MARKET WRAP: Ebos deal dominates otherwise subdued sharemarket

The New Zealand market was flat today, following a strong return of 3.28% across June, and a 7.5% increase over the June quarter.

The S&P NZX 50 index was down 0.66 points to 8942.47, on light turnover of $100 million.

Harbour Asset Management analyst Shane Solly says global markets could remain volatile as investors anticipate the impact of US tariffs, and offsetting tariffs form US trade partners kick in later this week.

In New Zealand, the talk of the day was Ebos Group. The medical product provider inked a $A1 billion five-year supply deal with Australia’s Chemist Warehouse Group, which will take its annual sales to more than $NZ8.5b from July 1 next year.

Shareholders responded kindly to the news, with Ebos shares gaining 7.24% to 19.25.

Kathmandu shares also continued to rise after last week’s announcement that it expects net profit after tax to be in the range of $48-52m (up from $38m last year), for the year ended July 31, 2018.

Today its shares gained 1.72% to $2.96.

Goodman Property Trust shares gained 1.38% to $1.47. Mr Solly says the relative yield attraction of New Zealand property stocks is getting interest from investors. Last week the company advised the market that the sale of it's Central Park Corporate Centre has settled.

ANZ shares fell 2.07% to $30.35. The Australian bank’s share price remains “choppy” due to the ongoing Royal commission process, Mr Solly says.

Vista Group shares dropped 0.78%% to $3.80. Mr Solly says the shares seem to be “taking a breather” after a strong recent run after the cinema software provider announced it had signed a deal with Les Cinémas Pathé Gaumont, France’s largest cinema chain. Mr Solly says a lower New Zealand dollar may provide some support for the company’s earnings.

Gentrack Group shares dipped 1.54% to $7.01. Mr Solly says last weeks’ profit guidance was “not quite as strong as some investors expected”, and investors are reacting accordingly. The company announced to the exchange it expects EBITDA for FY18 to be in the range NZ$30m-$32m.

Mr Solly expects the market to remain quiet over an “interrupted week”. He says the closure of US markets during 4th of July celebrations will impact global markets along with the beginning of school holidays in New Zealand and Australia.

Tomorrow NZIER’s Quarterly Survey of Business Opinion will be revealed and on Wednesday QV’s New Zealand house prices will be revealed.

At the macro level, a number of important trading points will come out of the US on Friday, including payroll and trade balance figures.