New research published by the Paris-based equity strategy team at Societe Generale suggests the common assumption that the (non-American) football World Cup has a positive economic impact on the host and winner countries is actually false.

Sure, the host usually sees improved GDP growth and subsequent stock market performance, but links between market performance and performance on the pitch are elusive.

So the SocGen team are suggesting a couple of pairs trades:

Go long the JSE South Africa index and short the Brazil Bovespa or long the JSE and short the Argentina Merval.

Which struck us as odd, since according to William Hill the latest betting favourite to pick up the FIFA World Cup is actually Spain, at 9/2.

Maybe the French bank feared a paranoid backlash from southern Europe…

There’s also Britain (sell gilt-edged and wager the proceeds?) at 5/1, along with Brazil at the same price. Argentina is out at 9/1.

Either way, SocGen are also offering the 2010 World Cup basket – 16 stocks that have performed well ahead of past competitions, beating the DJ Stoxx 600 by 13.6 per cent in the period around the five World Cups between 1990 and 2006.

Full details in the usual place.

This entry was posted by Paul Murphy on Monday, February 8th, 2010 at 20:15 and is filed under Capital markets. Tagged with societe generale, Spain, world cup. Edit this entry.