Market close: NZ shares fall as Ebos shareholder sells down

A cornerstone investor of Ebos Group sold down a 9 per cent stake in the company. Photo / File

New Zealand shares fell as a cornerstone investor of Ebos Group sold down a 9 per cent stake in the healthcare products company, dominating trading today. Investors also remain concerned about the threat of a second wave of Covid-19.

The S&P/NZX 50 Index fell 25.88 points, or 0.2 per cent, to 11,132.58. Within the index, 33 stocks fell, 12 rose, and five were unchanged. Turnover was $800.5 million, of which Ebos accounted for $629.2m.

Ebos fell 3.2 per cent to $21.63 after its biggest shareholder sold 9.2 per cent of the company for $323m in a block trade.

Zuellig Group subsidiary Sybos sold 15 million Ebos shares in an underwritten block trade managed by Citigroup at $21.52 a share. Today almost 30 million shares changed hands, suggesting investors were taking advantage of the discounted share sale.

The size of the block trade meant some investors would also have needed to sell out of other companies to participate.

Meanwhile, the increased risk of a second wave of coronavirus appearing as economies reopen continued to weigh on investor sentiment, prompting some to crystallise gains in some stocks that have recovered from the sell-off in March.

"Some of these recovery stocks have been a pretty big leap of faith," said Greg Smith, head of research at Fat Prophets. "A bit of that money that has gone into recovery and growth stocks is probably coming out now, but investors still want to be in the market."

That profit was being funnelled straight back into the equity market given "ultra-low" interest rates and bond yields forced investors to find alternative assets to generate income.

"High-yielding names could go higher because it doesn't look like interest rates are going up in a hurry," Smith said.

Port of Tauranga fell 5.6 per cent to $7.64, leading the market lower on a light volume of 120,000 shares.

Refining NZ fell 3.7 per cent to 78 cents and Z Energy dropped 3.1 per cent to $2.80. Both stocks are faced with reduced demand for fuel as economic activity has slowed in the downturn.

Air New Zealand declined 2 per cent to $1.445 and Auckland International Airport fell 2 per cent to $6.45.

Outdoor retailer Kathmandu fell 1.6 per cent to $1.23 and Tourism Holdings dropped 1 per cent to $1.94.

Fisher & Paykel Healthcare posted the day's biggest gain, up 3.1 per cent at $30.25. The respirator manufacturer has been one of the few stocks to benefit during the pandemic, adding almost 38 per cent to its share price this year. Investors are keenly anticipating its annual earnings report next Monday.

Other heavyweight stocks also gained as investors sought reliable dividends. Meridian Energy rose 2.1 per cent to $4.95, Chorus increased 1.7 per cent to $7.60 and Spark New Zealand advanced 1.3 per cent to $4.435.

SkyCity Entertainment Group rose 2.6 per cent to $2.81. Smith said that while the stock was hit hard during the lockdown, its casino operations proved it was able to get back into "full swing" as restrictions eased.

Stride Property Group gained 3.1 per cent to $1.68 after it said it will maintain its dividend payment in the coming year. The property investor reported a 66.8 per cent decline in annual net profit, due to a reduction in the fair value of its property portfolio.