn't look good on the chart that's for sure mate :scared:
I'm expecting this to retrace back to its support in the $4.50 - $5.00 range where it will be fair value in my opinion. Unfortunately the pending index rebalancing in this and others is sucking the wind out of GNE's sails too and they've come off the foils well and truly.

[Hoop]

Doesn't look good on the chart that's for sure mate :scared:
I'm expecting this to retrace back to its support in the $4.50 - $5.00 range where it will be fair value in my opinion. Unfortunately the pending index rebalancing in this and others is sucking the wind out of GNE's sails too and they've come off the foils well and truly.
My opinion of fair value is $4.00 - $5.00..I thought MEL was getting overvalued from mid 2019 onward and before Co-vid I casually mentioned to few people who were thinking of shifting to defensive stocks such as MEL that I thought $4.80 was too high..

Forward wind to the 2020 year..Ha Ha :pso much for my opinion.

However I do know that a stock priced at their fundamental value occurs only for a fleeting moment in time. Most of the time they oscillate between fundamentally over valued or under valued states...(which makes high Beta stocks so attractive [off topic])

Kinda makes your eyes water when you think what a future MEL price could be in it's undervalued state..eh

[Beagle]

My opinion of fair value is $4.00 - $5.00..I thought MEL was getting overvalued from mid 2019 onward and before Co-vid I casually mentioned to few people who were thinking of shifting to defensive stocks such as MEL that I thought $4.80 was too high..

Forward wind to the 2020 year..Ha Ha :pso much for my opinion.

However I do know that a stock priced at their fundamental value occurs only for a fleeting moment in time. Most of the time they oscillate between fundamentally over valued or under valued states...(which makes high Beta stocks so attractive [off topic])

Kinda makes your eyes water when you think what a future MEL price could be in it's undervalued state..eh

Yeah it does for sure mate. Might be best to keep a very close eye on the TA and forget about notions of where theoretical fair value is for a while. $500m of stock looking for a home with pending index changes is a fair bit of weight overhanging the market. Could have quite an effect on the share price at the time of the index change that's for sure !!

[RTM]

Yeah it does for sure mate. Might be best to keep a very close eye on the TA and forget about notions of where theoretical fair value is for a while. $500m of stock looking for a home with pending index changes is a fair bit of weight overhanging the market. Could have quite an effect on the share price at the time of the index change that's for sure !!

And on the flip side of that there ixx as all of us retirees with our money in the bank at 1% or whatever it is. Should underpin the price a bit I would think.

[Beagle]

And on the flip side of that there ixx as all of us retirees with our money in the bank at 1% or whatever it is. Should underpin the price a bit I would think.

Fair point mate. Might as well spend some of your money on a boat than get 1% ;) MEL is safe yield, nice and clean and green (all the ESG boxes ticked) for sure. But what's a fair return in a rising interest rate environment when you can get 8-10% gross elsewhere in some other stocks (e.g. HGH HLG) ?

[RTM]

Fair point mate. Might as well spend some of your money on a boat than get 1% ;) MEL is safe yield, nice and clean and green (all the ESG boxes ticked) for sure. But what's a fair return in a rising interest rate environment when you can get 8-10% gross elsewhere in some other stocks (e.g. HGH HLG) ?

Yeah...thats right. But in a nice diversified portfolio...we wouldn't want to large a %'s of our money in any one stock..would we ? And one pretty quickly runs out of safe'ish NZ companies to park ones money.

[Beagle]

Yeah...thats right. But in a nice diversified portfolio...we wouldn't want to large a %'s of our money in any one stock..would we ? And one pretty quickly runs out of safe'ish NZ companies to park ones money.

I'm really pushing the 15% limit boundary close with HLG and HGH so yeah I concur but I am also very wary of where 10 year Govt bonds will end up by the end of this year. Up from 1.0% to over 1.5% in just the last 3 weeks. Paywalled https://www.nzherald.co.nz/business/why-the-new-zealand-sharemarket-is-heading-south/FIEK3PPN4UMRPG7ELHEFYKB7UA/

Perhaps 10 year Govt stock might end up at over 3% by the end of the year which has implications for the price of safe modest yielding stocks like this one that aren't paying much more than that. On the TA side of things I note a clean break down through the 100 day MA so I am staying out of this one until a new clearly defined floor is in place.

