NZ investors looking for good opportunities, UC political scientist says

The huge interest today in the sale of Mighty River Power shares demonstrates there are plenty of New Zealand investors looking for good opportunities, a University of Canterbury (UC) political scientist said today.

One hundred thousand people have pre-registered for a stake in Mighty River Power. Up to five would-be investors per second were signing up online on the share sale website to learn more about Mighty River Power's share sale. Reportedly, interest in the share sale compares with interest in the Contact Energy share offer in 1999.

UC Professor Alex Tan said with relatively low term deposit interest rates, investors were looking for other ways to make money.

``As open as our economy is, foreign ownership of Mighty River Power is of course always possible. There is only so much money available in New Zealand for investment and, when you compare it with institutional investors overseas, the amount of cash available here is small.

``But does it necessarily mean that foreign ownership is bad?  Does it always mean local ownership is always good?  We only need to take a look at the finance companies that are locally owned that went under and lost the money of many local investors and pensioners.

``There will always be an economic nationalist argument that will always rile the citizens up and it can be used for political gains by politicians of any ideological stripe.  But economic nationalism may limit the wealth creation domestically.

``There is certainly existing empirical evidence if you observe comparative across a broad spectrum of countries for these observations,’’ Professor Tan said.