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  1. #1
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    Default New Goverment 2023, Company winners and losers

    A new government, presumably National / Act
    Which companies will benefit, which will suffer?

  2. #2
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    Looks like commercial property will suffer (more taxation), retirement village stocks may do okay (more taxation balanced out by high property prices and rent), the rest should prosper (more immigration, lower wages)?

  3. #3
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    Policy decisions could impact negatively or positively for listed companies in the short run. In the long run, only fundamentally sound strong balance sheet companies will create long term shareholder value. Other types of companies specially those who have mountain of debt are vulnerable to ever changing macro economy.

    IMO overvalued assets including stocks are vulnerable to a bigger drop. Why do we see inflation because everything has rocketed world-wide. People were bit happy when oil dropped from $120 to below $70. It helped to a cushion against inflation to some extent, but now oil’s back to $90s.I prefer to stay sidelines until I see great value in markets. It doesn’t mean there are no value stocks in global markets. Intelligent investors will continuously look for great companies trading at a fraction of their value. My second category is dividend champions with high yields.

    I consider other types of overvalued assets and stocks are very risky given the extended period of very high prices for assets. I don’t think they can control inflation using interest rates. Only way to control inflation is take action to bring down over valued assets. How can we expect increased purchasing power when there is an asset inflation. Asset inflation and wage inflation could lead to further increase in high cost of doing business. This could lead to rise in unempmloyment when comapnies cannot create jobs and when they start cuttinng jobs. I can see some industrial actions world wide as well. They are fighting for high salary or wages. When things such as housing, rent and other stuff unaffordable or overpriced we find vulnerable economies. On top of that we should not forget about the global debt explosion. It’s going to be a ripple effect. I am fearful more than before.
    Last edited by Valuegrowth; 16-09-2023 at 08:51 PM.

  4. #4
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    Quote Originally Posted by strikereureka View Post
    Looks like commercial property will suffer (more taxation), retirement village stocks may do okay (more taxation balanced out by high property prices and rent), the rest should prosper (more immigration, lower wages)?
    The further divergence in incomes and wealth, and the further development of a richer local landowner class supported by more immigration of workers from poorer countries (the further "Saudi Arabisation" of NZ) will probably mean more "Heliers" and eventually accommodation for the increasing numbers of non-home owning elderly. However a further deepening crisis in care will probably be needed before a National government would respond to non land-owners' needs.

    In NZ wealthier wealthy and more struggling lower paid, will no doubt result in more expensive land and houses as a tax efficient vehicle for the wealthy; any economic growth the result of higher immigration rather increasing productivity.
    Last edited by Bjauck; 17-09-2023 at 06:06 AM.

  5. #5
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    Agree with all that Bjauck ,& yes a shame that these issues are not being attended to by any parties before they become big problems but all business will prosper with an act national coalition I would say depending on how the recession goes we will see confidence Improve.
    And hopefully they will make improvements in things like the consent process for company's cutting out some unneeded red tape
    HA I like the Saudi Aribasation of nz terminology quite apt but a sad indictment on our society .

  6. #6
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    commercial building depreciation is being removed regardless of which party wins (both Labour & National has announced this). Possibility ACT opposes it but wouldn’t bet on it (personal tax cuts come first at the moment)

    My Guesses for results of a National/Act victory:
    - tax breaks introduced for build-to-rent developments
    - likely less red tape for building developments
    - eventually lower corporate tax rates
    - slightly higher inflation as tax cuts put more discretionary income into consumer pockets
    - longer term, less wage inflation for low wage industries (retail/fast food/supermarkets/tourism/cleaning services etc) as minimum wage increases will be non-existent/tiny under National/ACT, and also less costs associated with easier dismissals/trials etc.
    - higher unemployment, especially if 10,000+ civil servants are laid off, along with thousands more government contractors.
    - Wellington commercial building owners are going to suffer, also Wellington residential housing market collapses further, Ditto Wellington retail.
    - higher immigration combined with a lack of per capita funding increases for public infrastructure and services will be good for private health providers, private security firms, property developers building exclusive/gated communities.
    - no increase/cuts to benefits and mental health funding combined with stricter public housing rules (less tolerance for gang members etc) and the gutting of Kainga Ora will lead to even larger surge in crime. So good for private security related firms etc.
    - good for incumbent monopoly/duopolies (supermarkets, building suppliers, banks, etc) as regulation fear dissipates.
    - better opportunity for environmentally constrained industries. (Mining/oil/gas)
    Last edited by LaserEyeKiwi; 17-09-2023 at 10:10 AM.

