Stocks will benefit / suffer from a Labour government?

[JeremyALD]

Who do you think will benefit / suffer from government policies?

Personally I think a drop in migration will impact aged care services. I also think potential house initiatives will impact house prices and possibly retirement stocks. Hospitality industries could also suffer with a drop in migration. AU banks may suffer somewhat as well as Z Energy.

I think construction companies may benefit, alongside selective healthcare services.

Your thoughts? Will be an interesting one to watch.

[Zaphod]

It's really hard to tell until all the committees building Labour's policies report back.

[bull....]

on limited info so far exporters should be big winners , retirement stocks maybe suffer from immigration pullback and having to pay more min wage. as zap says need more policy detail

[trader_jackson]

Will be an interesting one to watch...

Currently a hard question to answer, and it may be for some months, as no policy has really been detailed, other than apparently immigration will be cut to 20-30k (however I don't think this will hit retirement stocks as much as people think)

Exporters will benefit 'immediately' and I think interest rates will start to go up (due to labour throwing more money around, among other things) which could impact the housing market.

Slightly scary times right now.

[Scrunch]

Who do you think will benefit / suffer from government policies?

Personally I think a drop in migration will impact aged care services. I also think potential house initiatives will impact house prices and possibly retirement stocks. Hospitality industries could also suffer with a drop in migration. AU banks may suffer somewhat as well as Z Energy.

I think construction companies may benefit, alongside selective healthcare services.

Your thoughts? Will be an interesting one to watch.

If the dollar stays down then stocks with overseas earnings will see a small lift in the NZD value of those profits. This could help companies like EBO and MHJ, although if negative sentiment pulls all stocks down, it may just minimize the size of the fall.

Companies that still manufacture in NZ and sell overseas will do well if they manage to retain some of the pricing gain directly as an increased margin or more indirectly as increased sales. This could helps companies like SKL but won't help those that have shifted manufacturing offshore FPH.

[percy]

Benefit.....Exporters,retailers,tourism,banks,fina nce companies,vehicle/equipment sellers.
Struggle.....SKY TV paying more for programing,outward bound travel suppliers,and airlines.Freight companies will be hit by higher priced fuel,as will farmers.We will all pay more for imported goods.

[Jonboyz]

What do you think winston meant by his comments on “capitalism”? Increase in company taxes, CGT?

[trader_jackson]

What do you think winston meant by his comments on “capitalism”? Increase in company taxes, CGT?

He wanted to cut company tax in his election campaign, not sure on CGT

[Lewylewylewy]

Traders will be happy tomorrow because of the volatility, and anyone looking to top up. I imagine a lot of stocks will drop then recover a little.

Property stock will do poorly. Couta will like the buying opportunities. It might take a while for people to become comfortable enough to raise PE if Labour don't damage the property market.

I suspect we will see some poorly thought out, far left social policy happening, that will increase NZs exposure to risk (mainly negative social effects, but also financial).

Hopefully they won't damage the property market, make everyone poor, and damage the economy. I suspect they won't, but it's a risk.

The market will probably take some time to acclimatise to new risks.

... Is my guess.

[hardt]

Winnie seems to be big on corporate welfare...

He has stated a need for a reduction in corporate tax rate to 25%
+ Reduction of the tax rate for income generated through exports to 20%
+ If 2% of revenues are used for RnD - Big tax credits are provided
Also, the NZD remaining this low will provide further bottom line growth for foreign operations

ATM, FPH, CBL, TGH, THL, SML, ABA, PEB - will all be benefiting from these possible changes ( 80% of my portfolio )

I am rather optimistic about the future for the market.... the reaction in the coming weeks will provide plenty of buying opportunities.

Everyone will soon realise 99.9% of the listed companies are not likely to be materially impacted by this.

Anyone have any thoughts on what the NZDX is going to look like?

[Absolute144]

Depends - stocks which export, the drop in NZD vs USD will mean the exchange rate more favourable. Very high risk stocks probably not affected at all - because theres far more at play than who your government is. Other stocks im not sure, May depend on number of low wage employees, foreign workers, how much of your value is property etc.

[value_investor]

I also have to say depends but mainly because we are acting on speculation still. Not a lot of policy is known and an awful lot of work will have to go in before anything is implemented, especially before the end of the year.

