When New Zealanders hit the polls on Saturday, investors will be focused on whether changes to consumer, construction and agricultural policy will help revive one of Asia’s worst-performing stock markets.

Opinion polls suggest the opposition National Party, which has proposed tax cuts and farmer-friendly policies, is poised to defeat the ruling Labour Party during the country’s general elections. Whoever wins will inherit a stock market in the doldrums as a cost-of-living crisis, a real estate slump and China’s rocky recovery weigh on the local economy.

The benchmark S&P/NZX 50 Gross Index has slid 5.2% so far in the second half of the year, one of the worst regionally and underperforming most Asia Pacific peers.

Sectors such agriculture and construction “are areas where there are some differing policies on the table,” Zoe Wallis, an investment strategist at Forsyth Barr Ltd., wrote in a note.

Here are the main equity market implications in the run up to the election:

Consumer

Christopher Luxon’s National Party is offering tax cuts to families and middle-income voters as it vies to unseat Prime Minister Chris Hipkins.

Consumer and retail-related shares may benefit from National’s proposed changes to income and fuel taxes, which could increase some people’s disposable income, UBS Group AG analysts led by Nic Guesnon wrote in a note.

The Labour Party said it will exempt fruit and vegetables from the Goods and Services Tax if it wins a third term. Food prices have soared in a post-pandemic bout of rampant inflation, exacerbated by a cyclone in February that destroyed orchards, vineyards and farm crops in some of New Zealand’s most productive areas.

Supermarkets and food suppliers could be impacted by the GST changes, including meal-kit company My Food Bag Group Ltd. (YTD -59%)

Property

Meanwhile, the party’s tax blueprint would also allow interest deductibility on rental properties. The policy is positive for building materials companies such as Fletcher Building Ltd., as well as major banks and property investors, according to Anna Milne, an analyst at Wilson Asset Management in Sydney.

Read: New Zealand’s Main Opposition Party Unveils Tax-Cuts Policy

Key stocks to watch: Fletcher Building (YTD +3.4%), Stride Property Group (YTD -2.8%), Westpac Banking Corp. (YTD -8.2%), ANZ Group Holdings Ltd. (YTD +6.3%), Warehouse Group Ltd. (YTD -32%)

Agriculture

The National Party’s vow to give farmers more time to adapt to a tax on farm emissions would be slightly positive for the agricultural sector, Forsyth Barr’s Wallis wrote.

Weaker China demand for dairy products has hampered dairy shares such as a2 Milk Co Ltd. and Synlait Milk Ltd. China’s economic downturn has also curbed demand for commodities such as meat and milk, hampering the stock market’s consumer sector.

Key stocks to watch: a2 Milk (YTD -39%), Synlait (YTD -61%), Sanford Ltd. (-2.2%)

--With assistance from Ainsley Thomson and Matthew Brockett.