How to get rich from Keir Starmer in Number 10

Under the bi-line ‘Anticipating the threats and opportunities of a Labour government is key to making your money go further’ the Telegraph has run a piece on ways they believe you could benefit from the new Government.

It can be seen here (subscription may be necessary) and says that the election of Sir Keir Starmer as Prime Minister of the UK brings significant implications for investors, highlighting the impact government actions can have on share prices. Historical examples illustrate this well, such as the 16% drop in Tencent’s share price following the Chinese government’s restrictions on gaming incentives, and the 34% fall in Trainline’s share price when faced with new competition from a government-backed app.

Sectors at Risk

  1. Energy Companies: Energy firms, particularly those in oil, gas, and renewables, could face increased regulation and windfall taxes. Labour’s past actions, such as the windfall tax on energy companies during the Ukraine conflict, exemplify the risks these sectors face from government interventions​ (UK Parliament)​.
  2. Privatised Utilities: Water companies and other privatised utilities are likely targets for increased regulation and potential windfall taxes. Labour’s commitment to addressing issues within these sectors suggests heightened scrutiny and financial impositions could be on the horizon​ (Big Issue)​.
  3. Health and Lifestyle: Companies related to health, such as tobacco, alcohol, and producers of unhealthy foods, might face more stringent regulations. Labour’s approach to health policy, focusing on prevention over treatment, indicates potential challenges for these sectors​ (UK Parliament)​.

Sectors That Could Benefit

  1. Green and Renewable Energy: Companies involved in environmental improvement and green energy could benefit from Labour’s support for net zero initiatives and environmental policies. Investment trusts like Greencoat UK Wind, JLEN Environmental Assets, and Impax Environmental Markets are well-positioned to gain from such policies​ (Big Issue)​.
  2. Housebuilding: The housebuilding sector is set to receive a boost from Labour’s pledge to build 1.5 million homes over the next parliament. The focus on brownfield developments, supported by potential grants, could spur growth in this sector​ (Big Issue)​.

Less Affected Sectors

  1. Niche and Global Companies: Smaller companies and those operating in niche markets or internationally are less likely to be impacted by domestic political changes. Examples include:
    • Relx: Provides data and research services globally, reducing its exposure to UK-specific regulatory risks.
    • Spirax-Sarco: Specializes in steam systems and operates internationally, minimizing potential impacts from UK government actions.
    • Judges Scientific: Designs and produces scientific instruments, largely operating below the political radar​ (Big Issue)​.

Market Outlook

Historically, the FTSE All-Share index has shown a preference for Conservative governments, but investors might not react negatively to Labour’s victory under Starmer. Labour’s moderate stance, including the decision not to raise corporation tax and a cautious approach to fiscal policies following the lessons from “Trussonomics,” should help maintain investor confidence​ (UK Parliament)​​ (Big Issue)​.

In summary, while certain sectors like energy and privatised utilities may face increased risks from government actions, other sectors such as green energy and housebuilding might benefit. Investors are advised to consider the potential regulatory environment and seek opportunities in less politically sensitive sectors or international markets to mitigate risks

SEARCH

YOU MAY ALSO LIKE

CATEGORIES
SOCIAL
Twitter feed is not available at the moment.

0 Comments

Submit a Comment