In the meantime, I suspect some shares will drop following on from the results but will recover quickly and it will be a good time to buy in if you are a long term investor looking to buy great companies at fair prices. The way things have gone on recently has made it difficult to find bargains.

Will this stop the bull market from continuing on? Its hard to say yes sincerely to that considering the markets are much more resilient than they ever have been.

[Bjauck]

Hopefully they won't damage the property market...As far as first home buyers, people upsizing and many renters are concerned the residential property market has already been allowed to become well “damaged” especially in Auckland. NZ has the most unaffordable housing market.

[drcjp]

What do you think winston meant by his comments on “capitalism”? Increase in company taxes, CGT?

He meant nothing at all. The guy was talking rubbish as usual. His only concern was baubles and Ministerial positions for his useless bunch of coat-tailers. The silver lining is that he is not up for Finance.

I'm predicting an election driven market correction of a decent size.

[bull....]

He meant nothing at all. The guy was talking rubbish as usual. His only concern was baubles and Ministerial positions for his useless bunch of coat-tailers. The silver lining is that he is not up for Finance.

I'm predicting an election driven market correction of a decent size.

im expecting a knee jerk reaction offer nice buying be short lived.

nz dollar drop exellent for exporters

[trader_jackson]

I am hoping a fee stocks go on sale today and hopefully continue till Tuesday or Wednesday next weej, don't think the sale will last long (Good sales never do) and I hardly think things will crash.

[fish]

I am hoping a fee stocks go on sale today and hopefully continue till Tuesday or Wednesday next weej, don't think the sale will last long (Good sales never do) and I hardly think things will crash.

I agree thats how it should happen if the market stays rational.
Fear might cause some panic selling so will be watching the market closely

[Lewylewylewy]

Do you think that labor will introduce a cgt on property?

[Carpenterjoe]

Reckon, Orion.

[drcjp]

Do you think that labor will introduce a cgt on property?

I'd say its a certainty. Question is, how backdated will it be? I wouldn't put it past them to try apply it to purchases up to 5 yrs old.

[Zaphod]

He wanted to cut company tax in his election campaign, not sure on CGT

After much pressing by the media, Jacinda stated there would be not CGT until at least 2020.

As for the company tax comment, I think that related to a crack-down on large international corporates using structures to avoid paying NZ tax.

[winner69]

As has been seen globally on many occasions over many years political events (both local and geo) are just noise.

At the end of the day company fundamentals win out .....not what’s happening today on the political front.





That advice for ‘investors’ - traders love these times because they can take short term punts on investor sentiment and make zillions.

[gbogo]

Do you think that labor will introduce a cgt on property?

National introduced a CGT on property already. It's called the bright line test. new govt may extend it from two years to maybe three or five.

[RTM]

MMH. They are a major focus point should the process to move the port...or at least some portion of it, from Auckland to Whangarei gets underway.

[whatsup]

I would not buy anything for l 30 days until the needs/demands of this govt are more fully understood, Im picking a 5% drop today at least.

[whatsup]

The average Joe will suffer as with uncertainty the $ will ( some say has already ) drop which will push up the costs of imports and then interest rates will rise and hurt all families with decent mortgages .

[fungus pudding]

Will be an interesting one to watch...

Currently a hard question to answer, and it may be for some months, as no policy has really been detailed, other than apparently immigration will be cut to 20-30k (however I don't think this will hit retirement stocks as much as people think)

Exporters will benefit 'immediately' and I think interest rates will start to go up (due to labour throwing more money around, among other things) which could impact the housing market.

Slightly scary times right now.

Certainly sounds inflationary to me. Especially if Winston keeps talking doom and gloom on the economy. Interest rate rise coming, and big problems building 200 houses a week when immigration numbers reduced. Where are the tradesmen coming from? Several conflicting polices. Certainly won't be plain sailing.

[King1212]

Certainly sounds inflationary to me. Especially if Winston keeps talking doom and gloom on the economy. Interest rate rise coming, and big problems building 200 houses a week when immigration numbers reduced. Where are the tradesmen coming from? Several conflicting polices. Certainly won't be plain sailing.

one solution...keep borrowing and giving out....go Labour!!!

