What stocks benefit from a Conservative win?

The Conservatives have come out on top in the election and won a huge majority. What stocks are set to benefit?

Markets and the pound rise as Conservatives win the election

The Conservatives have won the election and prime minister Boris Johnson has been re-elected with a large majority. As the results came in and confirmed the exit poll, sterling rallied against all major currencies. GBP/USD hit its highest level since the middle of 2018 while GBP/EUR hit its highest level since late June 2016. Meanwhile, theFTSE 250, which is mostly comprised of midcap firms focused on the UK market, has climbed to a new all-time high, while the rise in the pound capped the gains of the more internationally-focused FTSE 100.

Most UK-listed stocks will welcome the result of the election because Labour posed a threat to all publicly-listed businesses. The party wanted to radically overhaul the economy, give the state a larger role by nationalising industry, and to rewrite the rules for listed firms including stricter rules on climate change and stronger rights and representations for workers.

The Conservative win, however, means the public have voted for the status-quo and the party that traditionally champions free markets and business. The large majority has also removed the uncertainty from British politics and, in the short-term at least, Brexit. The majority should give the Conservatives the power to deliver Brexit as planned by the end of January 2020 and takes the immediate threat of no-deal off the table – although this could return late next year if negotiations over future trade do not go to plan.

Read what you need to know to profit from Brexit

What stocks will benefit from the Conservative win?

While the outcome of the election has resulted in a general bounce for UK equities there are some stocks that have jumped on the back of the Conservative win, or possibly a Labour loss.

Lets start with the stocks that Labour was hoping to nationalise:

Energy suppliers: Centrica, SSE and National Grid

Shares in Centrica, the owner of British Gas, soared to their highest level since the start of July on Friday morning while SSE also jumped to levels not seen since 2017. This is because the threat of being nationalised by the Labour government has been removed.

National Grid was also being targeted by Labour and this morning has climbed to its highest level in over two years.

Water utilities: Severn Trent and United Utilities

Similarly, water utility stocks have also rallied. Severn Trent shares hit their highest level since mid-2017 while United Utilities also saw a rise, albeit slightly less pronounced. Again, there were concerns over Labour’s plans to nationalise the industry.

BT Group

Labour also wanted to carve-out BT Group Openreach division, which is responsible for managing and developing the UK’s broadband network. While the party did not want to nationalise the whole of BT, the loss of Openreach would have been stark as it has become the main driver of earnings for the business and provides the company with its monopolistic edge in the market. BT shares have reclaimed most of the losses it had accumulated since the election was called.

Royal Mail

Royal Mail has also avoided being taken into public hands. Shares rallied to their highest level in six months but has not rallied as much as other stocks, partly because it still faces underlying problems such as the ongoing threat of industrial action and the shift in customer habits away from letters toward parcels, which is a much more competitive business.

Railway stocks: Go-Ahead, Stagecoach and Firstgroup

Labour also wanted to stop public services being provided by the private sector and intended not to renew contracts for railway and bus providers when the existing ones end, which would have gradually eaten away at revenue for firms like Go-Ahead Group, Firstgroup and Stagecoach. All three stocks have risen since the market opened on Friday morning, although not as much as some other sectors.

Oil and gas companies

Oil and gas companies operating in the UK will also be thankful that Labour did not win the election. The party was promising to introduce a ‘windfall tax’ on the industry to help fund the transition to cleaner energy. However, not only have they avoided that tax but they will reap the benefits of the ‘transformational sector deal’ that the Conservatives have promised UK oil and gas firms.

The largest players like BP and Royal Dutch Shell have not experienced much election-driven movement but the result in certainly in their long-term interests. Shares in smaller firms like Cairn Energy, however, have experienced a large lift this morning.

Housebuilders

The Conservatives have promised to continue promoting the idea of home ownership, which stands in stark contrast to Labour’s policies built around more social housing. The Conservatives have also vowed to extend the Help to Buy scheme that has proven so profitable for housebuilders to 2023, which means the fundamentals of the market look strong.

Housebuilders such as Persimmon and Barratt Developments were among the largest gainers on Friday morning.

Public service providers: Serco and G4S

G4S and Serco, which run public services such as prisons and detention centres, have also seen their share prices rocket following the election as they too were hoping to avoid a Labour government, which had promised to take all contracts back in-house and stop all private prison contracts. The Conservatives, on the other hand, are more than happy for these firms to continue providing these services and has in fact promised to bolster the capacity of prisons, which could be in their favour.


Denna information har sammanställts av IG Europe GmbH och IG Markets Ltd (båda är IG). Utöver friskrivningen nedan innehåller materialet på denna sida inte ett fastställande av våra handelspriser, eller ett erbjudande om en transaktion i ett finansiellt instrument. IG accepterar inget ansvar för eventuella åtgärder som görs eller inte görs baserat på detta material eller för de följder detta kan få. Inga garantier ges för riktigheten eller fullständigheten av denna information. Någon person som agerar på informationen gör det således på egen risk. Materialet tar inte hänsyn till specifika placeringsmål, ekonomiska situationer och behov av någon specifik person som får ta del av detta. Det har inte upprättats i enlighet med rättsliga krav som ställs för att främja oberoende investeringsanalyser utan skall betraktas som marknadsföringsmaterial. Se fullständig friskrivning och kvartalsvis sammanfattning.

Hitta en möjlighet att handla aktier

Gå lång eller kort på tusentals internationella aktier.

  • Öka din exponeringen mot marknaden genom att handla med hävstång
  • Handla med spreads från endast 0,1 % på viktiga globala aktier
  • Handla CFDs direkt i orderböcker genomdirect market access

Realtidskurser på de mest populära marknaderna

  • Valuta
  • Aktier
  • Index
Sälja
Köpa
Uppdaterad
Förändring
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sälja
Köpa
Uppdaterad
Förändring
Sälja
Köpa
Uppdaterad
Förändring
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Webbplatsens villkor gäller för kurserna ovan. Alla aktiekurser är fördröjda med minst 15 minuter.

Håll dig uppdaterad med IGs morgonrapport

Med IGs morgonrapport som kommer till din mejl i god tid före börsöppning får du ta del av marknadskommentarer och analyser från vår marknadsanalytiker Erik Hansén.

Jag vill få information från IG eller andra företag inom IG Group om handelsförslag, deras produkter och tjänster via epost.

För mer information om hur vi kan komma att använda dina uppgifter hänvisar vi till dokumentet Sekretessmeddelande och Åtkomstpolicy och avsnittet om sekretess.

Detta kanske intresserar dig…

Vi har en transparent avgiftsstruktur. Läs mer om vilka avgifter du eventuellt får betala för din trading.

Ta reda på varför så många kunder väljer oss och vad som gör oss till världens största CFD-leverantör.

Håll dig uppdaterad om viktiga marknadshändelser med hjälp av vår ekonomiska kalender.

CFD-kontrakt är komplexa instrument som innebär stor risk för snabba förluster på grund av hävstången. 68 % av alla icke-professionella kunder förlorar pengar på CFD-handel hos den här leverantören. Du bör tänka efter om du förstår hur CFD-kontrakt fungerar och om du har råd med den stora risken för att förlora dina pengar. Optioner och turbowarranter är komplexa finansiella instrument och du riskerar ditt kapital. Förluster kan ske extremt snabbt. CFD-kontrakt är komplexa instrument som innebär stor risk för snabba förluster på grund av hävstången.