A Pauline Hanson Win Could Send Your Super Soaring
By Dale Gillham
Could a Pauline Hanson election victory make your super fund significantly more valuable? It sounds like a strange question, but it may be one of the most important investment debates Australians aren't paying attention to.
This week, Pauline Hanson used her National Press Club address to outline a vision for Australia centred on more mining, more energy production, faster project approvals and less regulation. While the political debate will focus on immigration, culture and social issues, investors may be looking at something entirely different. Their superannuation balances.
Why your super could rise strongly under Hanson
Most Australians don't realise that some of the largest holdings inside their super funds are mining and energy companies. Giants like BHP and Rio Tinto feature heavily across the industry, meaning the fortunes of millions of Australians are directly linked to the performance of the resources sector whether they actively invest or not. That is what makes Hanson's economic message so interesting.
Her argument is that Australia has spent too long increasing regulation and focusing on redistribution while productivity growth has stalled. Instead, she wants to make it easier for companies to invest, build projects, employ workers and develop Australia's vast natural resources.
That is one reason Hanson has developed a close relationship with mining billionaire Gina Rinehart, whom she has publicly acknowledged as a source of policy ideas. The bigger issue, however, is productivity.
What happens when productivity increases?
Australia's productivity growth has been weak for years, yet productivity remains one of the most important drivers of rising wages, company profits and long-term living standards. Hanson is tapping into a growing belief that Australia needs to focus less on dividing wealth and more on creating it by producing more, building more and extracting greater value from the resources it already owns.
For investors, the question is simple. What happens if governments become more supportive of the industries that generate some of Australia's largest profits? Historically, the answer has been higher share prices.
The reality is that markets don't care whether a policy is popular. They care whether it increases profits and if a more mining-friendly and business-friendly Australia leads to higher earnings for some of the country's largest companies, investors will likely reward them accordingly and because those same companies are major holdings in Australia's superannuation system, the benefits could extend far beyond shareholders and into the retirement savings of millions of Australians.
What are the best and worst-performing sectors last week?
The best-performing sectors included Information Health Care, up 3.26 per cent, followed by Financials, up 1.21 per cent and Information Technology, up 0.54 per cent. The worst performing sectors included Energy, down 6.92 per cent, followed by Utilities, down 3.71 per cent and Communication Services, down 1.47 per cent.
The best performing stocks in the ASX top 100 included Regis Resources, up 18.63 per cent, followed by Cochlear, up 13.87 per cent and Genesis Minerals, up 12.03 per cent. The worst-performing stocks included Pilbara Minerals, down 9.82 per cent, followed by Santos Limited, down 9.54 per cent and Ampol Limited, down 9.03 per cent.
What's next for the Australian stock market?
The All-Ordinaries Index delivered a volatile performance last week. By Thursday, buyers had driven the market more than 2 per cent higher and within the critical 9,200 level. Yet as soon as the index challenged that barrier on Friday, sellers returned aggressively, wiping out most of the week's gains and leaving the market up just 0.4 per cent overall.
The rejection at 9,200 should not come as a surprise. For more than a year, this level has acted as a ceiling, repeatedly halting advances and forcing the market lower. The question now is whether this latest attempt proves any different. From my perspective, what happens next could determine the market's direction for the remainder of the year.
Students of price action will recognise that the current setup is beginning to resemble patterns that have preceded some of the market's most significant corrections. That does not guarantee a decline, but it does mean investors should be paying close attention. A decisive break above 9,200 would significantly increase the probability of a move to fresh all-time highs and potentially put the 10,000 level into focus. Conversely, another failure at resistance followed by a break below 8,600 would likely signal that a much deeper correction is unfolding, with 8,000 becoming a realistic downside target.
While the broader market remains locked in this battle, several sectors are quietly showing impressive strength. Real Estate is one of them. After spending much of the past year underperforming, the sector has emerged as one of the market's strongest performers over the past month despite generally challenging conditions elsewhere. If expectations for lower interest rates continue to build, Real Estate could become a major contributor to the next leg higher.
Investor sentiment also received support from easing tensions in the Middle East. The ceasefire developments triggered a sharp decline in oil prices, which weighed heavily on the Energy sector and pushed it more than 7 per cent lower for the week. While that hurt energy stocks, lower oil prices are generally positive for the broader market as they ease inflation pressures, reduce costs for businesses and consumers, and strengthen the case for future interest rate cuts.
However, for now, the market remains at a crossroads. The battle around 9,200 is far more than a short-term technical event; it may determine whether investors are preparing for a run toward 10,000 or positioning for the first major correction in years. Given the importance of this moment, investors would be wise to have a plan in place and understand what actions they may need to take should sellers regain control in the weeks ahead.
Good luck and good trading.
Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online.
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