Anyone with any experience of trading stocks and shares will know how volatile and impossible to predict the market can be. It takes nerves of steel, a fast mind, a wealth of knowledge and no small degree of luck to make quick, intelligent decisions that consistently deliver financial success.
The value of an investment in any organisation can and will be affected by a myriad external forces. Political developments, exchange rates, cultural factors and even natural disasters, war and conflict are just a few of the unknowable future events that can impact an investment positively or negatively. No investment therefore can be considered in isolation.
Other occasions that can be a catalyst for change when it comes to investment are mega sporting events. The sponsors who back global sports tournaments and competitions, the spectators who watch them and the fortunes of the key sporting personalities as they progress, can all have major financial implications on the Forex markets both for big corporations and for individual speculators.
One such example of this phenonomen came in 2010 with the FIFA World Cup, which was hosted by South Africa. Even in the run up to the event, the world was pumping in a frenzy of football mania. During the few years before the event, South Africa became a construction hot-spot with new infrastructure being put in place to meet the logistical demands of the hosting world’s largest football tournament. Accordingly, the price of property and building stocks soared. Stocks listed on the Johannesburg Stock Exchange began to move in previously unseen ways.
As well as bolstering the value of investments in areas like leisure, alcohol and hotels, the FIFA World Cup 2010 also had a dampening effect. Trading activity dropped during key matches simply because traders were attending them. Meanwhile, some investors were unsettled by how much the tournament was costing and neglected to maintain their usual levels of activity. Essentially, by hosting this massive event South Africa shook up both its own and global markets including Forex, the world’s largest financial market.
Right now, another huge sporting event has the world gripped – the Rugby World Cup, which is taking place across the UK in stadia from Cardiff to Newcastle, Birmingham to London. Whoever comes out on top there will be major financial implications. When England last won the Rugby World Cup in 2003, the FTSE 100 and sterling both gained in strength, and sponsors can expect to see share prices bolstered through their involvement in this year’s event.
Although there are many variables, and no way to predict who will be victorious on the pitch or which stocks and share will prove to be flavour of the day, we can say with certainty that the Rugby World Cup 2015 will have both positive and negative ramifications that reach far further than the ticket office.
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