The Chancellor’s pre-election Budget contained well-judged treats for several major voting groups.
First-time buyers, savers, pensioners, Scottish voters and drinkers were all catered for — but which FTSE 100 companies are likely to benefit the most? I’ve selected five stocks that could see an uplift in sales or profits as a result of the Chancellor’s bid for re-election.
Money matters
Some of the biggest changes announced today related to savings and pensions. There will be a new flexible ISA that allows savers to withdraw money and pay it back in later in the year without losing their tax-free allowance. Tax on savings interest will also be cut.
However, the big news for investors was that up to 5m people who have already bought annuities will be able to cash them in, presumably with a view to reinvesting the money elsewhere.
The most likely beneficiary of this decision is Hargreaves Lansdown (LSE: HL), whose share price rose by 5.6% after the Budget. Fellow FTSE 100 wealth management firm, St James’s Place (LSE: STJ), is also likely to benefit, and was up by 3.6% this afternoon.
Mine’s a double
The Chancellor stopped short of a politically unacceptable cut to tobacco duty, but he was happy to make an appeal to pub-goers and drinkers, cutting beer duty by 1p per pint and duty on Scotch whisky by 2%.
Shares in Diageo (LSE: DGE) were up by 1.9% shortly after this news, as the firm sells a lot of Scotch whisky in the UK, even though this is only a small part of its global revenue.
Help to Buy
No Budget would be complete without a new measure aimed at supporting the housing market. Today, the Chancellor announced the Help To Buy ISA, which will allow first-time buyers to receive £50 from the government for every £200 they save towards a deposit, up to a maximum savings level of £12,000.
The offer will apply to houses valued at up to £450,000 in London and £250,000 elsewhere.
Unsurprisingly, shares in housebuilders edged higher after the news. The biggest riser in the sector was mid-market builder Taylor Wimpey (LSE: TW), up 2.4%. Taylor Wimpey’s 2014 average selling price of £213k suggests to me that many of its customers could benefit from this initiative. Barratt Developments (LSE: BDEV) was also higher, gaining 1.5%.
Today’s best buys?
Each of these firms offers clear attractions for investors, but today’s news alone isn’t enough to make any one company a buy, in my view.