  7. #7
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    Quote Originally Posted by LaserEyeKiwi View Post
    commercial building depreciation is being removed regardless of which party wins (both Labour & National has announced this). Possibility ACT opposes it but wouldn’t bet on it (personal tax cuts come first at the moment)

    My Guesses for results of a National/Act victory:
    - tax breaks introduced for build-to-rent developments
    - likely less red tape for building developments
    - eventually lower corporate tax rates
    - slightly higher inflation as tax cuts put more discretionary income into consumer pockets
    - longer term, less wage inflation for low wage industries (retail/fast food/supermarkets/tourism/cleaning services etc) as minimum wage increases will be non-existent/tiny under National/ACT, and also less costs associated with easier dismissals/trials etc.
    - higher unemployment, especially if 10,000+ civil servants are laid off, along with thousands more government contractors.
    - Wellington commercial building owners are going to suffer, also Wellington residential housing market collapses further, Ditto Wellington retail.
    - higher immigration combined with a lack of per capita funding increases for public infrastructure and services will be good for private health providers, private security firms, property developers building exclusive/gated communities.
    - no increase/cuts to benefits and mental health funding combined with stricter public housing rules (less tolerance for gang members etc) and the gutting of Kainga Ora will lead to even larger surge in crime. So good for private security related firms etc.
    - good for incumbent monopoly/duopolies (supermarkets, building suppliers, banks, etc) as regulation fear dissipates.
    - better opportunity for environmentally constrained industries. (Mining/oil/gas)
    It sounds like you found the real manifesto!

  8. #8
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    Thanks for your interesting take LEK. House prices will rise as National plan to reduce supply by selling stock to foreigners. They also plan to increase housing stock ownership by landlords. Both of those things increase house prices, disadvantaging the younger generations.
    Sacking public "servants" does FAG unless red tape is reduced. Sadly, National have a habit of bringing in their own regulations - their OTT AML Legislation comes to mind.
    The tax cuts might not be as inflationary as you think as they are planning on taking money from the poor (who spend it) and giving it to wealthier people, who tend to hoard it.

  9. #9
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    I'm seriously Hoping that NZ may kick the Woke Anti Resource Agenda into touch.

    And become more self sufficient with Energy.

    Why import cheap higher polluting Indonesian Coal when we have the World's Best Coal on the West Coast?? Even the British Navy rated it better than any other global coals back in the 1880's when they were firing up their Navy.

    Why Ban off shore Oil and Gas Exploration when we depend on these resources for our quality of life?

    Why make Gold extraction so difficult when the World Gold Council continues to publish data showing that Gold is being purchased in record amounts by nations all around the world (except NZ has got NZ$0 on our RBNZ Balance sheet)? The irony is that Gold was one of the reasons why Dunedin became so wealthy and kick started the localities we enjoy today. Mind you that includes the Coast, Coromandel etc etc etc...

    Why have no facility for refining energy when our domestic Supply Chain would come to a sickening halt if some Black Swan event impacted the Global refinery supply chain?

    Cheers
    Last edited by mistymountain; 17-09-2023 at 12:37 PM.

  10. #10
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    https://firstgas.co.nz/how-new-zeala...-world-leader/
    Quote Originally Posted by mistymountain View Post
    I'm seriously Hoping that NZ may kick the Woke Anti Resource Agenda into touch.

    And become more self sufficient with Energy.

    Why import cheap higher polluting Indonesian Coal when we have the World's Best Coal on the West Coast?? Even the British Navy rated it better than any other global coals back in the 1880's when they were firing up their Navy.

    Why Ban off shore Oil and Gas Exploration when we depend on these resources for our quality of life?

    Why make Gold extraction so difficult when the World Gold Council continues to publish data showing that Gold is being purchased in record amounts by nations all around the world (except NZ has got NZ$0 on our RBNZ Balance sheet)? The irony is that Gold was one of the reasons why Dunedin became so wealthy and kick started the localities we enjoy today. Mind you that includes the Coast, Coromandel etc etc etc...

    Why have no facility for refining energy when our domestic Supply Chain would come to a sickening halt if some Black Swan event impacted the Global refinery supply chain?

    Cheers

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