Markets upbeat on Australia vote

Investors hope the PM's re-election will bode well for media companies

Hopes for a fresh round of economic liberalisation following the re-election of Australian prime minister John Howard have boosted shares.

Australia's All Ordinaries index set new highs for the second day running on Tuesday, closing up 0.3% at 3,727.

Investors are looking in particular to the reform of ownership rules within the country's media sector.

Mr Howard's centre-right coalition is also expected to press ahead with the privatisation of telecoms firm Telstra.

Mr Howard's coalition was returned to office on Saturday for a fourth term with an increased majority in the lower house and is on course for a possible 38-seat blocking majority in the Senate, although final results are not expected until later this month.

Privatisation fears

Analysts estimate that the Australian government could raise about A$30bn ($22bn; £12bn) from the sale of its remaining 51% stake in Telstra.

The government has been trying to privatise (Telstra) for a number of years now, but has been thwarted by the unfavourable senate situation. This is back on the agenda now Richard Gibbs, head of economics, MacQuarie Bank Check Australia's All Ordinaries index

The ruling National-Liberal coalition has already sold two chunks of Telstra since coming to power in 1996.

But rival parties in the country's upper house - the Senate - blocked attempts at a full privatisation, which, opponents said, would endanger rural telecom services.

Proceeds from the sale of Telstra could go towards funding government infrastructure projects and meeting some future pension costs, Richard Gibbs, head of economics at MacQuarie Bank in Sydney, said.

"The government has been trying to privatise (Telstra) for a number of years now, but has been thwarted by the unfavourable Senate situation. This is back on the agenda now," he told the BBC's World Business Report.

Media ownership

Analysts also expect that restrictions, which currently bar the cross-ownership of dominant television and newspaper interests in major Australian cities, could be loosened.

"That has certainly got equity brokers excited about media stocks," Mr Gibbs said.

Shares on Australia's SP/ASX 200 index also closed higher on Tuesday, up 11.6 points at 3,717, surpassing Monday's record close of 3,705 points.