The a2 Milk Company Ltd’s stock value has declined by 2.36% today.
The company exclusively owns and licences intellectual property for the production of a2 milk products. It has a strong presence on both the Australian and New Zealand stock exchanges.
At the time of writing, the company has a market capitalisation of $9.44 billion and the share price is at $12.85.
Why has [NZX:ATM] share price decreased today?
The recent jitters are linked to the controversy raging over Chinese telecommunications giant Huawei.
As part of the Five Eyes intelligence network, New Zealand has followed the lead of its Western allies, restricting Huawei from participating in Spark’s planned 5G rollout in the country.
This has led to a diplomatic backlash from China, which has put the pressure on New Zealand trade and tourism.
So where could the a2 Milk share price go from here?
Despite strong growth in Chinese exports over the last year, the recent tensions have caused volatility to the a2 Milk share price.
In the short term, this volatility could lead to further negative spikes.
However, as cooler heads prevail in diplomatic circles, it is hoped that the share price will stabilise and return to its former growth in the long-term. Prime Minister Jacinda Ardern has indicated a compromise with Huawei is possible, pending further investigations.
For more information on a2 Milk, please read our recent articles on the company:
- Milking China: A Kiwi Conundrum
- A2 Milk: Cash Cow or Spoilt Milk?
Editor, Money Morning New Zealand