Friday, October 10, 2008

Morgan Poll Hits PM Stocks

Take a look at the effect of tonight's shock Morgan Poll, out in the past hour, on our PM stocks.

The Morgan Poll is an opinion poll on vote share and its latest results show Labour closing the gap on National, and traders on iPredict have reacted vigorously to the news.

The PM.LABOUR contract, which closes at $1 if Labour leads the next government, skyrocketed all the way to 38 cents, up a full 15 cents from what has been a fairly long term average in the low to mid-twenties.

However, the spike did not last, and other traders appear to have come in and take advantage of some traders' willingness to pay up to 38 cents for PM.LABOUR contracts.

PM.NATIONAL also reacted but not as strongly and few trades were being done than on the Labour contract.

The present volatility in the PM stocks reflects traders trying to understand the new information that has unexpectedly arrived and the consequences for Labour and National. The question of who will lead the next government is complex in an MMP environment. Traders must not only consider vote share, but also the combinations of parties which could go into forming the next government.

What is clear is that this Morgan Poll is of a consequence that other major events this week - the shock news that the government is forecast to be in deficit for the next decade, the release of National's tax policy, and the unexpected turn for the worse in global finance markets - are not. None of these other events moved the PM stocks at all. For that, we need shock poll results.

It will be interesting to see where the market settles at as this new information is understood and incorporated.

Click on the chart for a bigger view.

Update 11/10: Labour's chances of leading the next government seems to have settled 5% up from their long term average in the low 20's. National's likelihood of leading the next government has seen a corresponding 5% fall. National's 50 point lead in the leadership stakes has been cut to 40.

Another poll out tomorrow, Sunday. Will be interesting to see whether it has a similar effect.


jak said...

Those graphs look much better than the previous ones.
I guess every triangle point represent a trade. Any plan to use these as the current in stock details graphs? Because the current ones are pretty woeful.

Matt Burgess said...

Yes, they are woeful, an inherited flaw I'm afraid. And one we are working on fixing.