A hung parliament not necessarily a hung market

By Mark Dutton on August 8th, 2010

For the first time since 1940, Australia has a hung parliament. In this Point of View
AXA’s Chief Investment Officer Mark Dutton points out that this is not necessarily
negative and looks at the implications for investment markets.
In brief:
• A hung parliament is not necessarily a negative outcome even though it is currently
generating much uncertainty. Minorities can form a stable government.
• The Australian dollar is susceptible to an environment of additional uncertainty
because it is at the high end of its valuation range.
• In contrast the Australian sharemarket is at the low end of its valuation range, but is
unlikely to make much headway until there is more clarity as to how the situation will
play out.

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