The equity landscape around the 2018 FIFA World Cup

The equity landscape around the 2018 FIFA World Cup

Picture of Peter Garnry
Peter Garnry

Chief Investment Strategist

Photo: A.RICARDO / Shutterstock.com

Financial markets are quite efficient, reflecting all information available. It is tempting nonetheless to look at some relevant stocks that might recieve some economic benefit from the 2018 FIFA World Cup.

If we start with the partners, sponsors, and regional supporters we find that most of them are publicly listed companies:

   • Adidas
   • Coca-Cola
   • Gazprom
   • Hyundai Motor
   • Visa
   • Anheuser-Busch InBev
   • Hisense Kelon (subsidiary of Hisense)
   • McDonald’s
   • China Mengniu Dairy
   • Alrosa (Russian diamond mining group)
   • Rostelecom (Russian telecom)

Of the stocks above, it's our view that the companies featuring the best economic exposure to the World Cup are Adidas and China Mengniu Dairy. Adidas will get massive exposure and being a fast-moving consumer goods brand, sales could easily be impacted positively from the event. The market, however, will not be able to efficiently price this ahead of the World Cup so there is likely a mispricing either way in the stock.

China Mengniu Dairy is a less obvious case. The company signed a FIFA sponsor contract in December and will provide a World Cup drinkable yoghurt in China on top of the largest expected advertising budget. With Chinese president Xi Jinping’s pledge to make China big in football, it is also something of a national goal: there will be a lot of focus on the World Cup in China despite the fact that the country did not qualify.

China Mengniu Dairy weekly stock price over the past five years
China Mengniu Dairy (five-year, weekly)

China online ads bonanza

The biggest online advertising spending is expected to be in China with estimates putting it at around $835 million, according to media group Zenith. While this may be a small number compared to the annual Chinese online advertising spend of $80.4 billion, it can still move something for advertising platforms.

Baidu is the biggest player in PCP advertising through its search engine and affiliated networks. Tencent – increasingly big in online ads on mobile – could also emerge from the advertising bonanza as a winner.

Sports betting

Besides online advertising, we expect sports betting to see a positive impact from the World Cup. Some of the largest publicly listed companies are GVC Holdings, William Hill, Playtech, Kindred Group, and Betsson.

Other categories

The obvious large category outside the aforementioned is beer companies, but the tournament is too small and only lasts for a month so we don’t expect any meaningful upside or impact from the World Cup on brewers. The previous World Cups have not shown any signs of significant demand upside on beer.

On Monday we will start making predictions on the first matches for our equity market World Cup challenge.

It all starts next week on Thursday with the opening match between Russia (Gazprom) and Saudi Arabia (SABIC).

Quarterly Outlook

01 /

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

Content disclaimer

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank A/S and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

Please refer to our full disclaimer and notification on non-independent investment research for more details.

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

Contact Saxo

Select region

International
International

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.