Stocks set to benefit from the FIFA World Cup: HSBC
November 21, 2022
There will be winners and losers at this year’s FIFA World Cup — both in the stadium and stock market. Companies in Qatar and the surrounding region will be jockeying for business from the 1.5 million soccer fans expected to arrive in the country. Analysts from HSBC Global Research think regional food and beverage giants Alamar Foods, Agthia Group and Almarai are among those set to cash in on the tournament. Aviation fuel provider Qatar Fuel and hotel operator EMAAR Properties also made the bank’s list of beneficiaries. But risks remain for investors, highlighted by the Qatari government’s last-minute ban on sales of all beer at and around World Cup stadiums. The conservative, gas-rich Muslim nation does not entirely ban alcohol for visitors, but its sale and consumption are strictly controlled. The reported decision throws the tournament’s $75 million sponsorship by major beermaker Budweiser, which Anheuser-Busch owns, into question and is set to anger many organizers and attending fans already frustrated over new restrictions to the 92-year-old event. Tourism spending Putting the controversy to one side — and there has certainly been some controversy — the sheer number of visitors to the region mean that a number of regional companies are likely to benefit. Qatar’s population of roughly 3 million is less than a third of New York’s or London’s metropolitan areas. And its capital Doha is limited to hosting visitors, as it has just 30,000 hotel rooms. This means that a “substantial” number of tourists will “spill over” and travel to other regional hubs such as Dubai and Abu Dhabi, according to HSBC. Tourism spending over the soccer season is expected to be about $4 billion, with most spent in Qatar. Still, Dubai is expected to be the next biggest beneficiary, according to Market research firm Redseer Strategic Consulting. Emaar Properties is likely to be a big beneficiary of this demand. The Dubai-listed company, which operates 6,000 hotel rooms and destination shopping malls across the city, should see a rise in sales over the period, according to HSBC. The investment bank expects shares in the company to rise by 23.2% to 7.60 UAE Dirhams ($2.07). Qatar Fuel, the exclusive jet fuel supplier in Qatar, will likely benefit from the World Cup almost immediately. Over the long term, HSBC predicts steady growth in air traffic given the expansions at Qatar Airways and Doha’s airport. The investment bank gives Doha-listed shares of Qatar Fuel 21.8% upside. Feeding and quenching fans’ thirst will also be big business in Qatar and the surrounding region. HSBC says Saudi Arabia-headquartered Alamar Foods Company, a franchise operator of Domino’s Pizza and Dunkin’ Donuts for the Middle East region, “may benefit due to the increased consumption of fast food during the World Cup.” The investment bank expects shares in the Riyadh-listed company to rise by 10.8% to 164 Saudi riyals ($43.64). Similarly, HSBC expects another Riyadh-listed baker Almarai to cash in on the tournament and see its shares rise by 12.9% to 64 riyals a share. Meanwhile, the investment bank gives Abu Dhabi-listed beverage maker Agthia 61% upside. The World Cup won’t just benefit consumer companies in Qatar and the surrounding region, but the world over. For example, during the 2018 World Cup, food delivery firm Zomato in India received three times as many orders as on a regular day during crucial matches. — CNBC’s Natasha Turak contributed to this report