Stockbroking | Wealth Management | Corporate Advice

x

Resizing text on the web

To increase or decrease the magnification of a web page, press Ctrl and '+' (plus) to zoom in or Ctrl and '-' (minus) to zoom out. To return the page to its original size, press Ctrl + 0.

You can also scroll the mouse wheel up and down while holding Ctrl to increase/decrease zoom level.

Market gives PM-elect Morrison thumbs up

Prime Minister-elect Scott Morrison has been given the thumbs up by economists, who say the outcome of today's leadership vote is positive for the Australian economy.

The treasurer will become Australia's 30th prime minister after defeating Peter Dutton by 45-40 in a Liberal party room vote in Canberra on Friday.

The result sent the Australian share market and the Aussie dollar sharply higher, after both had been under pressure over the past two days of political uncertainty.

Chief economist at AMP Capital Shane Oliver said Mr Morrison - a centrist - was more market-friendly than his conservative contender Mr Dutton.

"This is a reasonably good outcome from an economic and investment perspective," Mr Oliver said.

"(Morrison) is seen as a reasonably sensible policymaker, is respected by investment markets in his role as treasurer and is seen as a centrist giving the Liberals perhaps a better chance of victory in the coming federal election."

JP Morgan chief economist Sally Auld said the decision provides some relief for the Australian dollar and stock market, as both had been underperforming this week amid the political uncertainty.

"Morrison is a known quantity and is generally viewed as having performed well in the portfolio (of treasurer)," Ms Auld said.

"Policy changes under a Morrison government are likely to be minimal (and) it is likely Morrison will preserve the ambition to return the budget to surplus."

However, both economists noted the closeness of the vote could prove problematic.

"Scott Morrison's relatively low margin of victory still poses the risk that there may still be more turmoil ahead, all of which could weigh on consumer and business confidence just as it did under the last Labor government," Mr Oliver said.

The Australian dollar moved sharply higher to 72.85 US cents when Mr Morrison's victory was confirmed at about 1250 AEST.

It had been trading between 72.39 and 72.506 US cent ahead of the Liberal party room vote.

On the ASX the benchmark S&P/ASX200 reversed an early loss and was trading 14 points higher in late trade.

Moody's Investors Service also offered its support, saying the change in the leadership has no implications for the country's coveted AAA credit rating.

Australians are due to go to the polls before May 2019.

Austrlaian Associated PressBack to Breaking News

Market Indices