[winner69]

Populous won’t be too impressed when petrol hits $2.20 litre

Winnie already has said ‘Don’t blame me’

[hardt]

Tell me who comes to mind when I say "Protectionist, Nationalist, pro export and manufacturing, anti establishment, anti-immigration and a big spender that will lead us into higher interest rates "
I remember how the market saw this as an omen for all of 10 hours and never looked back.

Not nearly as big a disaster as people think, have more faith in the New Zealand you know and love as opposed to the one you are picturing in your head without much detail.

Either way, I am going to lose thousands of dollars today and will be ready to snap up some bargains

[artemis]

Certainly sounds inflationary to me. Especially if Winston keeps talking doom and gloom on the economy. Interest rate rise coming, and big problems building 200 houses a week when immigration numbers reduced. Where are the tradesmen coming from? Several conflicting polices. Certainly won't be plain sailing.

We have tradies in the family and hire several regularly. They are all super busy, with delays even for us as good and long term customers. Two firms who used to advertise stopped a year or more ago, can't cope with new customers.

Watching Kiwibuild with interest LOL.

[bull....]

retirement stocks hammered not a surprise with min wage going up and property market not going anywhere

[bull....]

exporters look like are taking off , guess the dollar going to 68c fairly quick

[fungus pudding]

retirement stocks hammered not a surprise with min wage going up and property market not going anywhere

Surprises me. Property replacement prices must rise, with increase in cost of all imported materials, and building labour costs. Inflation higher than we've seen for decades, and while that means higher operating costs, it will also mean higher residents' fees.

[Snoopy]

Who do you think will benefit / suffer from government policies?


The power retailers must be smiling at the prospect of 'power grants' to low income earners over winter.

SNOOPY

[Valuegrowth]

At some point there will be bear market. The world stocks markets which include NZ market are overvalued. There will be next bear market at the end of the current bull market. This is the time look for value opportunities. It is very scary to see extended P/E ratios in global markets.

[couta1]

At some point there will be bear market. The world stocks markets which include NZ market are overvalued. There will be next bear market at the end of the current bull market. This is the time look for value opportunities. It is very scary to see extended P/E ratios in global markets. Not all stocks on the NZ market are overvalued and their PE ratios are not extended.

[Valuegrowth]

Thanks couta1. It may be good time to look for out of favour value stocks. Am I right?

[Valuegrowth]

exporters look like are taking off , guess the dollar going to 68c fairly quick

Exporters should benefit specially value stocks.

[Sgt Pepper]

Surprises me. Property replacement prices must rise, with increase in cost of all imported materials, and building labour costs. Inflation higher than we've seen for decades, and while that means higher operating costs, it will also mean higher residents' fees.

"Inflation higher than we've seen for decades"
Really??

[axe]

retirement stocks hammered not a surprise with min wage going up and property market not going anywhere

How will the $NZD vs $AUD work with revaluations to the villages in ozzie for Rymans?

[Balance]

Surprises me. Property replacement prices must rise, with increase in cost of all imported materials, and building labour costs. Inflation higher than we've seen for decades, and while that means higher operating costs, it will also mean higher residents' fees.

Eh - low inflation and we have had the most profound increases in property prices in NZ - ever.

It is all about speculative investment cycle which is now trending downwards.

[Zaphod]

"Inflation higher than we've seen for decades"
Really??

Perhaps FP means going forward. Labour's proposed fiscal stimulus package is vast and inflationary, and Winston's focus on reforming the RBNZ to take into account other measures such as employment will also have a profound effect.

[horus1]

There will changes in energy. This gov6t will not be as friendly to the gentailers as the last.

[Beagle]

We have tradies in the family and hire several regularly. They are all super busy, with delays even for us as good and long term customers. Two firms who used to advertise stopped a year or more ago, can't cope with new customers.

Watching Kiwibuild with interest LOL.

Agree its a joke. If they think they can build houses cheaply in Auckland Labour are delusional thinking they can do something highly experienced property developers cannot. Maybe they plan to use Russian 3D printer technology and build new slums, ahem, opps sorry, houses that way ? https://readwrite.com/2017/10/09/apis-cor-international-expansion/

[Balance]

Agree its a joke. If they think they can build houses cheaply in Auckland Labour are delusional thinking they can do something highly experienced property developers cannot. Maybe they plan to use Russian 3D printer technology and build new slums, ahem, opps sorry, houses that way ? https://readwrite.com/2017/10/09/apis-cor-international-expansion/

Go over to Singapore and observe how a properly structured government entity (HDB) can utilise economies of scale, fast track planning and building consent process to build affordable quality homes for 75% of its population!

