Kevin Rudd is returning to the Lodge at a time when the Australian stock market, is far recovered from the swoon it saw during his first term of office. But the market is still looking decidedly shaky amid concerns the Chinese economy is spluttering, with the US Federal Reserve's preparation to take markets off life support by scaling back its bond buying program adding to jitters.
During Rudd’s first term in office the S&P/ASX200 Index fell 31 per cent, according to Bloomberg data.
Of course, the Nambour-born, Mandarin Chinese speaking former diplomat’s first term as PM coincided with the meltdown in global markets following the bankruptcy of Lehman Brothers.
Investors were far happier during Julia Gillard’s time in the Lodge. The S&P/ASX200 Index rose 3.9 per cent during her three years in office, according to Bloomberg.
Rudd was at pains to stress at a news conference last night he wants business to regard him and his cabinet as partners. Few believe he can repair that fractured relationship. Chris Caton, BT’s chief economist, says the relationship between the Labor Party and corporate Australia is “poisonous”.
Caton and others think the stock market may bounce if Tony Abbott becomes prime minister as he has friendlier business policies.
Marissa Rossi, head of research, equities, at UBS Global Asset Management, agrees. Rossi says the Australian public has lost confidence in the minority Labor government.
“Some consumer confidence could be regained if the election is sooner rather than later,” Rossi says.
The S&P/ASX200 Index is up just 1.8 per cent this year but is down 9.2 per cent in US dollar terms. The benchmark index has fallen 9.4 per cent since its 52-week high of 5,220.987 on May 14.