NZX 50 stumbles as Ebos Group continues tough fortnight – Market close

Ebos Group surprised the market to the downside. Photo / Getty Images

The New Zealand benchmark index has erased half of its gains from Monday as Ebos Group fell below $30 for the first time since 2021.

The benchmark S&P/NZX 50 lost 0.21% to 13,253.73 points on Tuesday, with 38.4 million shares worth $128.5 million changing hands.

After nearly reaching $43 last month, Ebos Group continued the losses that began when it reported its earnings in late August, falling 2.22% to $29.97.

Mohandeep Singh, senior research analyst at Craigs Investment Partners, said he was surprised by the stock’s tumble over recent weeks, suggesting Ebos may have been a victim of its own success.

“This is a business that has very few times in recent memory surprised the market to the downside. It is a perennial meeter and beater of expectations,” Singh said.

“Maybe the market was pricing in some strong growth forever, because it’s always seemed to have delivered it. And now there’s a bit of a resetting of expectations.”

Singh said a change in management may have compounded downside momentum.

Infratil and energy

Like the index, Infratil reversed the gains it made earlier in the week and fell 1.69% to $12.19.

Citigroup initiated coverage of the infrastructure investor with a “buy” rating on Friday, which Singh said “reflects that Infratil is now becoming a sizeable constituent in the Australian index”.

Large trading volumes passed through energy stocks, with Contact Energy leading the way with over $11m in value traded.

The stock sank 0.22% to $9.13, while Meridian Energy lost 2.04% to $5.75.

Mercury NZ, which also traded on elevated volumes, dipped 0.3% to $6.74, and Genesis Energy rose 0.42% to $2.40.

Over the weekend, eight members of OPEC+ agreed to raise oil production from October by 137,000 barrels per day, an event cited by international media as a reason for energy stock moves.

Because the New Zealand energy market is predominantly renewable, Singh said the listed gentailers have less exposure to oil prices than their international counterparts.

He said the move in Meridian was more likely related to investors cashing in on recent gains.

“It’s added 30-odd cents since late August. It’s probably just a little bit of profit-taking from its recent strength.”

The rest

KMD Brands was one of the largest decliners, losing 5.56% to 25.5 cents.

In an investor note on Monday ahead of KMD’s full-year result later this month, Forsyth Barr analysts Paul Koraua and Rohan Koreman-Smit rated the stock at “neutral”. They have set a one-year target price of 37 cents.

Briscoe Group, which gained 1.25% to $5.69, will report its half-year results on Wednesday.

In other news, an announcement from Oceania, saying its chief legal officer Claire Fisher had resigned, was followed a couple of hours later by one from Stride Property, saying it had hired her.

Fisher has been appointed as the general manager of corporate services at Stride and will officially start in November.

Stride’s shares were up 0.78% at $1.29 and Oceania’s jumped 1.43% to 71 cents.

Sticking with retirement companies, Summerset Group’s shares lifted 1.55% to $11.11 while Ryman Healthcare traded flat at $2.56.