Powered by momentummedia
nestegg logo
Powered by momentummedia
nestegg logo
nestegg logo

Invest

Health sector rallies as Morrison claims victory

By Cameron Micallef · May 20 2019
Reading:
egg
egg
egg

Invest

Health sector rallies as Morrison claims victory

By Cameron Micallef
May 20 2019
Reading:
egg
egg
egg
Scott Morrison

Health sector rallies as Morrison claims victory

author image
By Cameron Micallef · May 20 2019
Reading:
egg
egg
egg
Scott Morrison

Off the back of a Coalition victory on Saturday night, share prices in the health sector have reacted positively.

The bounceback in health care shares, along with the banks, has led to an 11-year high for the ASX as a whole.

Why such strong movement in healthcare?

The Australian Labor Party intended to bring in a 2 per cent cap on price increases for private health insurance for the next two years.

When this policy was announced, combined with a broader expectation of a Labor win, investors became less inclined to buy shares in private health insurance for fear of a cap on profits as a flow-on effect.

Advertisement
Advertisement

However, with the Coalition winning the 2019 election, the cap on private health insurance will not be introduced.

This has led to strong gains of up to 11 per cent for some private health insurers.

Cautions from the experts

Goldman Sachs’ analysis of the private health insurance sector suggests that it can be a risky market in the long term.

While many in the industry saw Labor’s policy as a hit, Goldman Sachs also believes it addressed the industry headwinds of a falling participation rate and increasing youth exit.

Goldman Sachs does not believe special offers, such as Medibank’s 2 per cent discount for youths, will adequately address this issue.

In fact, Goldman Sachs believes the sector is overpriced and that investors should approach with caution.

This email address is being protected from spambots. You need JavaScript enabled to view it.

Health sector rallies as Morrison claims victory
Scott Morrison
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article
author image

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Join the nestegg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Nest Egg.

Read more

From the web

Recommended by Spike Native Network

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.