@NewsroomNZ @bernardchickey Good comments today on radio today @bernardchickey RBNZ soft on pushing back on asset p… https://t.co/m0Sh7fohHG
7/12/2017 6:07 PM
@NewsroomNZ @bernardchickey Hard to lead with thinking based on incomplete model of the economy: inflation targetin… https://t.co/kDCAMJM1HV
7/12/2017 8:27 AM
RT @TheMinskys: Watch @StephanieKelton brilliantly explain why we should stop talking about the #deficit as a problem and start talking abo…
5/12/2017 8:08 PM
RT @TheMinskys: "Public-private partnerships conflate public and private interests, and in conflicts between them, the private interests wi…
26/11/2017 12:02 PM
RT @PolicyObsAUT: Is the NZ public service restructured too much? New Briefing Paper by Julienne Molineaux from @autuni https://t.co/BUISP…
26/11/2017 12:02 PM
RT @Ozlandscapes: #Lateline story on demise of Darling River, at hands of irrigated cotton, is yet another example of how money determines…
26/11/2017 11:58 AM
@mrmedina @Tat_Loo At best redundant. ..
25/11/2017 5:46 PM
@liamdann 2006 again?
22/11/2017 8:18 PM
RT @PolicyObsAUT: And now a report from Australia, saying high house prices are not linked to under-supply. Could policies supporting specu…
22/11/2017 8:46 AM
RT @FT: 'This really is the first time we see the news organisations coming together like this in order to address this crisis of trust in…
20/11/2017 12:20 PM
Recent Post Comments
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.

Print-friendly
28
JAN 11

Asset Sales




Happy New Year to all.

Is selling assets a good idea?

•We look to one of the longest standing, most successful, elites in the world – the English aristocracy, their strategy “don’t sell land– lease it” that way you hold onto stuff.
•If the asset gives a return at or above your weighted average cost of capital, don’t sell, particularly if there are some capital gain and inflation offsets along the way.
Are all assets the same?

•Let’s face it given the opportunity to buy into a monopoly or near monopoly, or an asset that can priced to leverage the selling price of production we would, or conversely you held it why would you sell it? Power generation fits this profile an airline does not.
Does the type of ownership influence the quality of governance and management of an asset?

•Maybe but there is no clear answer, assets in private hands are run badly and very well, the same applies to public ownership.
 

So a few conclusions:

•Without a good reason to sell don't, feeling you have to might say more about your state of mind on alternatives than the wisdom of selling.
•Unless you really, really have to, and it is hard to see why that would be the case on any asset that is providing a return above the weighted average cost of capital, there is no good reason countenance privatisation of a near monopoly, and see monopoly rents transferred from the public domain.
•Sell the all the airline but not the power companies.


tags: asset sales, asset sales, power companies, privatisation
I am sorry but this comment section has been disabled due to spam. My contact details are easy to find, please contact me if you want to comment or discuss anything on this blog.