Originally Posted by
Snoopy
Here is my take on where I think Mr Market should take the prices of the 'Big 4' gentailers with today's announcement.
1/ Meridian Energy Given the large rise in share price of late, I expect the price of MEL to fall. Today's deal will, at best, lock in today's level's of profitability. So for Mr Market, it will be a case of 'buy the rumour' 'sell the fact'.
2/ Contact Energy This should be enough to 'green light' the new Tauhara baseload geothermal station. Good news, although with the share price having risen so much already, CEN should be flat going forwards on today's news.
3/ Mercury Energy This is great news because stable power demand in the south will mean Mercury's new Turitea windfarm will allow the increased use of Waikato River system as a 'battery' in the North. Water flow can therefore be better optimised for profit. Price to rise.
4/ Genesis Energy Possibly the end of Unit 5 at Huntly (to be replaced by Contact's Tauhara) and maybe the end of the Rankine units as well as the Waikato river becomes the North's new battery. A serious erosion in the company's generation base. Share price to fall.
SNOOPY