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Olympics Downgraded to Sell?

Friday, 9th May 2008 ~ Maggie ~ Link ~ Comments (0)

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Ever since the torch relay's rocky international route began, the business press has speculated how the protests, boycott calls and other negative attention would impact Olympic advertisers.

But the likes of Adidas and Lenovo are not the only companies looking for big gains from the Beijing Olympics. In November 2006, Australian securities firm Macquarie Group created a basket of Olympic stocks, whose values Macquarie expected to get a boost from the games. The 23 Olympic stocks include Air China, Beijing Capital International Airport Co. and Beijing North Star Co., the city government's property arm.

According to this Bloomberg report, the stocks "fell by an average 21 percent this year compared with a 12 percent drop in the Hang Seng China Enterprises Index."

Bloomberg says the stocks' value rose too quickly in 2007, going up 69 percent compared to 56 percent overall for the Hang Seng index. The story implies that the stocks are still overvalued, trading at an average of 30 times earnings compared to 19 times earnings for the Hang Seng index.

Tags: business, Olympics

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