Vector starts off in right direction

Vector chairman Michael Stiassny, left, and chief executive Mark Franklin rejoice as NZX head Mark Weldon watches. Picture / Glenn Jeffrey

Vector has been welcomed with open arms on to the stock exchange, with memories of court battles and intrigue swept to one side.

Despite an initial 30 per cent surge in the share price, market watchers were relaxed about the opening day's trading in Vector shares, with volumes enough to ensure liquidity but not so high as to indicate huge profit-taking from new retail shareholders.

The most shares any income beneficiary (assuming they were neither a capital bondholder nor a NGC shareholder) was issued in the float was 1322.

At an issue price of $2.38 each, the price soared more than 31 per cent in opening trades, before settling down to $3.02 at the close.

At Vector's Newmarket headquarters, company chairman Michael Stiassny made a point of thanking the two Auckland Energy Consumer Trust members, Warren Kyd and Karen Sherry, who were instrumental in the float going ahead.

The float and purchase of NGC has caused a rift within the trust, with High Court action last year barring former Vector director John Collinge from voting on the deal.

Kyd did not envisage any major problems existing between the trust, as 75.1 per cent owner, and the new shareholders of the remaining quarter.

NGC, with all its shares to be compulsorily acquired, will be delisted from the stock exchange within weeks.

The IPO raised $592.6 million, with 249 million new shares issued and less than 3 per cent changing hands yesterday.

Macquarie Equities investment director Arthur Lim said there were clear signs of interest from institutional investors.

He also said it did not seem that large numbers of retail investors were selling.

"What we saw today was, to me, fairly obvious institutional trading," he said, with brokers supplying decent volumes of Vector shares into the market.

"It's a good debut, considering that for all intents and purposes, NGC has been the proxy by which investors have been buying and selling Vector shares since the takeover notice was announced back in June."

With a new listing of this size for a firm of this quality, a first-day turnover of up to 10 per cent of all shares could be expected.

But this did not happen, possibly a sign that new retail shareholders might not be so quick to sell out, as had happened with previous privatisation at Auckland International Airport and Contact Energy.

Andrew South, of fund manager Brook Asset Management, said the market debut for Vector had gone as expected. Brook said it expected to be the largest of the new Vector shareholders but would not say what percentage of the company it owns.

"There seems to have been plenty of good two-way business," said South. It was not surprising, since Vector shares had effectively been trading under the NGC banner for some time.