The a2 Milk Company Ltd [NZX:ATM] Share Price Dips Over 2%

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?

Regards,

Taylor Kee,
Editor, Money Morning New Zealand

PS: New Zealand has already benefited as China lifted nearly a billion people out of extreme poverty. Now it’s set to boom again as middle-class incomes continue to rise. In our latest FREE research report, we identify three investments ready to soar on the back of China’s rise. Download your free report here with all the details.

 

 


Taylor Kee is the lead Editor at Money Morning NZ. With a background in the financial publishing industry, Taylor knows how simple, yet difficult investing can be. He has worked with a range of assets classes, and with some of the world’s most thought-provoking financial writers, including Bill Bonner, Dan Denning, Doug Casey, and more. But he’s found his niche in macroeconomics and the excitement of technology investments. And Taylor is looking forward to the opportunity to share his thoughts on where New Zealand’s economy is going next and the opportunities it presents. Taylor shares these ideas with Money Morning NZ readers each day.


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