Royal Wedding moves markets (Not!)
A Royal wedding of this significance does not come along very often. It is a refreshing change for the gossip magazines to take a break from heralding the nuptials of pop stars and reality TV contestants to document the marriage of the next King of England. Human behavior can be predicted around this event and it presents a welcome boost for lots of industries currently finding life tough. We single out brewers, newspaper groups, TV networks and the company who can facilitate the production of any manner of occasion-marking memorabilia (Alibaba). We also note that plans to plunge Buckingham Palace into darkness will NOT be a benefit to London’s electricity provider.
With a national holiday lined up to help people enjoy Prince William and Kate Middleton’s big day, one thing is certain. As sure as night follows day, the Brits will drink. A lot. I fancy a tremendous amount of beer to be drunk and this could help all of the brewing stocks. Admittedly, none of them show high short interest. Regardless of the forecast rain, this is the perfect occasion for the cider makers, C&C Group Plc (ISE:GCC). Their Magners brand went from hero to zero a few years ago but the price has slowly risen the last 18 months. Institutional investors only own 8% of the firm but with an early outbreak of sunny weather plus this extra national holiday, everything is in their favor.
To capture the memories of the day and see all the photographs, people will buy newspapers in a frenzied fashion. The tabloids with bigger and more colorful pictures than the broadsheets will be the main beneficiaries. Good news therefore for Trinity Mirror plc (LON:TNI), publishers of the Daily Mirror tabloid. Short sellers redoubled their efforts from 1% to 2.5% after the recent bad news – was this wise?
Two listed TV networks - CBS and ITV – are set to sell masses of advertising on the back of millions tuning in. Demand to borrow CBS Corporation (NYSE:CBS) recently doubled to just under 2%. ITV plc (LON:ITV) saw rapid short covering and is low at 1.4%.
If you wanted 10,000 baseball caps with William and Kate’s faces on it, Alibaba.com Limited (HKG:1688) would be the place to go. It is a business to business trade exchange giving access to China’s vast production capabilities via this Hong Kong listed tool. Short interest has spiked to a high of 3.4% which is most of the shares you can short. Clearly some investors didn’t see enough such orders being placed!
Finally, a truly British piece of eccentric behavior lies behind the decision to switch off the illumination to the Palace at 12:30 pm GMT just when the US networks broadcast live from their expensive studios just outside this monument of monarchy. Poor Electricite de France SA (EPA:EDF). Does this explain why their price has hit a 12 month low and the shorts have picked up a tad? I thought not.
