23rd July 2021
Good morning or should that be Konnichiwa, after a one-year Covid induced delay, the Tokyo Olympic Games finally kick off with the opening ceremony today.
This edition of the Games will feature over 11,000 athletes, representing 206 nations, competing in 339 events over 33 sports, in 42 venues. But we’ll have to set our alarms as Tokyo is 8 hours ahead of the UK.
- Tokyo Games are here but at what cost?
- Unilever warns of price hikes ahead
Yesterday's market moves
FTSE 100 -0.4% 6,968
FTSE 250 +0.6% 22,677
Markets closed mixed yesterday as investors waded through a raft of company earnings reports and continued policy support from the European Central Bank tempered concern about the effect on the global recovery of the rapid spread of the Delta variant of coronavirus.
Tokyo Games are here but at what cost?
What’s going on?
After being postponed for a year the 2020 Tokyo Olympic Games finally begin today and will run until 8 August. But it’s been a bumpy road with many questioning whether it should still be going ahead amid the state of emergency in Japan over Covid and because of that there’ll be no spectators.
Less than a quarter of Tokyo residents expect to “enjoy” the games according to a poll by Japan’s public broadcaster NHK. And 2/3 are concerned about Covid-19 variants entering Japan as a result of hosting.
Why is this important?
So why are the Games still going ahead? In a word money, more specifically lots of money but it does not fall equally.
The financial hit of not hosting the games would be more than going ahead. It has cost Japan $15.4bn, which includes an extra $2.8bn because of the postponement. But many believe the actual price tag could be double.
The Japanese hospitality and transport sector is expected to lose up to $1.4bn due to the lack of crowds.
Domestic sponsors like brewer Asahi paid $135m to be one of 15 Tokyo 2020 Gold Partners, with the vision that its beer would be drunk by the spectators but now it will have to market virtually which will undoubtedly be less effective.
But as long as the Games are on TV the International Olympic Committee (IOC) will make $4bn in television rights income.
Companies with broadcast rights will be fine, too: American broadcaster NBCUniversal has already beat the $1.2bn ad revenue it made for the 2016 Rio Games.
The IOC is having a tough time attracting hosts for future games. For years hosting the Olympics has been a source of national pride. But the economic benefits of hosting aren't clear although they are touted as a boost for economic growth and urban redevelopment. The cost-benefit analysis does not show any real change in economic growth for host nations but very real costs.
Unilever warns of price hikes ahead
It may be time to stock up on some store cupboard items.
Consumer goods giant, Unilever, warned that the costs of raw materials for mayonnaise, detergents and ice cream are increasing at the fastest in more than a decade, forcing it to scale back profitability goals for this year.
Share fell 6% in the news yesterday.
The group has a portfolio of over 400 household brands like Dove, Knorr, Persil and Hellman’s. Its products are used by 2.5bn people every day.
The company mentioned inflation no less than eight times in its half-year results where it reported a sales increase of 5% to €25.8bn in the six months to June.
It blamed rising prices of oil, soy beans, freight and packaging as the culprits for upcoming price hikes to its products. The company said consumers can expect prices on average to rise by 2%.
Unilever is not the only company alerting customers to rising input prices, P&G and Kimberly-Clark are among the many consumer goods makers who are also raising prices.
Stat of the day
Brisbane has been confirmed as the host for the 2032 Summer Olympic Games
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- Johnson & Johnson to pay $5bn in landmark $26bn US opioid settlement
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