New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Thematic (Sector/Industry)

<ul><li>May 2025 saw a shift from dry winter concerns to upcoming political and regulatory decisions, with a Methanex gas deal and moderate rainfall alleviating winter 2025 risks.</li><li>The Ministerial Review and Energy Competition Task Force are anticipated to prompt changes, though they may not significantly impact company valuations.</li><li>Mercury (MCY) remains the preferred investment, trading at a discount relative to its history and peers, with the sector showing resilience despite potential challenges in winter 2026.</li></ul>

May 2025 saw a shift from dry winter concerns to upcoming political and regulatory decisions, with a Methanex gas deal and moderate rainfall alleviating winter 2025 risks.The Ministerial Review and Energy Competition Task Force are anticipated to prompt changes, though they may not significantly impact company valuations.Mercury (MCY) remains the preferred investment, trading at a discount relative to its history and peers, with the sector showing resilience despite potential challenges in winter 2026.

Power Points Water Worries Washed Away—June 2025

<ul><li>Hydrology remains a concern, with storage levels improving slightly, but Meridian Energy faced another challenging month.</li><li>The electricity sector offers defensive earnings and dividend growth, with Mercury rated as OUTPERFORM while others remain NEUTRAL.</li><li>The Commerce Commission is expected to make an announcement on Contact Energy's proposed takeover of Manawa Energy by 9 May 2025, with a positive decision anticipated.</li></ul>

Hydrology remains a concern, with storage levels improving slightly, but Meridian Energy faced another challenging month.The electricity sector offers defensive earnings and dividend growth, with Mercury rated as OUTPERFORM while others remain NEUTRAL.The Commerce Commission is expected to make an announcement on Contact Energy's proposed takeover of Manawa Energy by 9 May 2025, with a positive decision anticipated.

Power Points Hydro Holding Pattern—May 2025

<ul><li>The backdrop for the sector conference, Downstream 2025, was the ongoing political and regulatory fallout from record-high winter 2024 prices and current worryingly low hydro lake levels.</li><li>The general conference consensus was that limited gas supply—which has not yet been fully replaced by new generation—is the main cause of the current challenges.</li><li>Nevertheless, political and regulatory risk is currently heightened, and the conference underlined that there will be changes to the market coming. </li></ul>

The backdrop for the sector conference, Downstream 2025, was the ongoing political and regulatory fallout from record-high winter 2024 prices and current worryingly low hydro lake levels.The general conference consensus was that limited gas supply—which has not yet been fully replaced by new generation—is the main cause of the current challenges.Nevertheless, political and regulatory risk is currently heightened, and the conference underlined that there will be changes to the market coming. 

Electricity Sector - Upstream Problematic Downstream

<ul><li>Submissions on the Commerce Commission's (ComCom) Statement of Issues (SoI) reinforce our view that, on paper, Contact Energy's (CEN) acquisition of Manawa Energy (MNW) passes the legal test for clearance.</li><li>However, negative sector sentiment remains a strong headwind. We still see a 50/50 chance whether the acquisition is cleared.</li><li>The ComCom's next move will be critical. If it publishes a Statement of Unresolved Issues (SoUI), the chances of the acquisition clearing diminishes.</li></ul>

Submissions on the Commerce Commission's (ComCom) Statement of Issues (SoI) reinforce our view that, on paper, Contact Energy's (CEN) acquisition of Manawa Energy (MNW) passes the legal test for clearance.However, negative sector sentiment remains a strong headwind. We still see a 50/50 chance whether the acquisition is cleared.The ComCom's next move will be critical. If it publishes a Statement of Unresolved Issues (SoUI), the chances of the acquisition clearing diminishes.

<ul><li>Recent share price declines have increased the sector’s attractiveness, particularly Meridian Energy (MEL), which we upgrade to OUTPERFORM.</li><li>The sector is resilient to economic downturns and trade wars, offering both growth and a strong dividend yield. 2025 has started with unprecedented low hydro inflows, particularly in the South Island, where storage has fallen -37% since late 2024.</li><li>South Island inflows are the lowest since records started being kept and North Island inflows are not far behind. </li></ul>

Recent share price declines have increased the sector’s attractiveness, particularly Meridian Energy (MEL), which we upgrade to OUTPERFORM.The sector is resilient to economic downturns and trade wars, offering both growth and a strong dividend yield. 2025 has started with unprecedented low hydro inflows, particularly in the South Island, where storage has fallen -37% since late 2024.South Island inflows are the lowest since records started being kept and North Island inflows are not far behind. 

Power Points - Getting Very Thirsty—March 2025

New Zealand

Contact Energy Limited is a diversified and integrated energy company which focuses on the generation of electricity and the sale of electricity and gas in New Zealand.

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Contact Energy (CEN NZ)

Power Points Water Worries Washed Away—June 2025

May 2025 saw a shift from dry winter concerns to upcoming political and regulatory decisions, with a Methanex gas deal and moderate rainfall...

Forsyth Barr

Power Points Hydro Holding Pattern—May 2025

The Commerce Commission is expected to make an announcement on Contact Energy's proposed takeover of Manawa Energy by 9 May 2025, with a positive...

Forsyth Barr

Electricity Sector - Upstream Problematic Downstream

The backdrop for the sector conference, Downstream 2025, was the ongoing political and regulatory fallout from record-high winter 2024 prices and...

Forsyth Barr

Electricity Sector - Your Move ComCom

The ComCom's next move will be critical. If it publishes a Statement of Unresolved Issues (SoUI), the chances of the acquisition clearing diminishes.

Forsyth Barr

Power Points - Getting Very Thirsty—March 2025

Recent share price declines have increased the sector’s attractiveness, particularly Meridian Energy (MEL), which we upgrade to OUTPERFORM.

Forsyth Barr

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