Ebos, Fletcher earnings drive NZX 50 higher

New Zealand’s S&P/NZX 50 index was one of the stronger performers across Asia for a second day, with investors impressed by results from Ebos Group and Fletcher Building and heavyweight companies keeping the benchmark in positive territory.

Turners Automotive Group dropped near a nine-month low after warning that the protracted Middle East conflict had dented demand, with tougher trading conditions squeezing auto margins for longer than anticipated.

Meanwhile, My Food Bag told investors it expects to reveal the outcome of its strategic review by the time it reports first-half earnings in November, as Tony Carter chaired his final annual meeting of the food-kit company.

And the NZX announced former New Zealand Superannuation Fund head of direct investments Hishaam Mirza will take over the reins as chief executive next month.

Regional winner

The NZX 50 climbed 63.59 points, or 0.5%, to 13,929.67, with 17 stocks gaining, 27 declining and six unchanged. The S&P/NZX 20 index futures contract for September advanced 0.9% to 7,792 with 95 lots traded for a value of about $730,000, while the NZX 20 increased 0.7% to 7,851.34.

Turnover across the main board was $129.8 million, of which Fisher & Paykel Healthcare accounted for $14.4 million as the country’s biggest listed company rose 0.6% to $42.50.

New Zealand’s NZX 50 was a standout across Asia, with elevated fears about the inflationary impact from the Middle East conflict and increased bond issuance fuelling the artificial intelligence infrastructure buildout adding uncertainty to global markets, with yields on long-term government bonds touching multi-decade highs.

Japan’s Nikkei 225 index dropped 2.9% in late trading and South Korea’s Kospi sank 5.3%, while Australia’s S&P/ASX 200 index was down a more modest 0.2%.

“The long end of bond markets is really starting to concern the markets, with interest rates having an integral part to play in valuing a business,” said Peter McIntyre, an investment adviser at Craigs Investment Partners.

Ebos led the NZX 50 higher, jumping 8% to $23.55 after reporting a 5% lift in underlying earnings and keeping its dividend unchanged, while projecting an uplift in the coming year after completing an upgrade of its distribution centres.

McIntyre said Ebos’s result was in line with guidance, but that its 2027 forecast provided investors more confidence, with a full return to growth slated for the 2028 year.

A revival in demand for healthcare stocks on both sides of the Tasman added another tailwind for the company, he said.

Building back better

Fletcher gained 6.2% to $3.97 as the building materials firm delivered earnings in line with guidance and avoided any surprises that have disappointed investors in recent years.

Michael Sherrock, head of equities at Amova Asset Management, said Fletcher’s earnings were roughly in line with expectations.

“It’s basically a much cleaner result versus previous years and no major disappointments versus previous years where there have been issues in one or another of their divisions,” Sherrock said in a note.

Power companies were broadly stronger on the day, with Mercury NZ gaining 2.1% to $6.95, Genesis Energy advancing 1.1% to $2.69, Meridian Energy up 0.9% at $5.65 and Contact Energy increasing 0.2% to $9.

Spark New Zealand was the most heavily traded stock on the day with a volume of 4.2 million shares as the telecommunications company gained 3.3% to $2.02.

Turners Auto posted the steepest decline on the NZX 50, falling 5.6% to $7.78, its lowest level since December. The auto firm told shareholders at today’s annual meeting that the Middle East conflict and rising fuel prices had made trading conditions tougher, although it was still sticking with its target of posting pre-tax profit of $65 million in the March year.

The a2 Milk Co fell 3.6% to $8.23, while SkyCity Entertainment Group dropped 3.3% to 59 cents.

Fonterra Shareholders’ Fund units dipped 0.3% to $6.98 after milk prices rose at the latest Global Dairy Trade auction. Outside the benchmark, Synlait Milk increased 1.3% to 40.5 cents.

The NZX was unchanged at $1.48 after the stock market operator announced former NZ Super executive Hishaam Mirza as its new chief executive, starting on Sept 14. Mirza will continue with the stock market operator’s growth strategy to lift performance of both the NZX and the broader capital markets.

My Food Bag jumped 6.8% to 23.5 cents as the company said revenue was up 4.5% in the first four months of the financial year, and said it expected to keep gross margins in line with the prior period when it reports its first-half result.

Seeka was unchanged at $2.84 after saying Mark Dewdney would step down as chair, while staying a director, on Aug 20 to manage his various governance roles, including the chair of Tatua Dairy Cooperative.

And the kiwi dollar traded at 58.73 US cents at 5pm in Auckland from 58.80 cents yesterday after Statistics New Zealand figures showed the prices paid by producers for goods and services in the June quarter rose at a faster pace than the prices they received.

The New Zealand dollar rose to 83.02 Australian cents from 82.84 cents yesterday after Reserve Bank of Australia deputy governor Andrew Hauser warned interest rates would need to rise if inflation pressures crystallise into higher prices across the Tasman.

Reporting by Paul McBeth. Image from Curious news.