Tradesmen like to have long term contracts with customers who can pay and pay on time - I know because two of my contacts are scale home builders & their tradesmen have been with them for decades.

Kiwibank and Cullen Fund simply will not succeed if you believe the National Party, remember?

[hey_homes]

Highly experienced property developers are perfectly capable of building slums on their own.

[Balance]

Highly experienced property developers are perfectly capable of building slums on their own.

Yup - just come to Auckland's Stonefields suburb built by Fletcher Residential and stand in awe of the rectangular block apartments (no architectural merit whatsoever) selling for over $750k for a 2 bedroom.

Compare that with a place like Singapore which has to import everything (except land) and a 5 room ultra modern apartment with all the modern conveniences is built and sold to its citizens for less than $500k.

[hey_homes]

Not to mention half the apartment buildings in the CBD. Although I suppose the Council is at least partly to blame for letting it happen.

[Balance]

Not to mention half the apartment buildings in the CBD. Although I suppose the Council is at least partly to blame for letting it happen.

Agreed - complete and utter disgrace that the apartments were built and allowed to be built.

Go over to Scene 1, 2 and 3 apartment blocks on Quay St in Auckland observe the leasehold apartments deteriorating into slums month by month as owners/landlords get hit by ever increasing corporate management fees and leasehold ground rent. Initial buyers lost over 50% of their monies so far.

[tipsy]

Agreed - complete and utter disgrace that the apartments were built and allowed to be built.

Go over to Scene 1, 2 and 3 apartment blocks on Quay St in Auckland observe the leasehold apartments deteriorating into slums month by month as owners/landlords get hit by ever increasing corporate management fees and leasehold ground rent. Initial buyers lost over 50% of their monies so far.

Such ugly looking buildings, lease is renewed every 3yrs, people struggling to give them away.

[Beagle]

Yup - just come to Auckland's Stonefields suburb built by Fletcher Residential and stand in awe of the rectangular block apartments (no architectural merit whatsoever) selling for over $750k for a 2 bedroom.

Compare that with a place like Singapore which has to import everything (except land) and a 5 room ultra modern apartment with all the modern conveniences is built and sold to its citizens for less than $500k.

Maybe so in Singapore but we don't live there. The cosy duopoly supply most of the "super cheap" building products here, you think that might have an impact on construction costs. The other thing is even at $750K for a small piece of FBU's "architectural masterpiece" FBU's B&I division are making "so much money" their tradies are going on strike lol. It'll be interesting to see what latest wizardry the new CEO tries to bestow on the problem child division but with so many staff that don't understand the fundamental's, (not just tradies, I'm talking about the hundreds of middle management on hundreds of thousands of dollars each) its hard to see any merit in riding on that heavily handicapped horse.

[Balance]

Such ugly looking buildings, lease is renewed every 3yrs, people struggling to give them away.

Yup - I know of an overseas buyer who bought a 2 bedroom for $600,000 off the plans and sold it a few years later for $240,000.

Now you can buy the same freaking apartment for less than $200k because the body corporate cost has gone from zero to over $15k p.a!

Point is that NZ government has had a completely hands off approach towards housing and it's been a screw up of monumental proportion.

New government can do better and there are companies which will benefit from government intervention.

[Snow Leopard]

...Compare that with a place like Singapore which has to import everything (except land)...

You sure about that?

Look at a land reclamation map of Singapore and then ask them where it all came from.

Beach Road is now more than 1km from the 'beach', and that is the least of it.

[Balance]

Yup - I know of an overseas buyer who bought a 2 bedroom for $600,000 off the plans and sold it a few years later for $240,000.

Now you can buy the same freaking apartment for less than $200k because the body corporate cost has gone from zero to over $15k p.a!

Point is that NZ government has had a completely hands off approach towards housing and it's been a screw up of monumental proportion.

New government can do better and there are companies which will benefit from government intervention.

https://www.bayleys.co.nz/1650730

$139,000 and it's yours, along with $16k (and rising every 3 years) of annual body corporate costs, leasehold rent and rates!

