World Cup: Qatar cools stadiums and warms fans' homes

The FIFA World Cup kicks off in Qatar on Sunday, and the Polish national team will play its first match on Tuesday. However, one cannot ignore the fact that the championship is also an important economic event. Qatar - on the one hand - due to weather conditions, has to air-condition stadiums, and on the other hand - as the largest exporter of LNG gas - it heats the homes of many fans.

A $30 billion business – in Europe alone

The soccer world cup is held once every four years. It is a great sports event, but also a huge financial event. This year's host of the championships - Qatar, has invested huge funds in this event. World Cup infrastructure spending alone totaled $200 billion.

Therefore, even under the influence of sports emotions, we should not forget about the economic dimension of the championship and the fact that by investing money, we can do it in such a way as to benefit from the increased interest in this event and football. This is because it is estimated that almost every second inhabitant of our planet will be interested in the championship (in 2018, the championship was watched by 3,1 billion viewers). And in Europe alone, the football business is worth over $30 billion.

So how do you try to fine-tune your investments for the upcoming championships? First, you can focus on the companies that sponsor and partner the championship, such as Coca-Cola, Visa or Hyundai. Sportswear retailers such as Nike, Adidas and Puma, as well as breweries (Anheuser-Busch, Heineken, Calsberg) will also do well during this period, as beer consumption increases strongly during this period.

READ: The cost of beer production increased by 62% in 2 years

Interestingly, there is evidence that winnings in sports can influence general stock market sentiment and even individual stock market performance, turnover or consumer behavior. This year's edition of the Championship takes place on a non-standard date, which - due to the approaching Christmas - may intensify such effects. This also applies to the situation on the stock exchange itself; the summer months are usually a period of worse results, while the end of the year is the case S & P500 index (but also other indices) the period of the strongest increases.

World Cup full of controversy

The host of the championships - Qatar, on the one hand, built stadiums that must be air-conditioned due to high temperatures. On the other hand, by exporting gas, it helps to heat the homes of football fans around the world. Qatar (and Australia) are the world's largest exporters of liquefied natural gas (LNG). LNG is also imported to Poland via the LNG terminal in Świnoujście, securing about 20 percent of gas. Polish demand for natural gas.

For Qatar, LNG accounts for 85 percent. exports of this country, and the revenue from these exports in the first half of this year amounted to USD 55 billion. Qatar's partner in gas exports is the company Exxon Mobile.

Middle Eastern stock exchanges account for only 1 percent. world market capitalization. But this year they are doing very well, and their average rate of return over the past 10 years is above the global average. Stocks of companies in these markets benefit from high energy prices, basing most of their contracts on the - at the moment - strong dollar and spending on infrastructure built for the World Cup.

About the author

Pawel Majtkowski - analyst eToro on the Polish market, which shares its weekly commentary on the latest stock market information. Paweł is a recognized expert on financial markets with extensive experience as an analyst in financial institutions. He is also one of the most cited experts in the field of economy and financial markets in Poland. He graduated from law studies at the University of Warsaw. He is also the author of many publications in the field of investing, personal finance and economy.