Just as the British politicians standing in the election will win or lose on Thursday’s election day, some stocks are destined to suffer a similar fate soon after. Analysts at RBC Capital Markets said there were similarities between the current market performance and the 1997 general election, the last time the UK transitioned from a Conservative to a Labor government. RBC analysts led by Mark Fielding said: “The strongest correlation in 2024 is the positive performance around the 1997 election, which was the last time we had a Labor government. However, this time the positive performance is in Broader across the market. RBC’s Fielding said it would be the second-best pre-election performance since 1992, trailing only the 12.6% gain before the 1997 election. , if a pattern similar to the 1997 election plays out in the future, trends over the next 1, 3 and 6 months are likely to be particularly strong. ” Notably, the FTSE 250, which is typically more sensitive to UK domestic market conditions, also showed strong growth, more closely mirroring the FTSE 100 than in 1997. It was down more than 2%. .FTSE .FTMC 5Y The investment bank named several sectors and stocks that could be significantly affected by a Labor victory, with Genuit, Howden and Travis Perkins in the building materials sector, while Taylor Wimpey and Vistry in the house builders sector. Two companies in the hydrogen production space, AFC Energy and ITM Power, are also expected to be net beneficiaries. Citi analyst Ami Galla also predicts that the real estate sector may be affected by the election outcome. Reforms to the National Planning Policy Framework (NPPF) promised by election winner Labor could significantly benefit housebuilders’ short-term land banks, Galla said in a July 3 research note to clients: “Investors are optimistic about planning reforms. The outlook is positive, providing a significant boost for housebuilders and improving the sector’s medium-term supply capacity.” The bank highlighted companies such as Barratt, Persimmon and Taylor Wimpey as likely to benefit from the reforms. “Persimmon and Taylor Wimpey look most likely to benefit from the NPPF’s reforms to short-term land banks and potential gains from the strategic pipeline, while Barratt is likely to benefit from higher land opportunities given its balance sheet strength,” Gala explained. and gains from strategic pipelines. “Barratt and Taylor Wimpey remain our preferred buy ratings given the opportunities presented by potential planning reforms and relatively low valuations. Not all stocks have upside risks, analysts say ASOS, boohoo Group and German-listed Zalando, as well as stockbrokers and asset managers AJ Bell, Rathbones and St. James’s Place, also expect London-focused housebuilder Berkeley to be challenged by Labour. .
