SINGAPORE, May 28: The approaching World Cup finals are stirring mutterings among some dealers and strategists about the potential negative impact the tournament could have on Asian markets.
Unlike four years ago when the World Cup was held in Japan and South Korea, matches will not be in regular office hours here, meaning workers won't be downing tools to watch.
But with games broadcast across Asia late evening or in the early hours of the morning, there are concerns about bleary-eyed brokers turning up for work late, tired or not at all, and investors being too preoccupied to focus.
“Trading will very likely slow down during the World Cup because investors are too busy watching the games,” said Sukhbir Khanijoh, a senior market analyst at Trinity Securities in Bangkok.
“They simply lack interest in stock trading during that time because the World Cup is hugely popular in Thailand.”
During the 2002 World Cup (May 31-June 30), the Stock Exchange of Thailand slipped 4.34 percent.
On days when popular teams are in action, like England or Brazil, the hit could be harder.
In Singapore, when England played Nigeria at the last World Cup, turnover on the market plunged and the Straits Times Index fell 11 points on a lack of buying interest.
When England played Brazil it was even worse, with shares traded plunging to the lowest level since the 1997-98 Asian financial crisis, according to the business press here.
Despite the warnings, not all market watchers are convinced the World Cup will impact trading levels.
“Investors have to go to work too; we have money to make. The rationale that the World Cup will cause a market slump is not scientifically proven,” said Ben Kwong, head of research at KGI Asia in Hong Kong.Andes Cheng, associate director of South China Securities, believes markets will come down during June and July but the World Cup will be only one of several reasons.
“After huge profit-taking (in Hong Kong), they now have to sit down and look at other markets and commodities before deciding what to do with the money in the next half year and plan their next move,” he said.
“It's not surprising that the market will be quiet next month. Sure football will affect the market a bit but we are talking about making money.
The extent of the impact won't be much.”
Analysts in Tokyo dismissed outright concerns that the football would hurt the market there.
“I don't think there will be a negative impact on the market,” said Ryuta Otsuka, strategist at Toyo securities.
“The Japanese don't usually get so excited that the influence carries over to their work the day after a match.”
It appears to be a similar scenario in South Korea where Kyobo Securities analyst Yoo Woo-Hyun said hard-headed local investors will be watching their bottom lines more than soccer score lines.
“It will be business as usual during the World Cup. The most prominent factors that will affect the market will be the economic trend and fundamentals as usual,” he said.
Stocks did slide during the World Cup four years ago but experts said it had little to do with South Korea's astonishing run to the semifinals.
“The market was on a downward cycle after hitting a peak and investors were reacting to global and domestic economic factors, not the soccer,” said Hana Securities analyst Cho Yong-Hyun.—AFP