The four-year World Cup feast is here once more. The opening match of this year’s World Cup in Qatar will start at 0:00 on November 21 (next Monday). The first match will be Qatar vs. Ecuador.
Although the World Cup is an exciting visual feast for fans around the world, for the capital market, the performance of the stock market during previous World Cups was often unsatisfactory. Will this year’s “World Cup Curse” come true? ?
World Cup concept stocks frequently change
The World Cup is approaching, and football concept stocks are repeatedly active. Guangdong Media, China Sports Industry, Double Elephant, Aoto Electronics, Rheinland Sports, Xinghui Entertainment, etc. have frequently changed this month and have attracted the attention of market funds.
Take Guangdong Media, a football lottery concept stock, as an example. Since November 16 (this Wednesday), the stock price of Guangdong Media has continued to rise by the limit, and it rose by the limit once more yesterday, with a weekly increase of 32.18%. According to public information, Guangdong Media has the business of , sales, printing and series of media operations, and also has the concept of football and sports lottery in the secondary market. Pioneer News, a wholly-owned subsidiary of the company, as the sports culture industry of Guangdong Media, has two professional sports newspapers “Football” and “Basketball Pioneer News”, Football + App, Football + Mini Program, Football News Official Weibo, WeChat Official Account Football News and other new media platforms. In addition, Guangdong Media has also cooperated with Tianxia Technology to develop the lottery purchasing service platform “Cloud Lottery”, which covers PC and mobile terminals, which makes the stock price of Guangdong Media frequently perform before the start of this year’s World Cup in Qatar.
Yanjing Beer in the beer sector has increased by more than 25% this month. Yanjing Beer is the fourth largest brewer in China (accounting for 9.5%), and its market share in Beijing, Guangxi, Inner Mongolia and other places exceeds 70%. The company stated that “themed activities have been launched many times during the previous World Cup”.
The World Cup concept stock Xinghui Entertainment has also received the attention of market funds in the near future. The stock began to break through and rise on November 7, and rose by 8.97% that day, and then maintained a strong upward channel all the way. According to public information, Xinghui Entertainment has acquired 99.61% of the shares of Espanyol Football Club, and is the first A-share listed company to control top clubs in the five major European leagues.
Will the “World Cup Curse” come true this year?
Veteran stockholders know that there are all kinds of “curse” in the A-share market, such as “two barrels of oil curse”, “4.19 curse”, “fund 88 curse”, “investment strategy meeting curse”, etc. There is the “World Cup Curse” to be mentioned shortly.
So, what exactly is the “World Cup Curse”? It is said that the overall performance of the stock market during the start of the World Cup is generally not very good, and most of them end in decline.
Taking the A-share market as an example, during the 7 World Cups from 1994 to 2018 (the World Cup is held every 4 years), the A-share market fell 5 times and rose only 2 times, with a probability of 71%.
Specifically, during the World Cup in the United States in 1994, the Shanghai Composite Index fell by 18.3%; during the World Cup in France in 1998, A-shares fell by 0.7%; in the 2010 World Cup in South Africa, A-shares fell by 3.6%; in the 2014 World Cup in Brazil, A-shares fell by 0.4%; During the 2018 World Cup in Russia, A shares fell 7.2%. The year when A-shares rose during the World Cup was the 2002 World Cup in Korea and Japan. Shares also rose, rising 8.7%.
A more mainstream explanation for the reason for the “World Cup Curse” is that investors, especially institutional investors (including fund managers and traders), were distracted during the World Cup, resulting in relatively deserted transactions in the financial market. However, the above explanation lacks sufficient rigor. The reason is that there is no strong internal connection between the World Cup and the stock market. In addition, the sample size of the above data points is too small. Statistically speaking, the conclusions drawn from small samples are often not reliable enough. It is accidental.
Looking at the performance of industry sectors, although the A-share market as a whole will not perform well during the World Cup, some sectors are exceptions, such as sports lottery, beer, and household appliances (big-screen TVs). “It is very logical for such a phenomenon to appear.” An investment consultant from a related brokerage in Hangzhou said, “The most closely related to the World Cup are beer and lottery tickets. However, this year’s World Cup in Qatar is held in a special time in winter. It’s in the summer, so it remains to be seen how justified it is for the beer sector.”
In addition, Everbright Securities has also compiled a list of some listed companies that have deeply participated in the World Cup in Qatar, including Hisense Home Appliances, Hisense Video, Skyworth Digital, Gree Electric, Lehman Optoelectronics, Jinggong Steel Structure, Alto Electronics, Fengshang Culture, Unilumin Technology , Xinghui Entertainment, Zhongtong Bus and other companies. The performance of these listed companies during the Qatar World Cup this year is also worth looking forward to by investors.
