Morrison’s “miracle” good for Ramsay Health Care

Financial Journalist
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It was telling that Medibank Private (MPL) and NIB Holdings (NHF) leapt by more than 10% after the Coalition’s shock election win. A Labor government proposed capping health premium price increases at 2% for two years, hurting insurer margins and earnings.

The cap would have crunched private-hospital operators because insurers would have pressured them to find more cost savings. Ramsay Health Care, (RHC) my preferred healthcare stock, rallied 7.3% on Monday and has scope for further price gains in the next two years.

Healthcare was not the only winner from the election. Bank shares took off because the Federal Government is seen as less hostile to the sector from a regulatory perspective. And because retail investors, who seek fully franked yield, might start buying the banks again.

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