NZX 50 Takes a Tumble: Ebos Group Leads the Decline
The New Zealand stock market experienced a downturn on Monday, with the S&P/NZX 50 benchmark index falling by 0.68% to 13,141.54 points. A total of 27.1 million shares, valued at $98.1 million, were traded. The market saw more decliners (72) than gainers.
The primary driver of this decline was Ebos Group, a major player in the healthcare and animal care sectors. Ebos Group shares plummeted by 3.88% to $28.70, with trading volumes exceeding $6.1 million. This drop significantly impacted the overall performance of the NZX 50.
Why the Ebos Group Decline?
According to Paul Robertshawe, chief investment officer at Octagon Asset Management, Ebos Group's decline is attributed to an unwinding of gains following its inclusion in the ASX 200 index last week. The initial boost in demand due to this inclusion proved unsustainable.
"It was fundamentally weak heading into that forced buying," Robertshawe explained. "On the day people knew that was coming, they fed it out. And now we’re sort of back to: what’s the next announcement? Has it stabilised? Is it growing?"
Other Companies Affected
Robertshawe also noted that Tower and Chorus experienced similar effects from the index reshuffles, which resulted in over $500 million worth of shares being traded during Friday's closing session. Tower trimmed 1.14% to $1.73, and Chorus cut 1.48% to end the day on $9.29. Spark NZ, while rising 1.72% to $2.37, remains down nearly 20% for the year to date.
Vital Healthcare Bucks the Trend
In contrast to the general downward trend, Vital Healthcare, a healthcare-related building investor, saw its shares rise by 2.75% to $2.24. This increase was attributed to the company passing a liquidity test for FTSE index inclusion.
Share Sales and Holdings
The a2 Milk Company disclosed that its executive team had sold over $6 million worth of company shares to meet tax obligations. Managing director and chief executive David Bortolussi sold 242,345 shares as part of these on-market sales. Meanwhile, Harbour Asset Management increased its holding of Mainfreight to over 5%, according to a substantial product holder notice.
The a2 Milk Company’s shares traded almost flat at $9.58, while Mainfreight lost 1.84% to $63.00.