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Boris Johnson vs Jeremy Corbyn! Who do I think can best boost the London Stock Exchange?

The UK stock market has taken a hammering since Brexit negotiations began in 2016. There’s a glimmer of an end in sight, but it’s very much a lottery who will win the political race and where that will leave the stock market in the short, mid and long-term future.

Prime Minister Boris Johnson pushed a December 12 election through after pausing his Brexit deal by securing a flexible extension from the EU. The extension is until January 31, but technically the UK can leave before then depending on the election outcome. Johnson wanted the election to try to restore a Conservative party majority in Parliament so that he can get his Brexit deal approved. He’s leading in the polls, but from previous experience, we know to expect the unexpected.

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London Stock Exchange

The London Stock Exchange, home to the FTSE 350, AIM and All-share indices has seen a rollercoaster few years. Some companies have dropped out, others have been liquidated and some have been snapped up in acquisitions.

If Labour Party leader Jeremy Corbyn becomes the next Prime Minister, then there will be sweeping changes across the UK. He wants to give everyone free broadband, nationalise energy and increase corporation tax for the biggest businesses. But Brexit could still happen under his watch.

What I think this means for the companies listed on the London Stock Exchange is further turbulence ahead but ultimately the British stock market will bounce back.

Corbyn vs Johnson

After 10 years of a Conservative government, there would naturally be an initial shock to the stock market if Corbyn wins.

If the Conservatives get in, then Brexit should be completed swiftly, so I think we could expect an initial bounce but it won’t necessarily convert to a long-term boost.

Statistics show from previous elections, that stocks have bounced or fallen in the aftermath, but eventually recover.

Prime ministers can create waves in stock market pricing, but ultimately the underlying strength of any business makes it a worthy stock or not.

The future

We generally consider that company share prices would recover more quickly under a Conservative government, but that does not mean it would be plain sailing. There will be winners and losers in either scenario, but I do believe there are bargains to be found in a market downturn and many companies will survive the turmoil to emerge stronger than ever.

Although there are bearish views of the UK economic climate in the coming years, there is also a case to be bullish. UK equities have been hit hard by our chaotic political times. This means they are cheap in comparison with global peers. Global investors have largely lost confidence in British stocks since the 2016 referendum, but once it’s over and a clearer path to the future can be seen, then I think global investors will return and the London Stock Exchange will start to see significant improvement in the value of its constituents.

So the answer to my initial question is? If you do your research and buy shares in companies you believe have the strength and conviction to survive economic turmoil, then I think your investments will prosper long term, no matter which Prime Minister is running the country.

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Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.