I came across this article courtesy of the SMH and thought it of interest.
The article does not make any direct or indirect reference to A2m but was just wondering if this might be a whiff of bad news brewing that someone at the big end of town had got a hold of and along with a bit of shorting used as an opportunity to push down the sp from $12.19 on 16/5 to $10.75 on 17/5 and then to $10.26 on Friday 18/5?
I don't believe it is a factor and even if it was it would only be transitory. Happy to hear other contributions re this and or the uncharacteristic fall in the share price of late.
Personally I believe that FY18 forecasts will be beaten, despite lowered "guidance" mid week and that FY19 will be a stellar year for A2M as marketing spend in FY18 and increased footprint in China and USA bears fruit (apologies for the mixed metaphor), expansion into South Korea, Singapore, New Zealand, new products (Stage 4 IF), and new product opportunities (butter, cheese), let alone mention strategic partnership with Fonterra, new markets in SE Asia, logistics and support...
Simmering political tensions between Australia and China since the start of the year had been largely ignored by investors until this week. Then concerns emerged that sharemarket darling Treasury Wine Estates's shipments were being held up by Chinese customs authorities as part of a retaliatory move against Australia.
For Treasury Wine, the initial belting its share price took this week was exacerbated by suggestions from some Chinese wholesalers that there is a glut in the market.
Treasury Wine Estates chief executive Michael Clarke suggested media reports of a glut were overblown.
Photo: Jesse Marlow
TWE chief executive Michael Clarke suggested the media reports on the issue were overblown and based on a couple of disgruntled wholesalers. And investment analysts clearly chose to believe the company.
While a wine glut is a company-specific issue, Clarke’s incidental commentary on "certain industries" experiencing a slowdown on clearance of imports to China has spurred wider commentary on the fallout for Australian exporters.
Business concerns about potential blowback emerged earlier this year when Prime Minister Malcolm Turnbull singled out China for public criticism about foreign interference.
Australian business leaders said Chinese officials had been furious that China had been singled out for criticism and used as a means to score domestic political points.
One chief executive with close China ties said he had no doubt the trade difficulties being experienced by some Australian exporters was a deliberate tactical move by China.
Julie Bishop hits back at former Australian ambassador to China, Geoff Raby, who claimed that relations with Beijing can only improve with the foreign minister's sacking.
One need go no further than James Packer’s Crown Resorts incident last year to see how devastating it can be to overstep the line with China. Several Crown employees in China were charged and jailed for gambling-related offences and the number of Chinese VIPs coming to Australia to gamble fell precipitously.
Businesses that export to China are loathe to have their names publicised on the issue - for fear of upsetting the Chinese. However, business has been more vocal about its dismay at the Australian government's diplomatic tactlessness earlier this year.
The chief executive of one major company that has extensive trade relationships with China said: "You can sense they [its Chinese business partner] are anything but happy. There is definitely an impact - it's a question of whether for China it’s annoyance or significant."
Another summed it up by saying, "it is not about whether the Australian government should or shouldn’t take a stand ... it’s how they do it".
Steve Ciobo's address was hailed as symbolic given China's unofficial freeze on visits by Australian government representatives.
Photo: Bloomberg
But this red-tape protest from China is now worrying Australian exporters, of not just wine, but packaged goods and potentially beef.
There are reports that the customs paperwork is being more heavily scrutinised for some Australian exporters. Others, like health food group Blackmores, say they have seen no evidence of this.
But industries such as meat exporters are complaining about missing opportunities and are frustrated at a surprise halt in a landmark deal to open up $500 million in new shipments.
The Minister for Trade, Tourism and Investment, Steve Ciobo, who is currently in China engaging in some damage repair, spoke at the AustCham Westpac Australia-China awards, praising the Middle Kingdom as a true global giant.
“Our relationship is mature, broad and anchored in respect for our respective histories and world view. A comprehensive commitment to ongoing dialogue is critical to maximising the benefits that flow to us both from our partnership," he said.
Whether Ciobo’s visit will thaw frosty Sino-Australian relations remains to be seen.
Of wider concern is the possibility that China could extend is tactics to tourism - one of our fastest-growing and most significant exports.
Last year, China decided to boycott South Korea’s tourism industry due to Seoul’s installation of an American anti-missile system. Chinese tourism numbers to South Korea fell by 60 per cent in a matter of months and Korean car sales to China also plummeted.
Airlines Qantas and Virgin Australia said on Friday there was no evidence tourism in Australia had been targeted.
Any such move would have a significant negative effect on the Australian economy.
A2M Price at posting:
$10.26 Sentiment: Hold Disclosure: Held
Julie Bishop hits back at former Australian ambassador to China, Geoff Raby, who claimed that relations with Beijing can only improve with the foreign minister's sacking.
(20min delay)
