Chart of the Day: How do elections impact the stock market?

Polls don't matter that much, apparently.

Historical data show that Singapore's stock market is relatively unperturbed by General Elections (GEs) in the city-state.

According to UOB Kay Hian, previous GEs had no discernible impact on the local bourse, as external factors and corporate earnings growth are the key drivers of stock prices.

As an indication, the 1991 election saw PAP losing the most parliamentary seats since independence with the lowest share of popular votes at that point in time but yet the FSSTI rose 2.3% three months after the polling date.

As for 2001, the FSSTI rallied 35% three months after the polling date but the report noted that the outperformance was due to a low base effect in late-01.

“With the election out of the way, we believe the next focus of the government will be the formation of a new Cabinet. Of particular interest would be the appointment of the next Transport Minister following the departure of Lui Tuck Yew, who did not stand for re-election,” said UOB Kay Hian.