The stock value of Synlait Milk Ltd [NZX:SML] fell 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].
At the time of writing, Synlait has a market capitalisation of $1.74 billion and the share price is at $9.69.
A2 Milk is also down 3.49% at the time of writing, with a market capitalisation of $7.51 billion and share price sitting at $10.22.
Why has the Synlait Milk share price decreased today?
This morning, a disclosure notice was released for the sale of 1,020,755 shares by John William Penno, director of Synlait Milk.
This sell-off could be causing concern among investors.
A disclosure notice was also posted for a2 Milk, for UBS Group AG and its related bodies corporate ceasing to have a substantial holding.
There is 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.
This could be further contributing to the state of uncertainty for Synlait and a2 Milk shareholders.
So where could the Synlait Milk share price go from here?
Both the Synlait and a2 Milk share price have had strong growth over the last year, but in the current climate it has become volatile.
If Synlait and a2 Milk can recover from the mood of uncertainty, in the long-term the share price may be able to continue its growth trajectory.
Regards,
Taylor Kee,
Editor, Money Morning New Zealand