Looking past the Olympic hype

Olympics are expensive investments, but worthwhile if you achieve what you’ve planned.

It’s 2019 and we’re almost to the world’s next largest sporting event, the 2020 Tokyo Summer Olympics, where Japan will showcase its technological prowess with robot security guards1 , driverless taxis2, and 3D laser AI technology for gymnastic scoring3.

The Olympics have always been prestigious. Athletes from around the globe pit themselves against each other to take home the most medals for their country. Tourists flock to watch the Games live, putting the country and its city on to the map. Their names go down in history forever… it’s no wonder cities compete to be the next Olympics host.

But is hosting the Olympics really as rewarding as it sounds?

The Olympics are expensive: every host city since 1960 has bust its budget4 on newly constructed stadiums and facilities. Poorer countries like Greece and Brazil are still recovering.

Pyeongchang hosted the 2018 Winter Olympics but didn’t end up in as much debt as previous host cities. Infact, the Pyeongchang Organising Committee has announced a surplus of at least US$55 million5. What was different?

Pyeongchang saw through the hype of being an Olympics host. For starters, it avoided building another white elephant. It immediately demolished the US$100 million stadium built for the opening and closing events after it served its purpose, saving on the costs of maintaining a permanent structure.

Next, it converted its two Olympic villages into condominiums and sold them successfully to domestic buyers. This was helped by the buildings’ strategic location near the newly constructed bullet train that puts Pyeongchang just 1.5-hours away from Seoul.

The snow sports and ice venues are not left to waste. Some are open to the public to encourage winter sport participation, and others are being used as training grounds for high performance athletes.

Investments should be made in a similar fashion. Don’t be influenced by hype and don’t follow the crowd when investing. Sometimes making the right investment decision can be very uncomfortable. At Eastspring Investments, our investment professionals look for opportunities based on fundamentals, not hype.

Sources:
1 https://english.kyodonews.net/news/2018/10/2d643dba2a01-robot-station-security-guard-unveiled-to-press-ahead-of-tokyo-olympics.html
2https://www.theguardian.com/technology/2018/aug/28/driverless-taxi-debuts-in-tokyo-in-world-first-trial-ahead-of-olympics
3https://japan-forward.com/introducing-ai-technology-for-scoring-gymnastic-performance/
4Olympic Proportions: Cost and Cost Overrun at the Olympics 1960 – 2012. Said Business School. University of Oxford.
5https://www.olympic.org/news/pyeongchang-2018-announces-surplus-of-at-least-usd-55-million

This document is produced by Eastspring Investments (Singapore) Limited and issued in:

Singapore and Australia (for wholesale clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore, is exempt from the requirement to hold an Australian financial services licence and is licensed and regulated by the Monetary Authority of Singapore under Singapore laws which differ from Australian laws.

Hong Kong by Eastspring Investments (Hong Kong) Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.


Indonesia by PT Eastspring Investments Indonesia, an investment manager that is licensed, registered and supervised by the Indonesia Financial Services Authority (OJK).


Malaysia by Eastspring Investments Berhad (531241-U).


This document is produced by Eastspring Investments (Singapore) Limited and issued in Thailand by TMB Asset Management Co., Ltd. Investment contains certain risks; investors are advised to carefully study the related information before investing. The past performance of any the fund is not indicative of future performance.


United States of America (for institutional clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore and is registered with the U.S Securities and Exchange Commission as a registered investment adviser.


European Economic Area (for professional clients only) and Switzerland (for qualified investors only) by Eastspring Investments (Luxembourg) S.A., 26, Boulevard Royal, 2449 Luxembourg, Grand-Duchy of Luxembourg, registered with the Registre de Commerce et des Sociétés (Luxembourg), Register No B 173737.


United Kingdom (for professional clients only) by Eastspring Investments (Luxembourg) S.A. - UK Branch, 10 Lower Thames Street, London EC3R 6AF.


Chile (for institutional clients only) by Eastspring Investments (Singapore) Limited (UEN: 199407631H), which is incorporated in Singapore and is licensed and regulated by the Monetary Authority of Singapore under Singapore laws which differ from Chilean laws.


The afore-mentioned entities are hereinafter collectively referred to as Eastspring Investments.


The views and opinions contained herein are those of the author on this page, and may not necessarily represent views expressed or reflected in other Eastspring Investments’ communications. This document is solely for information purposes and does not have any regard to the specific investment objective, financial situation and/or particular needs of any specific persons who may receive this document. This document is not intended as an offer, a solicitation of offer or a recommendation, to deal in shares of securities or any financial instruments. It may not be published, circulated, reproduced or distributed without the prior written consent of Eastspring Investments. Reliance upon information in this posting is at the sole discretion of the reader. Please consult your own professional adviser before investing.


Investment involves risk. Past performance and the predictions, projections, or forecasts on the economy, securities markets or the economic trends of the markets are not necessarily indicative of the future or likely performance of Eastspring Investments or any of the funds managed by Eastspring Investments.


Information herein is believed to be reliable at time of publication. Data from third party sources may have been used in the preparation of this material and Eastspring Investments has not independently verified, validated or audited such data. Where lawfully permitted, Eastspring Investments does not warrant its completeness or accuracy and is not responsible for error of facts or opinion nor shall be liable for damages arising out of any person’s reliance upon this information. Any opinion or estimate contained in this document may subject to change without notice.


Eastspring Investments (excluding JV companies) companies are ultimately wholly-owned/indirect subsidiaries/associate of Prudential plc of the United Kingdom. Eastspring Investments companies (including JV’s) and Prudential plc are not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America or with the Prudential Assurance Company, a subsidiary of M&G plc (a company incorporated in the United Kingdom).