A2 soars; Ebos slides on major stake sale
The S&P/NZX 50 Index rose 19.08 points, or 0.2 percent, to 10,892.24. Within the index, 12 stocks rose, 32 fell, and six were unchanged. Turnover was $558 million, of which Ebos accounted for $349.3 million.
A2 jumped 10.3 percent to $14.12, with 4.3 million shares changing hands, well up on its 90-day average of 730,000 shares. Chief executive Jayne Hrdlicka told shareholders that the company expects a wider operating margin than previously signalled, with better prices, lower costs, and favourable exchange rates all helping. The company had been sold off aggressively after disappointing investors when reporting its annual result in August.
Matt Goodson, managing director at Salt Funds Management, said the guidance was above expectations. The high volume of short positions in the stock - where investors borrow stock predicting its price will fall - also needed to be reversed.
That positioning was "quite thematic rather than looking at the hard metrics of A2, so some of the aggressive buying would have been short-covering," he said. "It certainly has been a polarising stock."
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