If Corbyn is PM, do you think the FTSE would drop?

[Deleted User]

If Corbyn was the permanent new PM, do you think the FTSE 100 would fall or stay where it is?

SonOf

it will probably rise. Not because Corbyn is considered good for the economy. He isn't. It will be because Sterling will tank and that will push the FTSE100 up.

If you were talking about other UK indexes, such as the FTSE250, then the answer would be different.

pip895

If he became interim PM I think the pound would rise sharply as SonOf says S&S would move differently.

If premiant PM then some shares would shift very substantially down I imagine - water companies among them.

jamei305

BP and Shell take up a whopping 20% of the FTSE100 between them. Seven other companies take up another 30%, including two pharma companies.

I know he's set on stealing assets from pharma companies but I'm not sure he's mentioned sequestrating oil companies yet. However it wouldn't surprise me if falls in share prices more than counteracted a say, 20% drop in sterling and both the index and the pound went down.

This would happen if he had a surprise overall majority on election night for example (currently this is around 12/1 with the bookies I believe). If a Labour government was looking a distinct possibility in the run up you'd get some of this priced in before he became PM.

Reaper

On the whole the stock market sees Labour as anti-business and the Conservatives as pro-business.

So if Labour are ahead in the polls and if they go ahead to win the UK stock market will fall in the short term. However what happens in the long term will depend on the actual policies implemented.

For example it's easy in opposition to declare they will re-nationalise the railways, royal mail, gas and electricity companies but when it comes to paying out huge sums to compensate the existing owners (shareholders) of those companies it might rapidly drop down the list of priorities. Does a socialist government really want to be seen handing over a lot of money to the relatively wealthy rather than the poor?

So I expect the stock market to drop in the run up to an election because the stock market hates uncertainty, but I suspect it will recover somewhat when their worst fears fail to materialise.

Uxb1

No you don't you simply re-nationalize with no compensation at all.
You can re-designate the shares as some sort of perpetual war bond - costs you nowt.
Better still just use the emergency power acts to remove all private ownership of the shares without further due accord as they are being used to the detriment of the UK. Much like the UK Gov did in WWII to requisition land and buildings for government use - and you did not get the option to say no.
Actually a minority profited from this where the government improved the land/buildings so when it was eventually returned the former owners (or often their executors by that stage) were given back a more valuable asset. In most cases though the land/property had been trashed.

You may rest assured that there is no way a hard left Labour Gov would actually pay out hard cash to the current rich shareholders of the utility and other companies, airports and the rest.

As other have said you would get it all priced in long before any such win occurred if it looked likely.
My super rich acquaintances have already been taking advice on actions to take and countries to go to in such event.
I gather the thinking is that some form of capital controls might be imposed by labour government emergency decree on the night following any such election to prevent capital flight so action prior is essential.
The EU of course would go mental.......

veryintrigued

He'd probably look to nationalise it!

jamei305

veryintrigued wrote: »

He'd probably look to nationalise it!

The Peoples’ 100 Index, with the NHS as the largest constituent. It will be very volatile because of the ongoing nationalisations.

MaxiRobriguez

UK markets are massively underweighted already. For markets to continue downwards you need buyers and sellers, there's not many of either at the moment, Corbyn or no Corbyn.

MarkBargain

It's hard to predict as with Johnson we could be looking at a no deal Brexit in a month's time, with trade tariffs and all sorts of disruption to businesses and the City of London. Corbyn promises to extend the deadline, try to negotiate a new deal then put that deal to a referendum with remain as the other option.

chrisgg

Depends on many factors, whether Corbyn is permanent or caretaker, whether it is part of a coalition or a labour majority.

Any of the scenarios above would have profoundly different impacts on both stocks and sterling.