What a freaking disaster!

[Beagle]

https://www.bayleys.co.nz/1650730

$139,000 and it's yours, along with $16k (and rising every 3 years) of annual body corporate costs, leasehold rent and rates!

What a freaking disaster!

Thanks for the listing link, very interesting. Sure is a complete unmitigated disaster for the original investors but on the other hand now, for a young couple starting out who both work in the city and who want nice northeast sunny views and access to the facilities and who can walk to work it might be the perfect start ! People who claim they cannot get on the property ladder need to think outside the square box it could legitimately be said. Staggers me though for that body corporate the gym membership isn't included in the price...

[Balance]

You sure about that?

Look at a land reclamation map of Singapore and then ask them where it all came from.

Beach Road is now more than 1km from the 'beach', and that is the least of it.

You mean like Auckland's reclaimed container port, Beach Rd & Quay St?

I assume you mean Singapore imports the sand and dirt from neighboring countries - I thought they level all the hills in Singapore and dredge sand from the seabed for most of the fill?

[Balance]

Sure is for the original investors but on the other hand for a young couple starting out who both work in the city and who want nice northeast sunny views and access to the facilities... People who claim they cannot get on the property ladder need to think outside the square box it could legitimately be said.
Staggers me though for that body corporate the gym membership isn't included in the price...

And watch the body corporate and ground rent costs increase relentlessly every 3 years, negating any capital gains potential and in some leasehold situations (eg.Cornwall Park), bankrupting the unfortunate property owners?

No thanks!

[Beagle]

And watch the body corporate and ground rent costs increase relentlessly every 3 years, negating any capital gains potential and in some leasehold situations (eg.Cornwall Park), bankrupting the unfortunate property owners?

No thanks!

Agree those costs only go one way and it isn't down but for a couple of twenty somethings earning reasonable bucks its quite possibly a good opportunity as their wages will increase as their careers develop. Not too shabby north east facing sunny views, you'd have to concede that and its cheep cheep like a budgie :) Disc: The hound isn't tempted by the "so called" 10% net return because when, (not if), you get a lengthy period of property vacancy the body corp and other costs mean your real return over the years is considerably lower than that.

I am curious, if this isn't the bottom for that sort of apartment where do you think this bottom's out mate ? $100K ?

[Zaphod]

" A full-scale review into retail power pricing"

Sounds exciting for those of us invested in the gentailers.

[Balance]

Agree those costs only go one way and it isn't down but for a couple of twenty somethings earning reasonable bucks its quite possibly a good opportunity as their wages will increase as their careers develop. Not too shabby north east facing sunny views, you'd have to concede that and its cheep cheep like a budgie :) Disc: The hound isn't tempted by the "so called" 10% net return because when, (not if), you get a lengthy period of property vacancy the body corp and other costs mean your real return over the years is considerably lower than that.

I am curious, if this isn't the bottom for that sort of apartment where do you think this bottom's out mate ? $100K ?

If you are interested, there is a leasehold property in One Tree Hill (Cornwall Park) for sale at $1,000.

Catch - ground rent is currently $45,000 and review in 2 years - likely to be $100,000.

[Beagle]

If you are interested, there is a leasehold property in One Tree Hill (Cornwall Park) for sale at $1,000.

Catch - ground rent is currently $45,000 and review in 2 years - likely to be $100,000.

LOL I see your point but those reviews were every 21 years so there's obviously been a massive shock at some stage whereas in this case at least with a 3 yearly review a young couple have a chance to budget for it as their salaries go up. I also wouldn't underestimate the advantage for a young person /. couple not needing a car in town which is a massive annual saving and a massive saving on commute time too. They think differently mate, happy to walk further and take Uber when they need a ride further afield and save mega bucks on car ownership and can walk home when they're drunk...

[Balance]

LOL I see your point but those reviews were every 21 years so there's obviously been a massive shock at some stage whereas in this case at least with a 3 yearly review a young couple have a chance to budget for it as their salaries go up. I also wouldn't underestimate the advantage for a young person /. couple not needing a car in town which is a massive annual saving and a massive saving on commute time too. They think differently mate, happy to walk further and take Uber when they need a ride further afield and save mega bucks on car ownership and can walk home when they're drunk...

