The Rugby Union World Cup starts in France on September 8. Prepare for several weeks of sweaty scrums, rambunctious rucks and muscular mauls.
Favorites to win are New Zealand, though the form of the All Blacks, as the team is known, has been a bit patchy of late. Other likely contenders are France, Ireland and South Africa.
But never mind the tries and drop goals — obviously the tournament should be decided on the prospects for each nation’s stock market, which frankly is the only way England, victors in 2003, currently have any chance of winning.
Unfortunately, even then its not good for supporters of the Red Rose, reckons Hal Cook, senior investment analyst at Hargreaves Lansdown as “recent fumbles [political turmoil, stubborn inflation] and knock-ons [Brexit] mean investor confidence is lacking for the U.K.”
Some participants sadly don’t have separate stock markets, such as Wales and Scotland, and one market that may have bulldozed the others is not featuring, because the U.S. did not qualify for the tournament.
So, who would win the investment equivalent of the Webb Ellis Cup, according to Hargreaves Lansdown’s Cook.
France
EWQ
is his top pick from pool A, in which the hosts are pared with the Kiwis, Italy, Uruguay and Namibia. “[French] Luxury goods have continued to see strong demand, particularly from China. LVMH
MC,
is an example, with their share price hitting an all-time high earlier in 2023. As the home nation, a bit of ‘champagne rugby’ could help increase the expected positive economic impact from the World Cup,” says Cook.
New Zealand
ENZL
are their biggest competitor on the pitch, but Cook sees a limited challenge coming from Wellington’s stock market. “Italy is often cited as a country at risk of significant financial strain, but this is yet to occur – the opposite of their rugby, which is often deemed to be on the cusp of notable improvement, but this is also yet to occur,” he adds.
South Africa
EZA
is the choice of Pool B, which also contains Ireland, Scotland, Tonga and Romania. “An emerging economy with a young demographic, means there is potential for the ‘boks to spring into investment life. Their links to commodity prices can provide some further diversification and this is an interesting option to gain some exposure to higher risk frontier markets on the African continent,” says Cook.
Australia
EWA,
which will play Wales, Fiji, Georgia and Portugal, is the best option in Pool C. because its mining sector offers exposure to the materials needed for the booming electric vehicle sector. An ageing population alongside productivity challenges continue to make stock market gains difficult for Portugal, reckons Cook.
But the investment winner will come from Pool D, which is made up of Japan, England, Argentina, Samoa and Chile.
And the champions are……Japan!
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Similar to France, the Japanese stock market has seen a lot of positive momentum recently, says Cook, with the Nikkei
JP:NIK
hitting levels not seen since the late 1980s.
“The continued reform of their stock market rules, alongside some inflation for the first time in decades, means there are a number of tailwinds for the country,” he says.
“The amount of cash held by Japanese individuals and companies remains extremely high compared to other regions and so even if a small proportion of this finds its way back onto the investment pitch, it could be a game changer, equivalent to having 2 or 3 players return from the sin bin at the same time,” Cook concludes.
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