No change good, change bad

Share market investors put their money on yesterday’s poll results:

The NZX 50 Index rose to a new record, following a global rally, paced by power companies after recent political polls put the government ahead, helping dispel fears the opposition parties will be able to overhaul the electricity sector. MightyRiverPower, Meridian Energy and Contact Energy rose.

The benchmark index rose 47.638 points, or 0.9 percent, to 5135.664. Within the index, 27 stocks rose, 12 fell and 11 were unchanged. Turnover was $167 million.

Better than expected US industrial production figures kicked off a global rally in equity markets which carried on into Asia. Hong Kong’s Hang Seng was up 0.5 percent in afternoon trading, Japan’s Nikkei 225 index advanced 1.4 percent and Australia’s S&P/ASX was up 0.5 percent.

Power companies paced today’s gains after a New Zealand Herald’s DigiPoll survey put the governing National Party at 50.8 percent support ahead of the September election. Labour, the main opposition party, garnered 29.5 percent. A key election policy of the opposition parties is to regulate the electricity market, creating a single state-owned wholesale electricity buyer. . .

“The electricity sector is up, and I’m going to put it down to the Herald DigiPoll results which were published, because they’re up across the board,” said Greg Easton, investment adviser at Craigs Investment Partners. “If there is no change in government, then that sector could really outperform after the election.” . . .

If no change in government good the obvious implication is that a change of government would be bad – and not just for energy companies and the stock market.

2 Responses to No change good, change bad

  1. Neil says:

    Exactly right HP. I am a stock investor tragic. I look at the indices for guidance 6 months down the track. Exactly the important time for the lead up to the election.
    Watch MRP as an indicator of any shift in political opinion – they are part of the power sector that Labour are going to change. Positive movements in MRP mean sentiment running against the left

    Like

  2. Neil says:

    Sorry – MRP is Mighty River Power

    Like

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