Rarely — perhaps never — has a contest over hosting the Olympics gone to this level. Barack Obama lands in Copenhagen on Friday morning to become the first US president to address an International Olympic Committee session.
In a contest that could well become its own Olympic sport, Obama will be joined by leaders of the three other countries competing for the right to stage the 2016 Olympic and Paralympic games. The US president will speak on behalf of Chicago, which is competing against Madrid, Rio de Janeiro and Tokyo to be chosen as host city.
Other leaders include Brazilian president Luiz Inacio Lula da Silva and Japan’s new prime minister Yukio Hatoyama. Madrid meanwhile claims it is trumping rival cities by sending in both King Juan Carlos and Spanish prime minister Jose Luis Zapatero for the IOC’s decision later on Friday, reports Reuters.
Amid the hype and suspense, SeekingAlpha has come up with nine ETF plays for the IOC’s announcement, explaining:
The opening ceremonies for the 2016 games are still more than six years away, but the winning nation could see an economic boost long before the opening ceremonies… While estimates for the cash generated for hosting the games vary greatly, most economists agree that winning the right to host the games can provide a boon to almost any economy. As the very competitive race draws to a close, we take a look at several ETFs that could post gains following the final vote.
SeekingAlpha’s ETF choices include: For Madrid plays, iShares MSCI Spain Index Fund (EWP) (which “invests in stocks of 30 Spanish companies, with a tilt towards large cap equities and the financial sector”).
For Tokyo: SPDR Russell/Nomura Small Cap Japan ETF (JSC) (which “offers diversified exposure to small cap companies operating in Japan, with its three largest allocations going to industrials (23 per cent), consumer discretionary (21 per cent), and materials (15 per cent), three areas of the economy that could benefit from a winning bid”).
For Brazil: The Market Vectors Brazil Small Cap ETF (BRF) (which “invests exclusively in small cap firms”, offering “exposure to the ‘real Brazil’ including home building and consumer goods firms).
And for Chicago: The PowerShares Dynamic Building & Construction Portfolio (PKB) (whose “list of holdings is full of firms that would likely have an opportunity to bid on major construction projects throughout Chicago that would need to be completed prior to the games”).
According to Reuters, bookmakers have Chicago as the odds-on favourite, thanks largely to the Obama effect on IOC voters. The White House said he had been lobbying IOC members from Washington and, adds Reuters, “there is no doubt that the Obama factor weighs heavily and has ensured Chicago takes the role of front-runner”.
Meanwhile, as Bloomberg reports this week, a study from the Mannheim-based ZEW economic institute finds that claims that in the five days following the award of the hosting of an Olympics the stock market of the new host gains an average of 2 per cent. But as SportsBiz blog argues, with the exception of the recent games staged in America, “almost every Olympics in the last 30 years or more has lost money, often considerable money”.
FYI, the vote begins at 1510 GMT (11:10am EDT) and IOC president Jacques Rogge will announce the winner in a globally televised ceremony starting at 1630 GMT (12:30am EDT).
Related links:
2016 Olympic winner’s stock market may get a boost – SportsBiz
Four international ETFs for the fourth quarter and beyond - SeekingAlpha