Sharebrokers involved in the Mighty River Power partial float are restricted by regulations and cannot make comment on the float or, as it turned out yesterday, on most of Mr Hughes' claims.
But those contacted by the Otago Daily Times were angry Mr Hughes had taken the debate to a personal level when they were unable to fight back.
Mr Hughes said the Government produced a list of six companies that had spoken out recently against the Green and Labour parties' plans to implement a Pharmac-style model to drive down electricity prices for households and a business called NZ Power, which would be a single buyer of electricity.
All of those companies had a current or future financial interest in National's privatisation programme, he said.
''Forsyth Barr and First NZ Capital are directly involved in the sale of state-owned assets. Their profits are directly related to the successful sale of state-owned assets. The higher the sale price of Mighty River Power, the higher the commissions these companies make,'' Mr Hughes said.
One person prepared to speak out was Forsyth Barr managing director Neil Paviour-Smith.
''We appreciate the statement is likely to be in response to publicity about the research report from our analyst Andrew Harvey-Green which considered the potential impact of the NZ Power policy statements from the Labour and Green parties. ''This was a significant announcement. It's our job to condense that into objective analysis we can provide to our clients who invest in these companies, irrespective of what the prevailing government policy is. So it's wrong to say that pure self-interest is driving our analysis of their policy,'' Mr Paviour-Smith said.
Mr Hughes said it was predictable the companies profiting from the asset sales programme were the same ones attacking the policy. Self-interest was driving the criticism of the Green and Labour plan to lower power prices for every New Zealand household by about $300 a year.
''These companies should declare their obvious vested interest so that the public can make up their own mind on our initiative,'' he said.
Wanaka fund manager Greg Marshall, of Logic Fund Management, said a lot of emotional debate had sprung up from the combined statements of the Green and Labour parties.
No-one could point to any electricity regulation regime globally that provided that balance between consumer protection and correct incentives for investment in long-term generation, transmission and distribution assets.
However, the Labour-Green proposal would hinder the unregulated monopoly that existed in electricity retail and would bring New Zealand closer to better allocation of capital for investment in marginal production capacity, he said.
''As the devil will be in the detail, it is difficult to predict with any certainty the impact on cash flows for the industry. Any such regulatory regime would typically take three to five years to impact, so short-term cash flows would not be affected.''
Of wider concern for capital markets was the signal that a Labour-Green alliance was likely to be interventionist, Mr Marshall said. The results in the past had been mixed, expensive to implement and that would lead to a reduction of returns across several sectors.
The consumer would benefit from lower electricity prices, due to better bargaining power against the generators. That would also facilitate more competition among generators, including marginal suppliers, such as independent solar and wind-power suppliers, who would achieve better price transparency.
New generation would be tendered to the most efficient operator/producer, he said.
''Currently transmission and distribution prices for electricity are regulated. There is little incentive at the retailer for regulation-driven price declines to be passed on to consumers.''
The key impact of the Labour-Green plan would be a reduction in revenue for electricity generator retailers, including Mighty River Power, Mr Marshall said.
Logic Funds had reduced its target valuation of Mighty River Power to $1.90 to $2.20 a share, based on the discounted cash flow model. The Government set a price target for the partial float of $2.35 to $2.80 a share.
If appropriately discounted for the risk, Mighty River Power shares appeared to be good buying, as there would be significant upside should National return to office at the next election, he said.
Logic estimated that implementation of the Labour-Green plan would wipe up to 25% off Mighty River Power's operating profit.
The list
Full list of companies known to be engaged by The Treasury in the asset sales programme: First NZ Capital, Credit Suisse Australia, Macquarie Capital New Zealand, Goldman Sachs New Zealand, UBS New Zealand, Forsyth Barr, Merrill Lynch, Deutsche Bank, Craigs Investment Partners, Bell Gully, Chapman Tripp, Russell McVeagh, Simpson Grierson.
Source: Green Party
