Labour’s leaked draft manifesto has failed to trouble shares in various sectors threatened with nationalisation.
Postal delivery group Royal Mail (RMG), utility firms like SSE (SSE) and transport operators such as Go-Ahead Group (GOG) would be affected if Labour won the general election on 8 June.
However, their share prices are unaffected by today’s news which implies investors are giving Labour little chance of winning.
Labour’s general election manifesto is expected to be formally signed off today (11 May). The Telegraph, which has seen a copy of the document, says it contains policies on renationalising railways, parts of the energy sector and Royal Mail.
This is how the stock market has reacted in early trading:
| LABOUR'S MANIFESTO: MARKET REACTION | |
| Sector / Company | Share price gain/loss 11 May 2017 |
| POSTAL DELIVERY | |
| Royal Mail | 0.3% |
| RAILWAYS | |
| Go-Ahead Group | -0.8% |
| FirstGroup | 0.1% |
| Stagecoach | 0.1% |
| ENERGY | |
| SSE | -0.1% |
| Centrica | -1.2% |
| Source: Shares, Google Finance | |
The BBC, which has also seen the leaked document, claims Labour wants at least one publicly-owned energy supplier in every region of the country, with the government controlling the transmission and distribution grids. The latter is relevant to National Grid’s (NG.) whose shares ease back by a mere 0.4% on the news.
The leaked manifesto also proposes a rise in income tax for people earning more than £80,000 a year, according to The Telegraph. It also claims the political party wants to fine businesses which pay their staff high wages and impose a business levy on profit.
Furthermore, companies with government contracts would only be allowed to pay their highest earner 20 times more than the lowest.
There are plenty of companies on the UK stock market which work for the government including the big outsourcers likes Capita (CPI) and G4S (GFS).
