Fonterra Shareholders' Fund units rallied when they came off a trading halt yesterday after tests of some of its whey products proved they did not contain botulism-causing bacteria.
The units shot up by 24c to $7.12 early in the session after the announcement from the Ministry for Primary Industries that tests for the offending bacteria had come back negative. At that price, the units were level with where they traded before the contamination news first broke on August 3. By the close they had dropped back to $7.05 - up 17c.
The initial rise in the units probably reflected relief after concerns about the product proved to be ill-founded.
Later, investor appetite for the units waned on the realisation that big changes might lie ahead for Fonterra, and the industry as a whole, as a result of the scare, said one sharemarket analyst.
"We have tended to take the view that it [Fonterra] is fairly fully priced up here," said Matt Goodson, managing director at Salt Funds Management. "This debacle has been far more important for the country, rather than the [unit] price."