From Morningstar: 2024-06-12 04:29:00

1. Polling data overwhelmingly predicts that widespread equity market disruption is unlikely when Britain’s Labour party takes power. Potential changes include an increase in minimum wage and corporation tax, impacting large employers. The party’s promise to overhaul planning regulations could boost UK homebuilding shares.

2. A lack of housing built under the Conservative government has led to rising prices and discontent among non-homeowners. Labour’s promise to reduce red tape in building homes may create opportunities for investors in UK homebuilding shares, offering more than 50% upside potential in some cases.

3. Higher energy prices from the Ukraine war brought focus to utilities sector, with scrutiny on UK water companies. Labour promises less extreme actions towards errant water utility firms, posing minimal impact on water stocks. Push for decarbonization of power grid may benefit utilities shares, especially those heavily investing in renewables.

4. Both Conservatives and Labour aim to increase defence spending to 2.5% of GDP, benefiting UK-based defence firms. Additional spending could result in about £17 billion annually. While most defense companies are now fairly valued, German provider Rheinmetall is a top pick with a 4-star rating.



Read more at Morningstar: Three Stock Sectors That Could Rally After the UK…