In his speech at the House of the Residence, the Chancellor presented a series of reforms aimed at stimulating economic growth in Great Britain. Part of this is to augment participation in ISA actions and actions.

They are called Leeds reforms. If they succeed, they could provide a enormous augment in British companies – but can they also lead to bulls for actions in Great Britain?

Growth in Great Britain

Most of the time, companies are growing by making investments. This includes the opening of up-to-date sites, taking more people, developing up-to-date products and so on.

The problem is that all this costs money. And although companies can employ their own profits, they have two options if they want to grow faster. They can either borrow (by taking the debt) or ask investors to (by issuing the campaign).

However, there are several problems in Great Britain. First of all, banking regulations introduced after a great financial crisis reduce competition among lenders, which makes the debt more high-priced.

Relatively low stock prices mean that capital emission is a costly way to obtain cash. But Leeds reforms announced by the Chancellor were designed to combat both problems.

Leeds reforms

On the debt side of the reform, Leeds try to make borrowing more competitive. First of all, this requires loosening some restrictions on smaller banks, releasing capital for loans.

As with most things, more supply means lower prices. The point is that this should translate into better opportunities for companies to implement development projects with a cheaper debt.

On the capital side, the Chancellor announced plans to encourage long -term saving to invest in shares, instead of sticking to cash. Increased demand for shares can aid augment prices.

This would mean that companies can collect more cash by spending less shares, thanks to which more projects are profitable. And the resulting augment in earnings can send stock prices even more.

Example

One example is Londonmetry property (LSE: LMP). The company is an investment fund (REIT), which expands its portfolio of industrial magazines and centers.

The problem is that REIT must divide 90% of income subject to investors as dividends. This makes them very attractive income investments, but limits their growth prospects.

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Investments in Londonmetric Property in the last 10 years have caused that his share has increased above the triple, and the long -term debt increased by 270%. Movements worked but were high-priced.

There is a risk that a cheaper debt can augment real estate prices, thanks to which the acquisitions are more high-priced. But the real estate sector looks like the potential Beneficiary of Reform Leeds.

Bull Market Ass?

Since 2008, actions in Great Britain have been tough by several things. One of them is a set of regulations that have a confined augment in earnings, and the other is the lack of interest in retail investors.

Leeds reforms are aimed at changing both parts of this. And if they succeed, actions in Great Britain can achieve a double augment from more favorable trade conditions and a larger number of investors willing to buy shares.

The sector that I consider to be a clear beneficiary is real estate – or more precisely Reit. And with a dividend above 6%, I think London’s value is worth considering at today’s prices.