AMP Limited’s
(ASX:AMP) AMP Capital Investors Head of Investment Strategy and Chief Economist, Dr Shane Oliver has outlined how the Abbott Government’s first budget will impact the share market.
Mr Oliver believes the fiscal austerity in the budget is only a minor headwind for profits and says the budget’s overall impact is unlikely to be huge.
He says infrastructure spending, the reform inherent in public sector downsizing and privatisation and putting the budget on a sounder footing are long term positives.
Mr Oliver forecasts the budget will see building material stocks likely to benefit but says the budget could be a slight drag for retailers.
Across other asset classes Mr Oliver believes the budget will help keep interest rates down and see property prices likely to continue gaining on the back of low rates.
Mr Oliver says the announcements in the budget alone are not radical enough to have much of an impact on the Australian dollar.
AMP reported a net profit of $716 million in the 2013 calendar year.
