MARKET COMMENT
The World Cup Effect: Stock Market Winners And Losers

By Bruce Jackson (TMFGoogly)
June 20, 2002

Stock Market Winners

1. Pubs and Breweries

The English love a drink, and never has that passion been as evident as during the World Cup. Pubs have been packed morning, noon and night as English fans have quenched their rather large thirsts in bars across the country. Regent Inns (LSE: REG), Yates (LSE: YTE), Greene King (LSE: GNK), Allied Domecq (LSE: ALLD), Diageo (LSE: DGE) and Scottish & Newcastle (LSE: SCCN), amongst others, may all have been World Cup winners.

2. Supermarkets

Sales of bacon have been booming as football fans have taken advantage of the chance of a big greasy fry-up prior to and during the regular 7.30am games. Sales of take-out booze have also been on the rise as some fans have chosen to watch the games from the comfort of their living chair. The big 4 supermarkets - Tesco (LSE: TSCO), Sainsbury (LSE: SBRY), Safeway (LSE: SFW) and Asda - should all have seen increased sales.

3. Sports Retailers

Are you wearing the latest England replica kit? If not, why not? Many are, and the chances are they've bought it from a sports retailer such as JJB Sports (LSE: JJB) or John David Sports (LSE: JD.).

4. Drug Companies

Sporting a hangover following England's latest win? A visit to your local chemist or supermarket would be high on your priority list, as would the purchase of several packets of pain relievers. GlaxoSmithKline (LSE: GSK) could be a beneficiary, as would Boots (LSE: BOOT) courtesy of their best selling Nurofen drug. I can personally recommend it.

5. The guy on Kilburn High Road selling Irish and English flags.

He's made a fortune! I'd love to buy shares in him.

Stock Market Losers

1. Football clubs

A big loser is Manchester United (LSE: MNU). An early exit for his country plus his own mediocre form has seen the re-sale value of Juan Sebastian Veron slump from the £28.1m Manchester United originally paid for the Argentine captain. On the open market, I'd reckon they'd be lucky to get much more than £18m for Veron, and even at that level I'd personally say he's over-valued.

Manchester United have also been linked with a £30m+ move for Leeds United (LSE: LUFC) defender Rio Ferdinand. That's £12m more than he cost Leeds just over 18 months ago. Good news financially for Leeds, but expensive for the red half of Manchester.

Finally, Manchester United had to charter a private plane to go to the Far East to pick up their captain, a certain Mr Roy Keane. That cost them, but not as much as it cost him. The boo boys will be out for him come the new Premiership season, which kicks off in just 2 months time, in case you were wondering.

2. Travel companies

Unless you've recently booked a trip to Japan for the World Cup final on June 30th, the chances are you are staying put here in the UK to soak up the local atmosphere during the World Cup. Companies like First Choice (LSE: FCD), Holidaybreak (LSE: HBR) and MyTravel (LSE: MT.) may be witnessing a low level of current bookings.

3. Condom Companies

Bit of a wildcard this one, but I suspect the overall English 'love rate' may be a bit lower than usual. Early morning kick-offs may well have dampened enthusiasm, and boozed up lads and lasses may well have become incapable of performance in the post match hours. SSL International (LSE: SSL), makers of Durex condoms, may well be suffering.

4. Italy

They lost. They were unlucky, but that doesn't excuse the ungracious manner of their exit. PizzaExpress (LSE: PIZ), given their obvious Italian connection, could be a loser from this World Cup.

What Does It All Mean?

These are just some of the potential stock market winners and losers from the World Cup. There will be others. Above all, the tone of the article is very much with a large tongue in cheek.

In terms of investment opportunities, in the long-term it will mean absolutely nothing. One World Cup summer doesn't make or break a company. Enjoy the World Cup, enjoy trying to think of some short-term stock market winners and losers, but don't make investment decisions based on results over one month of mayhem.

Finally, good luck England. They'll need it!!

Bruce Jackson is an Aussie, but is supporting England in the World Cup. It would never happen in cricket. At the time of writing, he owned shares in PizzaExpress.