China-exposed ASX stocks under pressure after Beijing announces new e-commerce rules
Health & Biotech
Health & Biotech
Shares in ASX-listed companies with a China focus came under pressure after a new legal framework governing e-commerce was announced by Chinese authorities.
Infant formula stocks have been one of the best-performing ASX themes, on average doubling in value over the past year — thanks largely to greater regulatory stability in China.
But yesterday the big infant formula stocks lost ground over fears that might change.
Among infant formula makers, Bellamy’s was down almost 6% to $10.33, Bubs 5.5% to $0.68 and Wattle Health 4.7% to $1.21.
Blackmores, the vitamin maker with strong sales in China, was down 1.8% to $161.39.
a2 Milk, which was almost 1% higher at $11.61, says the legislative branch of the Chinese Government passed new law providing a framework for e-commerce.
“This framework is broad in scope and will apply in respect of all e-commerce activities, both domestic and cross border (CBEC),” says a2 in a statement to the ASX.
The new e-commerce law will come into effect from January 2019 and will cover e-commerce operators including registration of platform operators, contracts, dispute resolution and promotion.
Further implementation guidance is expected in the coming months.
Australian suppliers of infant formula are increasingly using online platforms to sell in China.
“The company’s business operates a flexible multi-channel multi-product strategy to best position the brand for growth,” says a2 Milk.
“The company will continue to work proactively with its partners to respond to the new e-commerce law and the yet to be released implementation guidance as appropriate.”