John123
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John123 in Gainers & Losers,

SYUT 17% surge after China announced two-child policy looks excessive

Shares for maker of powdered infant and adult formula products Synutra International Inc. (SYUT) skyrocketed nearly 17% after China's ruling Communist Party said it will allow all couples to have two children after decades of a strict one-child policy.

The announcement comes at a time when sales for baby food and milk formula companies have weakened due to China's economic slowdown and its campaigns to promote breastfeeding. Global prices for whole milk powder fell in July to levels not seen since 2009, according to the U.S. Department of Agriculture.

But no baby boom is not expected to be forthcoming soon as small families are an engrained part of Chinese culture and adding more children is too expensive for many.

An easing of policy in late 2013, allowing couples to have a second child in situations where one spouse was only child has only had a minor impact. As of June, only 1.5 million of the 11 million eligible couples had applied for second child.

At the close SYUT was only up 5%. I think a gap on daily chart will be closed today.