Could shares in brickmaker Boral soar if Donald Trump becomes US President?

Donald Trump’s proposed Mexican wall will need a lot of bricks Photo: Tom Pennington Boral is getting the trucks ready… just in case Trump decides to build anything big. Photo: Ben Rushton
Nanjing Night Net

As the possibility of Donald Trump winning the US presidency becomes more realistic by the day, local investors are starting to ponder what a Trump presidency could mean for the Australian sharemarket.

The chief investment officer of Australian Foundation Investment Company, Mark Freeman, believes he might have found the answer.

Referring to the large wall that Mr Trump has vowed to build along the border of the US and Mexico if he wins office, Mr Freeman told AFIC shareholders that building materials companies could thrive under a future President Trump.

“One of the stocks we might have to look at is Boral, because they manufacture bricks in the US and they will need a lot of bricks to build that wall,” he told AFIC shareholders on Wednesday.

Yes, Mr Freeman was joking, but then again, most people thought Mr Trump was joking too when he flagged plans to run for president.

But it seems someone is already onto the “Trump & pump” strategy; shares in Boral have risen 17 per cent over the past five months.

US Bank strategist Bill Merz​ was quoted by Bloomberg last month as saying the election was making markets more volatile.

“The longer there remains uncertainty in the election cycle, the more it can start to creep into investor sentiment and expectations around policy and that can facilitate more volatility,” he said.

While Boral’s link to the US election may be more humorous than serious, some ASX-listed companies do have a bit riding on the outcome of the US presidential race.

BHP Billiton and Rio Tinto will have reason to be concerned if Democratic candidate Bernie Sanders wins his way to the White House.

In late 2015, Senator Sanders jointly sponsored a bill to repeal the law that gave the two ASX-listed miners access to land earmarked for a new copper mine called Resolution.

The Resolution mine, of which BHP and Rio each own 50 per cent, is controversial because it will be built on lands that Apache people consider to be sacred.

Rio and BHP were given access in a land-swap deal that has been bitterly contested.

Despite the situation, neither miner will be making donations to Senator Sanders’ rivals; both have strict policies banning political donations in all countries.

This story Administrator ready to work first appeared on Nanjing Night Net.

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