FLGS – Global Finance Report

Is there a relationship with the movement of a soccer tournament in the stock market index? Apparently there! The brokers and fund managers simply do not see soccer mere spectacle.

The result of the match of a country in a grand football tournament like the World Cup could affect the movement of stock indices in the country. This is the result of Diego Garcia, a finance professor at the University of North Carolina, United States, in the year 2007.

Keith Wirtz, Chief Investment Officer of Fifth Third Asset Management Inc., said, Garcia still relevant research for the 2010 World Cup in South Africa (South Africa). If a country was thrown from the tournament in the early rounds, the index in such countries tend to need longer time to climb back, and vice versa.

The results of this study also states, bearish market conditions will override the 31 participants from 32 countries the World Cup. ‘When a country teams eliminated in the second half of this championship, the country’s stock index fell 0.49 percent the previous closing value. Create states that consider football as important, the failure will affect larger, “wrote Garcia.

Unfortunately, this study did not show the effects of a country’s victory against its index. However, Wirtz predict the euphoria of victory would make investors more confident to buy shares. The reason is, people will feel happy and will be spending more shares when the country won. “That’s what helps the economy. Index higher share of line with profits,” said Wirtz

Blessing the World Cup

Blessing the World Cup in 2010 against the world’s stock markets are awaited. Since April, the debt crisis in Europe and credit restrictions in China have cut off money in the stock market worth six trillion U.S. dollars. These two events have slowed global economic recovery.

In line with this research, the Managing Director of Bedlam Asset Management in London, England, Jon Compton guess would put investors bearish on the stock position of South Africa to see the possible results of this team in the World Cup. “Attention to the South African people disappear and re-investment dries up,” said Compton.

To organize this event, South Africa spent 5.6 billion U.S. dollars. This money to build and renovate the stadium and improve the transportation and telecommunications infrastructure.

Compton added that the economic downturn that would befall South Africa also experienced all the international event organizers. He predicted the economic downturn will run for six months post-termination events.

However, Bloomberg columnist Matthew Lynn argues, the possibility of flagging South African economy is still fifty-fifty. When the tournament was a success, not only South Africa, the economy of all African countries would be bright. Investors will note that African countries are capable of organizing a global event in a way that a modern and chic. “This success would bring investor interest throughout Africa,” said Lynn.

Lynn offers investors refer to the World Cup. When the Spanish champions, he recommends investors buy the euro. The reason, the weak point of this currency in Spain. As the European credit crisis, the EU is still able to bail out of Greece and Portugal, but not for Spain that are too big. “Winning the World Cup premiere in Spain could save the euro,” he said.

Conversely, when Germany became champions, Lynn requested the investors to sell euros. Tim “Panzer” in the event this time is not the best team in the history of Germany. When you win, it means this team simply relies on discipline, hard work and cooperation. Related to the European crisis, they were probably reluctant to tighten the economy for the Mediterranean countries.

If Brazil win their sixth trophy, Lynn mernpersilakan investors buy all the investment products from Brazil, Russia, India and China. Brazil Victory will remind the world at the owners of energy.