Major Fifa World Cup sponsors outperform FTSE 100 returns by a factor of five and the S&P 500 by three as brands look to dominate the conversation during the tournament.
IG research looking at the performance of major World Cup sponsors saw an average return of 7.1 per cent during tournament cycles – from 30 days before the first match to three months after the tournament across the last four editions – versus a 1.9 per cent increase on return for the US stock market.
Across the same period the London-based FTSE 100 had an average decline of 1.1 per cent.
Apparel brands appear to be the most lucrative markets. Nike saw a surge to the tune of 17.7 per cent, while rival Adidas averaged a 1.6 per cent increase.
Kia (12 per cent), Coca Cola (8.6 per cent), and AB InBev (7.9 per cent) all outperformed the World Cup average of 7.1 per cent.
World Cup a growth market?
Chris Beauchamp, chief market analyst at IG, said: “The World Cup creates a unique environment where a small group of globally recognised brands capture a disproportionate share of attention – and that visibility can feed through into stronger stock performance over a relatively short period.”
The negative FTSE 100 performance stems from the 2014 and 2018 windows, while this year’s World Cup, coming amid a conflict in Iran that is damaging global oil supply chains, could also see figures impacted.
Added Beauchamp: “It’s particularly interesting when you set that against the traditional ‘Sell in May’ narrative, where markets are often expected to drift or soften over the summer months. What we’ve seen is that World Cup sponsors can cut against that trend, with tournament-driven demand, marketing spend and consumer engagement helping to support share prices at a time when the wider market can lack direction.
“What stands out is the gap between these companies and the broader indices. Even in years where markets have struggled, sponsor-linked stocks have often been able to outperform – although not without volatility, and with outcomes still heavily influenced by timing and wider market conditions.”
- Matt Hardy
