Top 3 factors Singaporean investors must watch out for in Australia

The Australian Federal Election is over for 2013 and Tony Abbott is the new Prime Minister following a landslide victory for the Liberal Party.

The Australian dollar rose from 1.17 to 1.18 against the Singaporean Dollar and has since dropped back but what does new Australian leadership mean for Singapore’s investors looking to Australian markets.

Highlighted below are 3 key items to watch for those investors in Singapore looking to Australia as an opportunity.

There is no doubt that it will be difficult times ahead for the Liberal Party to return the budget to surplus and Abbott is well aware of this. With any new leadership of any country it will always take time before we see the true impact of their policies.

I have highlighted some of the possible changes that we may see under new leadership impacting investment in Australia.

1. Reduced sovereign risk: Given the instability Australia has experienced under Labor leadership foreign institutional investors may start to see Australia as a more stable place to invest from a political standpoint. This could encourage greater investment as well as low volatility funds to start increasing exposure in Australian markets.
2. Carbon Tax: Will the Liberal Party honour their commitment to scrap the Carbon Tax. There is no doubt that the introduction of the tax has had a large impact on investments in Australia so could its abolishment bring back confidence in the mining sector?
3. Federal Budget – A return to surplus: With a Federal Budget deficit of approximately AUD 30 billion the Liberal Party has their work ‘cut out’ to return to surplus. Sound financial management may also restore foreign investor confidence in the Australian economy if new leadership is able to make some early progress on improving the Federal Budget position.

Of the three, keep an eye on the party’s actions regarding the Carbon Tax and any improvements in the Federal Budget.

There are three certainties in life; death, taxes and change and change is exactly what Australia is set to experience under Tony Abbott’s leadership.

The impact this has on foreign investment into the country only time will tell. The best course of action is always to remain vigilante, stay informed and continue to ensure that you are up to date with the latest market news.

DISCLAIMER: Please note that all information above is for general information purposes only and is not investment advice. All readers should seek their own financial, legal and taxation advice before making any investment decisions to consider if it is right for you.