Synlait Milk Share Price Lifts by 3.59%

 

The stock value for Synlait Milk Ltd [NZX:SML] rose by over 3% today.

Synlait Milk holds the exclusive rights as the manufacturer of the popular dairy product for The a2 Milk Company [NZX:ATM]. Both companies cooperate heavily on exports to China. As a result, the success and performance of the two stocks are closely aligned.

At the time of writing, Synlait has a market capitalisation of $1.55 billion and the share price is at $8.65.

A2 Milk is also up 2.26% at the time of writing, with a market capitalisation of $7.64 billion, and the share price is sitting at $10.40.

 

Why has the [NZX:SML] share price increased today?

In September and October, both Synlait and a2 Milk were plagued by negative publicity. This was the result of sudden stock sell-offs by company executives such as a2 CEO Jayne Hrdlicka.

There was also the ongoing secondary issue of the new regulatory environment that China intends to enforce for cross-border e-commerce (CEBC). From 1 January 2019 onwards, Kiwi exporters will be required to adhere to higher quality standards when selling and distributing their products in China.

All of this contributed to a state of uncertainty for Synlait and a2 Milk shareholders.

However, presently, these fears have eased as the operating environment has stabilised.

 

So where could the Synlait Milk share price go from here?

The moment of volatility appears to have passed, and Synlait has resumed the positive growth they have experienced over the past year.

We anticipate that the long-term share price may be able to continue its upward trajectory.

 

 

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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