(MENAFN- The Peninsula) Ashwaq Al Sharshani
Qatar's stock market is sensitive to FIFA announcements. The analysis of the movement in the stock returns and market returns showed that FIFA announcements affected the Stock market performance. InvestoWWrs and portfolio managers reacted to the announcement involving the market index. The bullish stock market trend reflects investors' confidence in companies and the overall economy. The positive news influences the decisions of investors positively. FIFA announcements bullish stock prices, reflecting investors' optimistic expiration (AlRefai & Eissa, 2017).
The stock market index's performance is considered the barometer to measure economic growth. The movement in the stock prices and indices reflects the confidence of investors and consumers in the economy. Consumer and investor confidence drives growth, positively affecting expectations and prices. Many theories in behavioral finance explain that the stock price is affected by investors' expectations, sentiments, and confidence. The feelings and emotions of investors are expected by the news, information, and events that affect stock prices. FIFA 2022 is a historic and prestigious tournament hosted by Qatar. The event is expected to significantly and positively impact the exchange performance (AlRefai & Eissa, 2017).
FIFA 2022 is expected to contribute $17bn to Qatar's economy. Many sectors of the economy will benefit from the tournament. Transportation, hospitality, banking, insurance, and many other industries will experience a boost in demand (Siddiqui, 2022). Investors react positively to increasing the stock price when the market outlook of an enterprise is optimistic. The economic impact of FIFA positively affected investors' expectations about companies' financial performance.
Qatar is expected to outperform other countries in the GCC due to FIFA 2022. The economic growth of Qatar will beat the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain, and Oman.
The Initial Public Offerings (IPO) are expected to be fully subscribed due to optimistic forecasts and expectations about the Qatari economy. Qatar's stock market will outperform its historic performance in 2022. The prices of stocks are already soaring, and most of the stocks are trading at a premium (Elbahrawy, 2021).
The economic impact of FIFA is uneven for different sectors and industries. For instance, the insurance industry will likely benefit from mandatory health insurance. The government of Qatar implemented the new Health Insurance Law. According to the law, non-Qatari employees and their families must receive compulsory health insurance from their employers. Tourists are also required to subscribe to mandatory health insurance for the period of stay.
The insurance industry will experience a sharp increase in demand for their services (Dentons, 2022). Undoubtedly, the insurance companies registered with the relevant Ministries to offer mandatory health insurance will likely provide attractive returns to investors.
The behavioral finance theory states that stock prices are affected by the sentiments and expectations of investors. The feelings and expectations are positively affected by positive news and announcements. The stock market shows a bullish trend when investors have positive expectations about the market (Selim Arena, 2015). Likewise, investors react negatively to negative news. Research shows that investors respond positively to FIFA announcements which affect the stock prices (AlRefai & Eissa, 2017). The FIFA 2022 tournament is going to improve the performance of each sector and industry. The positive expectations of investors are driving the share prices upwards.
FIFA 2022 is contributing to the positive expectations and sentiments of investors. The stock prices reflect a bullish trend. Investors expect dividends and capital gains to be higher in the coming year. The tournament is positively affecting the stock prices and market returns. However, investors should hold diversified portfolios to reduce risk and increase return. The diversification will reduce the risk of committing all funds to a single stock or industry.
Qatar Exchange is expected to outperform other exchanges in the region. Investors' positive expectations are expected to be reflected by the bullish trend of stock prices. The investment in infrastructure and the millions of tourists expected to visit Qatar for FIFA 2022 will boost many sectors and industries. The real estate sector is already experiencing increased investments by the public and private sectors.
The financial industry, including banking and insurance, is expected to experience robust growth in the coming months (Oxford Business Group, 2022). The bullish trend of the stock prices is an indicator of better growth and higher confidence among investors and consumers. Nevertheless, FIFA 2022 will positively affect the stock market by increasing the market price of stocks, offering higher dividends, and higher capital gains for investors.
The author is a Qatari student living in California.
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