-- The prospect of a change in the balance of power in France has investors on edge, with banks, highway operators and utilities among the stocks with most on the line.Private Jets and Yachts Land in Nantucket for Jefferies Takeover
“Banks hold a large amount of debt and would likely suffer most from higher credit costs or any sharp increase in borrowing,” said Goldman Sachs Group Inc. strategist Lilia Peytavin. “Investors also worry about windfall taxes or capital gain taxes on dividends.” Construction firms could also be impacted by the possible rollback in subsidies and changes in energy efficiency policies, Morgan Stanley strategists said.Surging borrowing costs would be a blow for green energy firms, already reeling from high interest rates. They, alongside other energy utilities, also could see higher taxes and the withdrawal of green financing.
Barclays Plc analyst Lydia Rainforth downplays risks to integrated energy stocks, including TotalEnergies SE. While acknowledging risks such as buyback taxes, Rainforth doesn’t expect the investment case for TotalEnergies to be disrupted, “regardless of who is in government in France.”A majority for Le Pen could derail France’s transition plan toward electric vehicles, as her party favors scrapping plans to ban the sale of new combustion engine vehicles by 2035.
Meanwhile, the outlook for luxury-goods firms such as LVMH, Hermes International SCA and Gucci owner Kering SA remains broadly intact as less than 10% of their sales are generated at home. But a potential risk is that a new government adapts a stricter tariff stance, fueling a trade dispute with China, the world’s biggest luxury market.
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