NZ sharemarket dips on profit taking

The New Zealand sharemarket succumbed to some profit-taking, falling 1% after a strong run, and all eyes are on the prospect of Ebos Group making another billion-dollar purchase.

Thursday, November 16th 2023, 6:26PM

by BusinessDesk

The S&P/NZX 50 Index jumped to an intraday high of 11,391.21 but, by late morning, was on a downward slide as investors decided to take some welcome gains in selected stocks.

The index closed at 11,230.87, down 121.97 points or 1.07%, but is still ahead 0.8% for the week.

There were 61 gainers and 72 decliners over the whole market on volumes of 25.3 million share transactions worth $102.02m.

Utilities investor Infratil fell 43c or 4.06% to $10.17 despite reporting a strong half-year result.

Infratil traded as high as $10.74 and low as $10.12 during the day. Infratil’s revenue was up 54% to $1.46 billion, and net profit climbed 118% to $1.214b. It is paying an interim dividend of 7c a share on December 19.

Mainfreight was down $2.10 or 3.14% to $64.80; Contact Energy declined 13c to $7.77; Fisher & Paykel Healthcare shed 25c to $21.90; and Port of Tauranga decreased 7c to $5.41 after their recent rallies.

Jeremy Sullivan, investment adviser with Hamilton Hindin Greene, said: “Market sentiment has improved with some stocks up nicely, and it looks like there’s been some short-term profit-taking."

“We also saw a robust adjustment in the currency with the NZ dollar back under US60c after a 2.5% rise in the cross-rate,” Sullivan said. The Kiwi was trading at US59.80c against the American greenback.

Ebos moves

Ebos went into a trading halt after speculation it has an interest in buying Australian pet care and veterinary company Greencross, which operates Animates in NZ and has an overall valuation of $3.5b. Ebos last traded at $38.60.

Greencross is owned by American investment firm TPG Capital, AustralianSuper and Ontario Pension Plan. Greencross recently bought Melbourne-based Habitat Pet Supplies with five stores.

Ebos’ last big purchase was LifeHealthcare early last year for $1.2b. Mark Lister, investment director with Craigs Investment Partners, said Ebos has a history of acquiring other businesses and integrating them well into their own operations.

Some investors thought Ebos might be buying NZ-listed Green Cross Health, which had its biggest trading day in six months with 93,500 shares changing hands.

Green Cross was down 3c or 2.48% to $1.18. Global a2 Milk was up 9c or 2.22% to $4.15 after telling shareholders at the annual meeting it is on track to grow sales to $2b by the 2026 financial year and improve operating margin into the ‘teens’.

The property sector was weaker.

Precinct was down 4c or 3.38% to $1.145; Kiwi declined 3c or 3.49% to 83c; Stride fell 5c or 3.7% to $1.30; Property for Industry shed 4.5c or 2.01% to $2.195; Goodman Trust was down 3.5c to $2.12; and Investore decreased 2c to $1.12.

Investore, specialising in large format retail properties, reported steady half-year revenue of $30.37m and a net loss of $66.53m, driven by an $82.7m or 7.8% reduction in the value of its $1b portfolio. It is paying an interim dividend of 1.975c a share on December 12.

Wine exporter Delegat Group decreased 25c or 3.29% to $7.35 after downgrading its forecasts, with global case sales expected to decline 1.7% to 3.61m and net profit down to $57-$61m for the 2024 financial year. The previous guidance was $62-$67m.

Fellow exporter Foley Wines was down 4c or 3.23% to $1.20.

Millennium & Copthorne Hotels NZ, down 2c to $1.85, and sister company CDL Investment decreasing 1.5c or 1.88% to 78.5c, were both fined $50,000 by the NZ Markets Disciplinary Tribunal for breaching rules concerning the make-up of its audit committees between 2018 and 2020.

Other decliners were SkyCity, down 5c or 2.75% to $1.77, Serko, falling 14c or 3.08% to $4.41, and Scott Technology, shedding 10c or 2.9% to $3.35.

Tags: Market Close