The market may be giving up some of yesterday's gains from the Coalition's "miracle" election victory, but this doesn't mean there aren't big winners from the re-elected Morrison government.
In fact, the outlook for these stocks have improved significantly and they don't only include the obvious candidates like health insurers and the big banks.
The analysts at Macquarie Group Ltd (ASX: MQG) have scanned the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) and have come up with six stocks that it thinks will benefit from the return of the Liberal-National Coalition.
These stocks fit into four categories, according to the broker, and they are:
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House price winners
The fall in house prices is getting less bad and the Coalition victory will ensure that restrictions to negative gearing are taken off the political agenda. That can only help the market find a floor.
This combined with the Coalition's First Home Loan Deposit Scheme, RBA rate cuts and the lowering of APRA's 7.25% stress test are all positives for housing. The two stocks the broker likes are Mirvac Group (ASX: MGR) and REA Group Limited (ASX: REA).
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Net positive for discretionary retailers
Macquarie believes the tax cut proposed by the Coalition (and supported by Labor) has already been priced into the sector. This means retail stocks won't get a further boost from the tax offset.
However, the Morrison government is tipped to bring stability back to the sector and could bolster consumer confidence, which could translate to more discretionary spending. The best way to get exposure to this thematic is not through listed retailers but through Nine Entertainment Co Holdings Ltd (ASX: NEC) as ad spend is likely to increase in response.
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Income stocks yielders
The overhang from Labor's franking credit changes is now put to rest and Macquarie believes that retail investors are finally flocking back to bank stocks. The share prices of our banks have been under pressure but retail investors have held back from buying the dip up to now.
The banks that the broker likes best are Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd. (ASX: NAB), although it also picked iron ore miner Fortescue Metals Group Limited (ASX: FMG) for its strategy portfolio.
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Healthier outlook for insurers and hospitals
Health insurers NIB Holdings Limited (ASX: NHF) and Medibank Private Ltd (ASX: MPL) have already bounced hard yesterday on relief that Labor won't be able to cap premium increases as it had promised. But health care suppliers are also likely to benefit from the flow on effects of higher premiums and Macquarie likes Ramsay Health Care Limited Fully Paid Ord. Shrs (ASX: RHC) for this reason.
