A leading New Zealand fund manager is disturbed that people are putting their hands up to buy shares in state-owned companies without knowing the price and treating the investments as no brainers.
Fisher Funds managing director Carmel Fisher says investors were asking about the partial privatisation of state-owned companies at an investor roadshow her company has just held.
"In fact, some of the questions were a little worrying because it appears that investors will put their hand out for as many shares as they can, irrespective of price, the dividend yield, or the growth prospects," she said.
The Government has passed legislation enabling it to sell up to 49 percent of four state-owned energy companies - Mighty River Power, Genesis, Solid Energy and Meridian - and Air New Zealand.
Shares in Mighty River Power are expected to be offered for sale in September.
The price is likely to be set at a level that will deliver a dividend similar to other comparable listed shares of about 4 percent, Fairfax has reported.
Ms Fisher said there was a sense of comfort with Government-owned assets.
The four energy companies were dominant in their sectors, they provided essential services and their businesses were reasonably predictable and stable, but investing in them was by no means a no brainer.
"SOE [state-owned enterprise] is not code for Government guaranteed, or money for jam," she said in the Sunday-Star Times.
The partial privatisations should be scrutinised like any other investment, she said.
NZN