[RTM]

I'm really pushing the 15% limit boundary close with HLG and HGH so yeah I concur but I am also very wary of where 10 year Govt bonds will end up by the end of this year. Up from 1.0% to over 1.5% in just the last 3 weeks. Paywalled https://www.nzherald.co.nz/business/why-the-new-zealand-sharemarket-is-heading-south/FIEK3PPN4UMRPG7ELHEFYKB7UA/

Perhaps 10 year Govt stock might end up at over 3% by the end of the year which has implications for the price of safe modest yielding stocks like this one that aren't paying much more than that. On the TA side of things I note a clean break down through the 100 day MA so I am staying out of this one until a new clearly defined floor is in place.

At times like this I resort to another posters method and check the dividend against my buy price....$1.50. I did try to sell recently but was to greedy. Nearly 1/3 of your stocks (income for me) in two stocks....not for me. Will continue to sit and watch.

[dreamcatcher]

Should read both MEL & CEN threads as both similar with suggestion of no need for bargain basement selloff from S&P weighting changes

[Sideshow Bob]

Meridian Energy Limited 2021 Interim Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/368069)

Meridian Energy interim net profit higher, cash earnings1lower24 February 2021

Meridian Energy has reported a 19% increase in net profit for the six months ended 31 December2020, which includes positive changes in the value of hedge instruments. Excluding these hedgevalue movements, Meridian has reported a 9% decrease in its EBITDAF1.

Customer growthcontinued, however lower New Zealand hydro generation and lower market prices in Australianegatively impacted EBITDAF from last year’s record level.Chief Executive Neal Barclay says Meridian’s performance partly reflected less than favourableconditions compared to the prior year.

Overall, our generation volumes were down 7% on the priorperiod due to lower starting storage and lower inflows into our catchments since October 2020.Generation volume and price volatility are a feature of New Zealand’s hydro-based renewableelectricity system; however the underlying performance of the business remains strong and we wereparticularly pleased that the strength of the Meridian and Powershop brands continued to shinethrough.“Customer numbers across New Zealand and Australia now exceed half a million and have grown 3%since June 2020. It is pleasing to see continued customer growth, demonstrating that our commitmentto excellent service and support is delivering,” Mr Barclay says.

Meridian announced in January 2021, that it had reached an agreement with its largest customer, RioTinto. Rio Tinto, who operate the Tiwai Point Aluminium Smelter in Southland will extend the plannedclosure period from August 2021 to December 2024.“The additional four years of smelter operation will be invaluable to the Southland region as it allowstime to create new business opportunities and new jobs for Southlanders. Meridian is committed toworking with a range of parties who are progressing some exciting new opportunities in Southland,from mega scale data centres to hydrogen production at scale. The availability of large amounts ofrenewable energy in Southland is a point of difference for the region and our country,” says Barclay

.“As a 100% renewable energy generator who is committed to protecting our environment, we’resupportive of the Climate Change Commission’s advice. We believe that the electricity sector is ahuge part of the solution to decarbonise our economy and support New Zealand businesses and1 EBITDAF is a commonly used non-GAAP measure reflecting earnings before interest, tax, depreciation,changes in fair value of hedges and other significant items (see page 2 for a reconciliation).meridianenergy.co.nzPG 2individuals to make the changes they need.

Our decision to build the new Harapaki wind farm is ournext step towards that solution.“We know that we will play a part in supporting our customers, from large businesses who need toinvest in technology and transition from fossil fuels, to every day New Zealanders. Everyone in ourcountry has the opportunity to prosper and thrive as we lock in net zero by 2050,” says Barclay.

[Sideshow Bob]

Meridian to build $395 million wind farm in Hawke’s Bay - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/368070)

Meridian to build $395 million wind farm in Hawke’s Bay

24/2/2021, 8:31 amGENERALMeridian Energy will soon begin construction of a new $395 million wind farm in Hawke’s Bay, boosting New Zealand’s ability to take action on climate change and accelerating the transformation of the economy to clean energy sources.

The Harapaki Wind Farm will be New Zealand’s second-largest wind farm with 41 turbines generating 176 MW of renewable energy, enough to power over 70,000 average households. The construction will take around three years and is expected to create 260 new jobs.

Meridian Energy Chief Executive Neal Barclay says the decision to commence construction now is a sign of confidence that clean energy infrastructure can deliver strong economic benefits.

“Renewable generation is an engine of economic growth for New Zealand. There’s a massive clean energy transformation underway in the New Zealand economy and now is the time to tackle climate action to support Aotearoa accelerate its transition away from fossil fuels.

