A recent report predicts that stock market performance will improve as Saudi Arabia gets ready to host the FIFA World Cup in 2034. According to SNB Capital’s most recent analysis, the Kingdom’s non-oil GDP would rise by 4 to 5% over the medium term, which is estimated to be four to eight years, if the major event were held.
Following a comparison of the development of the stock markets in South Africa, Russia, and Qatar during their respective hosting of the mega football event in 2010, 2018, and 2022, the firm came to this conclusion.
The analysis projects that Saudi Arabia’s hosting of the FIFA World Cup in 2034 will have a major economic impact and accelerate the growth spurred by “Vision 2030,” a national initiative to diversify the Kingdom’s economy away from its reliance on oil.
“The decision for the host is usually made roughly seven to 12 years in advance. Post announcement, equity markets generally performed well with South Africa showing the strongest return, followed by Qatar and Russia. Therefore, we expect the Saudi market to outperform emerging markets in the coming period,” SNB Capital said, as reported by the Arab News.
“FIFA 2034 also reflects positively on the equity market, leading to positive market return, valuation expansion as well as resilience and quick recovery from any potential global market headwinds,” it added.
Over the next one to four years, Saudi Arabia will reportedly invest heavily in infrastructure, such as stadiums, transit systems, and urban growth. The Kingdom’s steel, cable, and cement companies will be among the main beneficiaries of this time in the infrastructure and construction sectors.
“Construction firms will profit from these projects as they approach completion in the medium term, which is four to eight years. Over the next eight to twelve years, the tourism and hospitality industries will benefit, and the retail sector—which includes luxury stores and vehicle rental agencies—will also be in a strong position to gain,” SNB Capital noted.