Trading the Markets During the World Cup
|
|
|
|
|
|
|
Financial Spreads, the London based spread betting company, have released their guide to trading the stock markets around the 2010 World Cup.
According to Financial Spreads there are a variety of sectors that look promising. Naturally the bookmakers, the pub chains and retailers who sell England merchandise are worth investigating.
According to Adam Jepsen, a spokesman for Financial Spreads, “The problem with trading shares around the World Cup is that much of the positive effect of the tournament will already be priced into the shares. Also if England perform poorly, or if they are just plain unlucky, then some of the more obvious buys become sells.
“Having said that, with Financial Spreads you can speculate on stock markets and shares that are listed in some of the more consistent countries.
“For example, looking at German shares an investor could speculate on the Adidas share price to increase. And there won’t be much getting away from Adidas this summer. They sponsor both Germany and France, they are official FIFA partners, they sponsor players like Lionel Messi and David Villa. They even supply the match balls”.
It is also possible to spread bet on other European shares such as Carlsberg, however, the Danes are not the 2010 sponsors. In contrast, the US stock market does supply a few sponsors in the form of McDonalds and Coca Cola.
Another option is speculating on the South African Stock Market to perform well. During the more recent World Cups the host nation’s leading stock market index has performed well around the tournament.
|
|
(prices as of 12.15pm, 7 June)
|
Looking closer to home though, the shares of the various UK bookmakers are tempting but there are a few pitfalls. If England do not progress beyond the Group Stage then revenues will certainly be down. If England were to win the World Cup and Rooney were to pick up the Golden Boot, not an inconceivable combination, then the bookmakers could be facing some rather damaging payouts.
An Irish bookmaker like Paddy Power with less England specific exposure could be a less risky trade. Having said that Paddy Power also have a sports hedging business whereby a firm, eg a Furniture Company, offers its new clients a discount if England win the World Cup. The Furniture Company then hedges off that risk with Paddy Power. This additional exposure makes these particular Irish shares a less tempting proposition.
Elsewhere, the UK’s pub chains should experience reasonably brisk trade but again much of the upside could already be priced into the shares and there might be better value elsewhere.
“Looking at the more traditional sports retailers like JJB and Sports Direct they also have positives and negatives. They should see increased England shirt sales but the supermarkets are increasingly active in that market. Tesco are even an official England sponsor for 2010. The extra sponsorship, shirts sales and merchandise should give the shares boost. Also the other positive for Tesco is that if the England team enjoys a good run that should further boost alcohol sales.
“Adidas should not be ruled out and neither should trading the South African Stock Market however Tesco does have a few more strings to its bow. The supermarket also has fewer downsides and for that reason it is probably the stock to watch out for.” concluded Jepsen.
Financial Spreads Account / Website |
|
|
Risk Warning:
Spread betting, CFDs and margined forex trading are leveraged products which carry a high level of risk to your capital. You can lose more than your initial deposit so you should ensure spread betting, CFDs and margined forex meet your investment objectives and, if necessary, seek independent advice.
'Trading the Markets During the World Cup' edited by DB, updated 15-Jun-10
For related articles also see:
Investing During a Bubble, updated 07-Jun-12
Financial bubbles can be extremely lucrative for traders, but they can also be extremely dangerous. To aid you, spread betting provider City Index, looks... » read feature.
Spread Betting in a Bear Market, updated 31-Jan-11
In financial spread betting, 'bear market' is the term given to a financial market which falls over a period of time. If you are a spread bettor, it is imperative that... » read feature.
Trading and the Autumn, updated 05-Oct-09
Autumn is called 'fall' in America because it's the season when the trees shed their leaves. However, many financial markets also have a tendency to... » read guide.
Stock Market Trading and the January Effect, updated 02-Jan-13
Among the many stock market clichés, the 'January effect' is one of the most well-known. The data shows that stock markets have risen in January in a majority of the years from 1984 to 2012 and overall gains for the year were... » read review.
Trading Black Swan Events, updated 19-Oct-11
The somewhat esoteric term 'Black Swan' refers to an event that has not been expected by the financial markets. A Black Swan event is difficult to predict because... » read review.
About this page:
Trading the Markets During the World Cup
Financial Spreads, the London based spread betting company, have released their guide to trading the stock markets around the 2010 World Cup. According to... » read from top.
|
|
Q) Average Trading Results?
A) Get free trading tips, offers, price updates, important news and more!
|
|
