It is possible for most New Zealanders to own shares in the state-owned assets being partially sold down, but it comes down to lifestyle choices, Craigs Investment Partners broker Chris Timms says.
Mr Timms yesterday took issue with Green Party co-leader Metiria Turei saying only the wealthy, who had received expensive tax cuts from National, would be in a position to buy shares.
However, Mr Timms said it came down to what New Zealanders saw as priorities in their lives.
If someone was smoking a packet of cigarettes a day at say $15 a pack, that cost them $5800 a year - tax paid.
By cutting back to six packs a week, instead of seven, that would give enough money to buy a minimum $1000 parcel of shares.
"You can save money, be healthier and buy some shares. Not only that, you can earn money off your investment through dividends and potentially participate in some upside to the share values."
Also, with a jug of beer costing an average of $10, wine from a supermarket costing around $10 on special, Sky Television with a sports and movie package costing nearly $100 a month, and takeaways costing between $20 and $30 a week for some families, there was plenty of room to trim costs and afford shares, Mr Timms said.
"Buying shares is the same as saving," he said.
Ms Turei, from Dunedin, challenged Prime Minister John Key to say exactly how many "ordinary" New Zealanders he expected would buy shares under the partial asset sales programme.
Her challenge came after Mr Key reportedly said the "typical family" had an income of $80,000 to $90,000" and there would be many people who would be able to buy the $1000 minimum parcel of shares.
"Kiwi families do not have thousands of dollars sitting around to buy shares in the companies they already own," she said.
Statistics New Zealand data showed the median household income was $67,000 - half of families had incomes less than that amount - and the median household had $1700 in the bank.
The household savings rate was 1% of disposable income, or around $600 a year.
With low wage rises and continuing job losses, families were finding it hard to make ends meet, let alone save enough to invest in the sharemarket, Ms Turei said.
According to the MP, Treasury documents showed banks had been told to expect up to 250,000 retail investors which, Ms Turei said, implied that at least 93% of New Zealanders would not buy shares in the company.
"Mr Key must confirm Treasury's figures showing that only a well-off 7% of New Zealanders would buy shares in his asset sales - or explain where the millions of Kiwis on middle and low incomes are going to find the money to buy back what already belongs to them," she said.
Craigs head of private wealth research Mark Lister said earlier this week private investors might find it hard to get "big licks" of shares in the state-owned energy companies because of intense interest.
Mighty River Power is expected to be partially listed in September or October, followed next year by Genesis, Meridian and perhaps coal producer Solid Energy. The Government also intends to further sell down its stake in Air New Zealand.
The Government would keep a minimum stake of 51% in each company and expects to raise between $5 billion and $7 billion from the partial floats.
Mr Lister said interest in the shares was very strong, although there were questions over how much people would be able to invest.
"I don't think people are going to put their hand up and say 'well, I want $100,000 worth' and get it easily. They're going to be pared back, so people are going to have to think about a strategy of getting some via this initial process and then maybe look to buy some on the market further on."
The Government is facing a tight deadline with its plan to have shares available by September. While legislation allowing the partial sale was passed last week, Minister for State Owned Enterprises Tony Ryall said commercial work, including the process of selecting the syndicate of sharebrokers and banks that would market and sell the shares to New Zealanders, had been under way for some time.
Mighty River will complete its June accounts so investors can properly assess the firm's value.
Once that information is published in offer documents, the shares will be sold through a book build. That means that, after setting an indicative price range, the managers of the sale will accept bids for shares from institutional investors such as KiwiSaver and other retirement funds in a process similar to a tender or auction.
The process will set the price of shares for retail investors, who will apply to buy shares from a public pool held aside.
