Ebos move gives prices a shot in the arm

Ebos Group, Australasia’s largest distributor of healthcare and medical products, energised the New Zealand sharemarket with its move into a prestigious MSCI World Index. The S&P/NZX50 Index traded cautiously but rallied late in the day after news came through that Ebos, up 90c or 2.07 per cent to $44.45, will be added to the MSCI World Large Cap Index at the end of this month, moving from the small cap index.

The NZX index closed at 12,178.76, up 60.09 points or 0.5 per cent and finished the week almost flat.

There were 62 gainers and 71 decliners over the whole market on volume of 31.2 million shares worth $131.39 million. The trading was dominated by Ebos with $27.22m worth of its shares changing hands.

Shane Solly, portfolio manager with Harbour Asset Management, said the MSCI inclusion meant that Ebos was likely to attract increased activity from global investment funds.

“Ebos did spike at $46.30 (on January 17) and the inclusion may have been anticipated by some but it doesn’t go into the index until after the close of trading on February 28.” The MSCI Large Cap index has 675 constituents representing 23 global markets and covers 70 per cent of market capitalisation in each country. Ebos joins the likes of Fisher & Paykel Healthcare, Auckland International Airport, Spark, Meridian and Mercury Energy in the index.

Argosy Property, down 1c to $1.13, will be removed from the MSCI Small Cap Index, but Precinct Properties survived the cull and jumped 7c or 5.6 per cent to $1.32.

Solly said the local market was a little cautious just before the latest reporting season, and one of the first points of interest next week will be how Vulcan Steel, Fletcher Building, Steel & Tube and to a lesser extent Skellerup Holdings are performing.

Retirement village operators had a positive day, with Ryman Healthcare up 8c to $6.33; Summerset Group gaining 16c to $9.98; and Arvida Group increasing 2c or 1.75 per cent to $1.16.

Solly said there have been reports that unit sales are holding up better than expected and though settlements are slower, they are not any worse than before.

“People are still driven by the need and requirement to have care and this is not stopping them moving into retirement villages,” he said.

Mainfreight was up 40c to $75; Contact Energy gained 6c to $7.78; Vector picked up

5c to $4.30; Freightways increased 18c or

1.91 per cent to $9.60; Skellerup added 9c to $5.44; Chorus collected 11c to $8.56; and

climbed 8c or 2.99 per cent to $2.76.