Shares that may win or lose depending on result


THIS weekend’s election result is set to shape the immediate fortunes of several Australian shares and sectors.

While elections rarely cause overall sharemarket swings, individual stocks can surge or tumble depending on who wins government.

Whether it’s the business-friendly Coalition or the environment-focused Labor, there will be winners and losers — and if you want to make money you’ll have to put aside your own political ideas and think like an investor.

• How the election will hit your hip pocket

• Clock ticking for property investors

Midsec managing partner Nick Loxton said some sectors might benefit no matter what party won.

Both Labor and the Coalition have promised tax cuts, which will flow through to consumers, and an infrastructure boost.

“With the promise of big spending in infrastructure, construction and engineering may do well,” he said.

Labor’s large health spend would help some healthcare stocks, Mr Loxton said, but its plan to cap health insurance premium rises would put pressure on health insurers.

“Investors would do well by not altering anything before the detail of any legislation is known,” he said.

AMP Capital head of investment strategy Shane Oliver said Labor’s focus on increasing taxes for real estate investors would mean that if it lost, there could be a relief rally among financial services and property-related companies.

“But if there is a Labor victory, they might be seen to be more tough in response to the royal commission,” he said.

Dr Oliver said history had shown that since World War Two, Australia’s sharemarket’s average annual returns had been higher under Liberal (12.7 per cent) than Labor (10.7 per cent).

“However, Labor got whacked by the GFC so maybe that’s a bit unfair,” he said.

Chris Conway, a senior investment adviser at investors’ newsletter Marcus Today, said Australian investors focused more on individual policies than who was in power.

“I think even the political parties themselves would admit that they have some similarities,” he said.

If Labor succeeds in axing franking credit cash refunds, this could draw investors to stocks that pay high incomes but don’t attach franking credits, such as Sydney Airport and Transurban.

And if Labor’s green energy push goes ahead, there’s a wide range of renewable energy and clean-technology companies listed on the ASX that might benefit, including Roto-Gro, EnviroSuite, Rectifier Technologies and RedFlow Energy Storage Systems.

However, many of these are valued at less than $100 million and carry more risk than large companies.

“Liberal is considered to be more business-friendly in terms of helping the banks and big institutions,” Mr Conway said.

“The expectation is they won’t win. If they do, you might see a pop in the market.”

WHO WINS IN THE ELECTION WASH-UP?

WINNERS

If Labor wins:

• Health (Ramsay, Sonic Healthcare)

• Renewable energy (AGL, Infigen)

• Discretionary retail (JB Hifi, Harvey Norman)

If the Coalition wins:

• Housing-related (Banks, CSR)

• Infrastructure (Transurban, Sydney Airport)

• Construction/development (Boral, Lend Lease)`

LOSERS

If Labor wins:

• Property (Mirvac, Stockland, CSR)

• High dividend payers (Telstra, big banks)

• Health insurers (Medibank, Bupa)

• Financial services (Mortgage lenders, AMP)

If the Coalition wins:

• Renewable energy

• Clean technology



Source link Finance News Australia

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