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Saturday's general election in New Zealand could see a change of rule for the first time in ten years.
The main opposition Labour Party was struggling in the polls and showed no sign of challenging the incumbent National party until an abrupt switch of leadership at the beginning of August.
Just two weeks after 37-year-old Jacinda Ardern took control of the center-Left Labour Party, one poll stunned observers by putting her level with current Prime Minister Bill English.
It was no flash in the pan. As it stood on Friday, a Radio New Zealand poll of polls had the two main parties still neck-and-neck.
A possible change of leadership in New Zealand has caught many off-guard and Swiss bank UBS has now put together a note on the election risk and the best places to safeguard assets.
UBS said Thursday there is now a "fair chance" of a change in government and that will put pressure on GDP growth, inflation and the kiwi dollar.
"Labour's policies imply an environment of lower immigration, business confidence and a weaker housing market, all pointing to lower GDP growth.
"Inflation could also be higher due to wage inflation," the note added.
The NZ dollar is the tenth most traded currency in the world, according to the 2016 Triennial Central Bank Survey. It benefits from the 'carry trade' as Japanese investors buy it to benefit from NZ's higher interest rate.
UBS said the Kiwi dollar could fall if the market prices in lower GDP growth and a downside scenario for NZD/USD of 0.68 cents could come into reach.
As of Monday, the New Zealand dollar buys 73 cents.
UBS has calculated that any change in New Zealand leadership causes its basket of top 50 stocks to typically underperform by around seven percent in the 3 months following the result.
That, however, could be magnified this time around said UBS as PE (price earnings) ratios are currently stretched to record levels.
UBS identifies housing-related stocks as at risk from any Labour-led coalition with policy promises to ban the sale of residential property to non-resident foreign buyers and build 10,000 new homes annually.
UBS says any fall in housing would put pressure on the aged care sector and lower economic growth should negatively impact the transportation sector.
UBS also identified potential risks to autos and air travel stocks, should Labour form a ruling coalition with the New Zealand Green Party.
Assuming New Zealand Labour wins on Saturday, UBS is outlining two strategies. First, it advised that real estate investment trusts (REIT's) or companies that produce and sell electricity (gentailers) shouldn't feel too much impact by a Labour victory.
The bank, however, cautioned that any defensive investment based on dividend yield might well be hurt by a general rise in the interest rate.
The second strategy opined by UBS is for investors to shift capital across the Tasman Sea to Australia.