[비즈한국] The Olympics have returned to Paris, France, for the first time in 100 years. The Paris Olympics, which kicked off on the 26th (local time), are scheduled to continue for a 17-day journey. Usually, during the Olympic Games, global companies and sponsors engage in intense marketing, and investors naturally turn their attention to these firms. However, it appears that this year's Olympics will struggle to enjoy a "flash-in-the-pan" boom.
The industry that typically looks forward to the Olympics is the TV sector. This is due to expectations that major sports events lead to an increase in demand for both new and replacement TVs. Global companies like Samsung Electronics005930 and LG Electronics066570 are planning to strengthen their market penetration by showcasing a variety of products. LG Electronics is focusing on TV marketing and is running discount events not only in Korea but also locally in France. The same applies to other IT products.
Samsung Electronics, an official Olympic partner, is broadcasting the Paris Olympics through its mobile technology. It held a launch event for its new foldable smartphone in Paris on the 10th and provided approximately 17,000 athletes participating in the Olympics with the Galaxy Z Flip6 Olympic Edition. Samsung Electronics Chairman Lee Jae-yong also visited the Olympic site for the first time in 12 years since the 2012 London Olympics. It is reported that Chairman Lee intends to watch and cheer for our athletes during key matches while focusing on marketing for Galaxy smartphones. Kim Woo-min, who won a medal in swimming for the first time in 12 years, held a Galaxy Z Flip6 while taking commemorative photos with other medalists, raising expectations for the advertising impact.
Other sectors traditionally considered Olympic beneficiaries include food, beverage, and convenience store stocks, which gain from people enjoying food while watching sports. These include alcohol and beverage companies like HiteJinro000080 and Lotte Chilsung005300, poultry-related firms connected to chicken consumption such as Harim, Maniker, and Kyochon F&B, and convenience store chains like BGF Retail282330 and GS Retail. Stocks related to broadcasting and media, such as CJ ENM, Skylife, and CJ HelloVision, have also been mentioned.
However, these relevant beneficiary stocks are showing a sluggish trend during this Olympics. While these stocks have shown upward trends ahead of past Olympics or World Cups, it appears the Olympic effect is not being reflected in stock prices this time. Aside from women's handball, Korea's soccer and baseball teams failed to qualify, resulting in a delegation of only 143 athletes across 21 sports. This is the smallest number of athletes sent in 48 years since the 1976 Montreal Games. This is due not only to the fact that public interest has waned compared to the past and popular sports like soccer and basketball failed to qualify, but also to the significant time difference.
Instead, the market seems more interested in the U.S. presidential election and the future direction of interest rates by the U.S. Federal Reserve. Lee Seung-woo, a researcher at Eugene Investment & Securities, predicted, "Amidst political uncertainty and market volatility, this week will be a critical one as big tech companies announce earnings and the Federal Open Market Committee (FOMC) meeting takes place, offering a glimpse into the possibility of interest rate cuts." This week is packed with events that investors must watch closely, including major tech stock earnings, employment-related indicators, and monetary policy meetings in Japan and the U.S. In other words, it is a week where one must pay more attention to politics and global economic concerns rather than an "Olympic boom."
In particular, the KOSPI, which was eyeing the 2900 line just on the 10th, has fallen to the low 2700s in just two weeks, heightening investor anxiety. With expectations for Fed rate cuts peaking, the yen surged due to concerns over a Bank of Japan (BOJ) rate hike. Meanwhile, the market was shaken by the "Trump trade" (money flowing into stocks benefiting from a potential Trump victory), the Biden administration's tightened semiconductor regulations, Tesla's earnings shock, and uncertainties regarding the timing of profit contributions from Alphabet's increased AI capital expenditures, which dragged down both tech stocks and the index itself. Lee Kyung-min, a researcher at Daishin Securities, predicted, "The mood of the global stock markets, including the KOSPI and Nasdaq, will turn around after passing through the BOJ and FOMC meetings at the end of this month and the beginning of next, and entering the full-fledged earnings season." Researcher Lee advised, "It is always darkest just before the dawn," adding, "Proactive responses are necessary when fear is widespread."