SYDNEY (Reuters) – Shares in Australian medical imaging and cancer-treatment firms rose on Friday after the opposition Labor party promised increased spending in the sector, weeks out from an election that opinion polls suggest they will win in a landslide.
The stock price gains added a cumulative A$100 million ($70 million) to the market capitalization of the four biggest movers and underscored how seriously equity markets are pricing in a center-left Labor victory at a vote due by the end of May.
Imagery firms Integral Diagnostics Ltd and Capitol Health Ltd posted the largest gains, rising more than 4 percent in early trade, after Labor leader Bill Shorten promised A$600 million to subsidize cancer-related scans.
“You pretty much just assume that everyone in the sector will get a kick out of that,” said Mathan Somasundaram, market portfolio strategist at Sydney stockbroker Blue Ocean Equities.
“The market is pricing in all the Labor policies,” he said.
Australia’s second-largest medical center operator, Healius Ltd, rose 3 percent, while skin-regeneration firm Avita Medical Ltd rose as much as 3.7 percent. The broader market fell half a percentage point.
Shorten promised the A$600 million in imagery spending over four years as part of a A$2.3 billion cancer-care package that dramatically broadens government subsidies for treating the condition, which is one of Australia’s biggest killers.
The package also includes A$433 million to cover consultations with cancer specialists.
“One in two Australians will be diagnosed with cancer during their life … we’re going to help people be in the fight of their life, be alongside them,” he told Australian Broadcasting Corporation radio on Friday.
“That is what people pay their taxes for,” he said.
Campaigning has already begun in earnest for an election that is set to be called imminently and must be held by the end of May.
Opinion polling shows Prime Minister Scott Morrison’s center-right coalition government on track for defeat after six tumultuous years in power during which two prime ministers were toppled by internal ructions.
The government offered broad income tax cuts and promised infrastructure spending in a pre-election budget on Tuesday.
Integral Diagnostics Chief Executive Officer Ian Kadish welcomed the cancer funding promises, which he said would improve patients’ access to scans. Capitol, Healius and Avita did not respond immediately to requests for comment.
($1 = 1.4071 Australian dollars)
Reporting by Tom Westbrook; Editing by Paul Tait