Carbon tax and CFDs
The carbon tax in Australia will enter into action on the first of July 2012. Will it be an opportunity or a threat for your CFD trading? It will certainly affect how companies behave. How much businesses can produce without paying higher taxes? How much will be needed to cover pollution costs? Fundamentals will change. Companies values will increase or decrease. Predicting winners and losers is yet impossible. At the moment, it is all speculation.
Companies like Macquarie Group are gearing up for new available opportunities and so are traders. If you are into CFDs and know what you are doing, an exciting period is ahead in the charts, at least, theoretically.
Currently, Capital CFDs is one of the providers that offers the opportunity to trade carbon emissions in their commodities market.
Below is Capital CFDs chart of carbon and its trading price. As you can see, it is definitely something to look forward to… trading.
New opportunities to invest in.
While there has been a negative and political welcome to the carbon tax; a number of companies have increased their investment into renewable energy. Adding to your portfolio companies from the renewable sector is recommended. But also keep a watch-list of the traditional bluechips. Bluechip companies are the ones with the capacity to make an impact in the carbon market.
New opportunities include landowners generating carbon offsets under the Carbon Farming Initiative. Retailers, producers of energy efficient products and environmental service providers. These types of businesses will be in demand as consumers shift towards low emission products. Business with lower emissions will not suffer from high carbon taxes. Most importantly, companies in the renewable energy business might become takeover targets by the big fossil fuel companies.