Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:
French Face-Off Could Roil Stocks by Vito J. Racanelli
Summary: French voters head to the polls April 22. Betting websites currently put 63% odds on capitalist Nicolas Sarkozy. Socialist contender Ségolène Royal follows by just 1-2 percentage points in the polls. Some stocks that may be plays on the outcome:
- Sarkozy wants to reform France's 35-hour work-week, which should improve productivity at labor-intensive companies like food retailer Sodexho Alliance (SDX).
- Royal wants to up spending on housing and infrastructure, which could benefit cement maker Lafarge S.A. (LR).
- She supports a higher tax rate on dividends, which would hurt stocks with high payout ratios like France Telecom S.A. (FTE), but might be a boon for companies with low ratios like ST Microelectronics N.V. (NYSE:STM) and Rhodia SA (RHA).
- A Royal victory could mean new oil taxes, which would hurt Total S.A. (NYSE:TOT).