MENU

Why A2 Milk Company Ltd (ASX:A2M) and Bellamy’s Australia Ltd (ASX:BAL) shares are surging higher

The A2 Milk Company Ltd (ASX: A2M) share price and Bellamy’s Australia Ltd (ASX: BAL) share price have been among the best performers on the market on Thursday.

In early afternoon trade the a2 Milk Company share price is up almost 9% and the Bellamy’s share price is 5.5% higher.

The Blackmores Limited (ASX: BKL) share price is also climbing notably higher and is up 5% at the time of writing.

Why are these shares racing higher today?

Investors have responded positively to news out of China in relation to tough new e-commerce laws.

According to the Chinese government website, the State Council has decided not to implement new e-commerce laws on January 1 and will instead refine its existing policies.

There had been concerns that these new laws could have impacted the sales of exporters like a2 Milk, Bellamy’s, and Blackmores.

What is happening on January 1 now?

From January 1 the Chinese government will extend the current Cross Border E-Commerce (CBEC) policy framework. This means that imported items will continue to be viewed as “Personal Use” items and will not require registration or first import licence approval.

In addition to this, tax benefits and transaction limits remain favourable. According to a note out of Goldman Sachs, imported items through the CBEC channel will continue to enjoy tax benefits and the personal transaction limit will increase to RMB5000 from RMB2000 for a single transaction and to RMB26K from RMB20K for the annual limit.

Below is a quick summary of the changes.

Source: Goldman Sachs

Is this good news?

I believe this is a big positive for companies exporting to China and takes that element of doubt out of the equation. Because of this, I can’t say I’m surprised to see the shares of a2 Milk, Bellamy’s, and Blackmores surge higher today.

I felt a2 Milk Company and Bellamy’s were buys prior today, but this news just sweetens the deal now in my opinion.

Finally, here are three more growth shares that I think could be great options as well in 2019.

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool’s Top 3 Blue Chip Stocks for 2019."

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.