Market Impact of the Rugby World Cup

Did you know that major sporting events – including the Olympics, Ashes and World Cups – can coincide with movement across indices, currencies, stocks and more? The team at IG looked at what we can expect from this year’s World Cup when it comes to market impact.

It turns out that there are huge benefits for sponsors, currencies and indices. Last year, Coca-Cola’s sponsorship of the FIFA World Cup coincided with some impressive increases in its share price. The jubilation of a sought-after cup victory – or disappointment of a missed opportunity – can affect traders as well as players and fans. England’s rugby world cup victory came in 2003, and coincided with a major rally for the FTSE and the pound.

Many of us experienced the sense of optimism that followed South Africa’s victories in the 1995 and 2007 world cups, as well as the excitement of hosting the 2010 soccer world cup.

IG analysts Travis Robson, Leigh Riley and Shaun Murison provide insightful answers to the question “Which markets might be affected by the rugby world cup?” They also look at the following:

• Have any recent major sporting events impacted markets?
• What markets might be influenced by the rugby world cup 2015?
• Which companies will you be keeping an eye on during the rugby world cup?
• Which of the sponsors will you be following during the rugby world cup?
• Who do you want to win the rugby world cup and who do you think will win?
• Which markets/companies do you think will benefit most if South Africa win this year?

South African companies that will be positively impacted include SABMiller (a lot of beer will be drunk), local retailers like Woolworths, Pick n Pay, Shoprite (from all the braais), as well as Clicks, Dis-Chem and pharmacare/pharmaceutical stocks (to deal with the inevitable hangovers). A lot of these companies will benefit from a stronger pound as they earn offshore revenue.

When it comes to investing, it’s worth paying extra attention to the sponsors during upcoming sporting events.