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Market Outlook – A Conservative sense of relief

The shock election result, that saw former LibDem leader Paddy Ashdown and former Labour spin doctor Alastair Campbell commit to eating hat and kilt respectively has produced an almost audible sigh of relief across financial markets. The blue chip FTSE100 had all but factored in a coalition as it closed out 0.1% higher at 6,933.74 Wednesday, buoyed by better-than-expected PMI index scores from the eurozone & UK.

But as the threat of Labour driven policies on energy and banking evaporated with Thursday morning’s shock result, the prospect of continued recovery under Tory stewardship brings several sectors into focus as investment opportunities.

Shares in part state-owned Lloyds Banking (LLOY) and RBS (RBS) rocketed on the prospect of the new Tory Govt pressing ahead with plans to sell it’s remaining stake. In particular with Lloyds, where the taxpayer stake has already dipped below 20%, there is also the prospect of a retail offering.

Labour had been aiming to inject more competition into the banking sector – which is already being subjected to a Competition and Markets Authority review – by calling for the creation of new challenger banks and a market share test. There could also have been a bankers’ bonus tax to help pay for its compulsory jobs guarantee.

Shares in energy & water companies such as Centrica (CNA), SSE (SSE) and Severn Trent (SVT) added gains, having underperformed for some time as Labour’s threat to freeze gas and electricity bills until 2017 weighed heavily on sentiment.

And shares in property companies, including housebuilders such as Taylor Wimpey (TW.) and Bovis (BVS) and estate agents Foxtons (FOXT) and Countrywide (CWD) all shot higher, again having been shackled by Labour’s pledge to cap rent increases in the private sector and to introduce a mansion tax on homes worth more than £2m.

Other winners include outsourcing firms such as Capita (CPI) and Serco (SRP) – the Conservatives have long been committed to cutting public spending and outsourcing, plus transport firms such as Go-Ahead Group (GOG) and Stagecoach (SGC) – again recent underperformers as Labour’s threat to return to a system approaching full nationalisation weighed heavily.

Expect further opportunities and enhancements to current tax breaks such as the EIS / SEIS schemes for investment into early stage companies.

Election 2015 – How it looks from a far country

Sterling leapt by 2.88 cents  in one mighty overnight bound as the UK’s sensible electorate undid all the damage which the rudderless English parties had been causing over the past few weeks.

Cameron lacks leadership qualities, has a weak chin and the voters appear to have decided yet again, quite rightly that he can not be trusted with an outright majority.

The Lib Dems were savaged, again quite rightly for having sold their soul and their principles for the sake of power in a coalition, leaving Cleggy free to return to his role in Last of The Summer Wine. Cameron failed to win the election, Labour lost it and Millibuncle will now disappear to Thorne Waste as governor of some disused coalmine, which he will turn into a perfume factory at enormous expense to the local ratepayers.

Farage and his UK Incompetence Party seem to have disappeared without trace for the time being and only later in the day will we know whether he is ever likely to resurface again.

The real victors are of course the Scot Nats, the only political party in the UK to have a leader and what a brilliant leader she has become. In fact the only party leader with leadership qualities. What a pity she will never become Prime Minister of a happily United Kingdom – will she ??

This election should have been a titanic battle for power. Instead it produced a set of nonentities, boring the pants off the public and  desperately trying to ensure that their snouts remained firmly stuck in the same coalition gravy train.

The final outcome is that thousands more hospital administrators will now be appointed to pass bits of useless paper to each other, whilst the number of doctors and nurses at the sharp end, will remain pathetically inadequate and the electorate will continue to suffer from a level of services which not a single member of parliament would tolerate, were they ever to become poor enough to need to use them.

HiddenGreece –  villas and houses for sale in Greece – http://www.hiddengreece.net

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