A little off-topic from looking at stocks but the young couple might as well rent the apartment then.

$700 per week = $36,400 a year less costs assumed by landlord of $16,000 = $20,000 a year.

The property is not going to appreciate so the $139,000 they pay will cover 7 years of rent.

Remember that a leaseholder in NZ cannot walk away from most of the residential leases in place in NZ - you are stuck for eternity unless you can find someone to buy off you.

With Labour's policy of kiwibuild homes, there is a better opportunity to buy cheaper homes soon enough.

I personally will not write off FBU as a beneficiary just yet - let's see what tomorrow brings.

[Beagle]

Yeah probably overdue to sheet this discussion back to shares. I think while its quite possible that the targeted 10,000 new homes a year may benefit FBU the bloated and arguably inept management of the company provide a very heavy enduring handicap for that horse even if the ground underfoot is a little firmer. On the other hand if the new CEO were to take some drastic measures to clean out vast amounts of overpaid dead wood there might be grounds for believing they might perform better in the future but that still leaves it as a cyclical company trading on a PE well north of 10 so it won't be getting any backing from this hounds money.

[Zaphod]

Agree those costs only go one way and it isn't down but for a couple of twenty somethings earning reasonable bucks its quite possibly a good opportunity as their wages will increase as their careers develop. Not too shabby north east facing sunny views, you'd have to concede that and its cheep cheep like a budgie :)

Sorry but I have to disagree. The shadow created by the 50m high gold statue due to be erected in former POA land of Winston reaching for the stars will have a profound impact on views, sun and noise levels as leagues of worshipers gather for the hourly prayer sessions.

[Lewylewylewy]

I've just worked out that since I started investing 4 years ago, I've managed to achieve an average 115% increase per year, each year on my money. Now we're going to be having Labour pains I'm down a few grand so far :(

I anticipate losing about 11% this year. I'm half considering this year to be the one I fully dip out of all my investments and go into something with a guaranteed ROI. #ReallyNotHappyAboutThis #BeingLegallyAllowedToSmokeDopeIsNotAdequateCompen sation

Maybe I view it as a good thing, sell out and have a pot of money waiting to buy the low. I really wish we could have just had more of the same, like most of the country voted for. Stupid MMP, why have a system designed to give the largest minority party all the power?!

#VentingJustIgnoreMe

[Beagle]

Sorry but I have to disagree. The shadow created by the 50m high gold statue due to be erected in former POA land of Winston reaching for the stars will have a profound impact on views, sun and noise levels as leagues of worshipers gather for the hourly prayer sessions.

LOL good one.

Understand how you feel LLL.

[Clints]

Sorry but I have to disagree. The shadow created by the 50m high gold statue due to be erected in former POA land of Winston reaching for the stars will have a profound impact on views, sun and noise levels as leagues of worshipers gather for the hourly prayer sessions.

:) not entirely sure I would call 7% "leagues of worshipers"

Also for those of you that haven't heard it.

BREAKING NEWS: All Blacks lose the Rugby Championship as Australia, South Africa and Argentina combine their points and become coalition winners.

[pierre]

Also for those of you that haven't heard it.

BREAKING NEWS: All Blacks lose the Rugby Championship as Australia, South Africa and Argentina combine their points and become coalition winners.

Haha - love it. Not sure Steve Hansen will be so delighted at this news though!

[meltical]

Haha - love it. Not sure Steve Hansen will be so delighted at this news though!

Could be the start of the apocalypse, don't lose your biscuit ;)

[Bjauck]

:) not entirely sure I would call 7% "leagues of worshipers"

Also for those of you that haven't heard it.

BREAKING NEWS: All Blacks lose the Rugby Championship as Australia, South Africa and Argentina combine their points and become coalition winners.LOL. Napoleon (Peters) has deposed Farmer Jones (English)...

[whatsup]

LOL. Napoleon (Peters) has deposed Farmer Jones (English)...

Bj, Don't you mean W@nker Win$ton !!

[Leftfield]

Back to topic........ can't help thinking RBC (and Arbogen (http://www.arborgen.com)) is going to be 'well positioned' to benefit from all the forestry planting planned by the new coalition govt.

Disc - Holding and topping up at 19c.