Prices and market shares are known for being unpredictable and volatile. However when they are analysed thoroughly,there are opportunities to gain large profits for anyone willing to make an investment. Working out how much risk is involved is imperative, as is weighing that risk against the potentialreturns. It is also vital to rememberthat external events can also cause market shares to fluctuate.
Sporting events such as the Rugby World Cup (RWC) can have an immense impact on the stocks and shares market, as sponsors and spectators both have an effect on values. For example, during the 2007 Rugby World Cup when South Africa won the Webb Ellis Trophy, IG’s research discovered Forex markets saw the ZAR go up in value by 4.3 per cent against the US Dollar and 7 per cent against the Great British Pound. It wasn’t only currencies that were affected by the tournament, as SABMiller share prices enjoyed a 7.5 per cent increase over the course of the competition.
Over the next six weeks, we will watch a multitude of games featuring strength,speed and sportsmanship that will enthralspectators all over the world. Host nations always tend to perform well, which ensures that England stands a good chance of winning the tournament, while other favourites include defending champions New Zealand and South Africa. A whopping total of £982 million is predicted to be added to the GDP in the UKas a result of this year’s rugby, while a further £85 million has already been invested in various infrastructure projects and 41,000 jobs have been created.
Leisure and hotel groups are set to benefit the most from the competition, as a surge in international visitors is always guaranteed. This ensureseverything from travel to food and beverage outlets will all profit. Retailers that have a license to sell official rugby merchandise will also enjoy a boost in their revenue and the additional income will help to strengthen the pound. During this year’s Rugby World Cup, The Coca Cola Company has a market cap of over $180 billion, making itlikely to be the competition’s most valuable sponsor.Together with listed sponsors, partners and suppliers, it proves just how much money is wrapped up in huge sporting events such as the RWC.
At first glance, stock markets are notoriously tricky to fathom and making predictions is something that should be left for professional stock traders. However, changes and emerging trends can be identified through major sporting events, and only time will tell who will come out of the 2015 Rugby World Cup victorious – both on and off the pitch.