Bloomberg News

London Olympics to Boost FTSE 100 Over the Next 12 Months

August 21, 2012

(Corrects to say percentage points in second and fourth paragraphs.)

The U.K.’s FTSE 100 Index may outperform the MSCI World Index in the year after London hosted the Olympics as increased publicity attracts investor attention to the market, according to Saxo Bank A/S.

The CHART OF THE DAY shows that the total return on the benchmark indexes of the U.S., Australia, Greece and China, hosts of the four past summer Olympics, beat the MSCI World by at least 14 percentage points.

“The outperformance has to do with the publicity the Olympics generate for the country and the city, which then serves as publicity much like for a regular company and may cause investors to be more inclined to invest in the country’s stocks,” Mathieu Bolduc, an equity analyst at Saxo Bank in Copenhagen, said in a telephone interview on Aug. 14. “From a historical perspective the odds are very good for the FTSE 100 to outperform after the London 2012 games.”

The Standard & Poor’s 500 Index’s total relative return exceeded the MSCI World Index’s by 24 percentage points 381 days after the first day of the Atlanta Olympics in 1996. The relative return for Australia’s S&P/ASX 200 Index was 27 percentage points more after the 2000 games in Sydney, while that for Greece’s ASE Index was 28 percentage points more after Athens hosted in 2004. The Hang Seng Index’s return was 15 percentage points more than the world index over the same number of days after the 2008 games in Beijing.

The FTSE 100 has rallied 3.2 percent since the start of the Olympics on July 27, compared with the MSCI’s 2.9 percent gain.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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