“We need to move faster to convert our fossil fuel industries to clean energy, convert our transport fleet to electricity and ensure every new industrial development is powered by clean energy.”

Mr Barclay says New Zealand will need to build more grid-scale wind generation every year to reach its international and domestic emissions targets and meet demand as transportation and industry move from fossil fuels to clean energy.

“Recent advice from He Pou a Rangi, the Climate Change Commission, clearly signals that New Zealand must ambitiously pursue bold climate goals to achieve net-zero emissions, and this is what getting there looks like. Building more new renewable generation like Harapaki will help us lower emissions, reduce our reliance on fossil fuels and speed up our transition to a productive low carbon economy,” Mr Barclay says.

Meridian is the country’s largest and most experienced owner of wind farms, with five currently in operation around New Zealand. Mr Barclay says Harapaki will use advanced wind generation technology from Europe to set new benchmarks for turbine efficiency and sustainable construction practices. Design reviews have lowered the amount of concrete and steel needed in construction, reducing the overall carbon footprint of the project by over 30%.

“Our vision is for Harapaki to be New Zealand’s most sustainable wind farm and one that delivers transformative economic growth and advances our goals for climate action,” Barclay says.

Siemens Gamesa Renewable Energy:
Supply, installation and maintenance of 41 x SWT-DD-120 4.3MW wind turbines

Hick Bros Spartan Joint Venture:
Construction of all roads, turbine foundations and crane hardstands

Transpower:
Supply, installation and commissioning of substation and 220kV grid connection

Unison Contracting Services:
Electrical services for substation, cable jointing and 33kV switchgear installation

Hyosung:
Supply, install and commissioning of 220/33kV transformers

Prysmian:
Supply of 33kV reticulation cable

[Soolaimon]

Down quite a bit today, backed the trailer in for a few.

[bull....]

should be under 5 soon , see morning star have a 3.90 price valuation

[Tomtom]

Let's hope MorningStar are correct, as an existing holder I would definitely be interested at those levels.

[alokdhir]

Let's hope MorningStar are correct, as an existing holder I would definitely be interested at those levels.

With Bond yields rising your wish will be fulfilled sooner then u think ....

[kiora]

Finally government putting foot down over contamination
"3.5 c/kw smelter very profitable" for who? not NZ inc
https://www.stuff.co.nz/business/124485416/aluminium-smelter-issues-assurance-over-cleanup-after-government-shelves-talks

[Tomtom]

With Bond yields rising your wish will be fulfilled sooner then u think .... I fear RBNZ will knock them back. Reserve Banks don't appear to want the market dictating pricing to any great extent.

[alokdhir]

I fear RBNZ will knock them back. Reserve Banks don't appear to want the market dictating pricing to any great extent.

I agree with u but they cant keep overlooking heated economies for long ...though they may think its too early to let go of the yields to just market forces ...eventually they will rise slowly to almost 3% by end of the year ...In nutshell safe divvy stocks like MEL will become sluggish from now onwards ...mantra will become to sell rises and not buy the dips ...Underperformers of interest rate rising cycle of next 2-3 years

[dobby41]

Finally government putting foot down over contamination
"3.5 c/kw smelter very profitable" for who? not NZ inc
https://www.stuff.co.nz/business/124485416/aluminium-smelter-issues-assurance-over-cleanup-after-government-shelves-talks

The CEO gave an assurance - hollow words.
As for the power price - we can't use the power otherwise so the price is OK so long as it covers cost of production.
Now is the time to rejig the network so that the power can be more profitably used.

[Lego_Man]

I fear RBNZ will knock them back. Reserve Banks don't appear to want the market dictating pricing to any great extent.

Not really a market then, is it.

[peat]

Not really a market then, is it.

CB's are part of the market ultimately. It certainly reduces the perfection of the marketplace (in economic terms) but they are players....

[Tomtom]

Countering that however is that we are heading into an energy squeeze due to issues with gas production (short term) as well as imbalances between supply and demand during decarbonisation (long term.)

[ratkin]

When is it safe to buy in?

[Beagle]

I read the other day the ESG index rebalance is 16 April. $4.00 - $5.50 was the trading range before the recent hysteria over ESG.
I'd be looking towards the bottom of that trading range as perhaps being an opportune time to go swimming in the Manapouri lake again.
https://en.wikipedia.org/wiki/Manapouri#/media/File:Approaching_Manapouri_from_the_lake.jpg

[JohnnyTheHorse]

Shorting MEL from around the peaks has earnt me at least a lifetime worth of power so far :)