Singapore F1 Grand Prix: stocks to watch

[SINGAPORE] As the Singapore Grand Prix roars into town from Friday (Oct 3), companies linked to the race and the country’s overall economy are also in the spotlight.

The race weekend alone brings in about S$130 million annually in terms of net spend, the Ministry of Trade and Industry said in 2022. More than 30,000 jobs are also expected to be created for the week.

However, retail investors should look for medium and long-term strategies for companies linked to the race week, said Zavier Wong, a market analyst at trading platform eToro.

The “clearest” benefit is enjoyed by hotels and tourism-related stocks, said Wong. Airlines and travel platforms also benefit, while transport operators often enjoy a spike in mobility demand.

Ahead of the F1 weekend, islandwide hotel occupancies hit more than 70 per cent in mid-September, based on data from hotel industry research firm STR. Hotels such as those under the Pan Pacific Hotel Group and Hilton said their bookings this year are not only significantly higher than a typical non-race weekend, but are also better than last year’s figures.

“Sports and entertainment tourism is becoming one of the defining travel trends in the Asia-Pacific, and F1 is leading the charge,” said Ben George, senior vice-president and commercial director for the Asia-Pacific at Hilton, in reference to a Hilton survey released on Wednesday.

More than two-thirds of 5,000 travellers surveyed across China, India, Australia, Singapore and Japan said they are “eager” to cross borders for sporting events such as an F1 race.

Hotels such as Hilton, alongside Singapore-based enterprises like Kingsmen Exhibits, are definite winners from the F1 weekend. However, for smaller businesses, there is more disruption than upside.

The Singapore Grand Prix’s prestige is also a significant boost for sponsors on and around the track, with LVMH angling for a much-needed lift to its Tag Heuer, Louis Vuitton and Moet & Chandon brands. Just over 500 metres away from the Bayfront Grandstand is its boutique at Marina Bay Sands, floating on the water under the lights.

Singapore Airlines (SIA) also enjoys benefits from its title sponsorship of the race. Wong pointed out that it had the highest number of global sponsorship mentions – at more than half of the total share of voice for F1-linked global sponsorships last year, based on data from media intelligence company Meltwater.

SEE ALSO

Travel company Trip.com also said in 2024 that it had a 90 per cent year-on-year jump in flight bookings to Singapore around the race week.

Global brands such as Ferrari, the existence and reputation of which is inextricably linked with F1, will also attract local investor attention around the race week, said the eToro analyst. Its shares are up 12 per cent year to date, largely due to its strong earnings execution, but also in part due to seven-time F1 world champion Lewis Hamilton joining its stable.

“Hamilton’s arrival is less about units sold than about presence on the global stage,” said Wong. “It’s the kind of reputational equity that doesn’t show up neatly on balance sheets, yet helps explain why Ferrari trades at valuations most carmakers can only dream of.”

The race weekend is not limited to activities on and around the track, as summits and conferences are also held during the period. Both the Milken Institute Asia Summit and crypto conference Token2049 have been organised in the days preceding the race, which is set to be held on Sunday.

The benefits also apply to local transport operators, said Wong. ComfortDelGro (CDG) “typically records higher ridership across its taxi and bus networks during the race weekend”, and ride-hailing operator Grab also sees increased demand.

Singapore’s F1 race not a “miracle money-maker”

Wong cautioned that an event like F1 is not a “miracle money-maker” for retail investors. Instead, he said investors should plan longer-term plays by reading brands’ involvement in such events as signals of their broader strategies and confidence in their market positions.

SIA’s shares have been down about 3.4 per cent in the last year, but have jumped 28 per cent in the last three years since the turnaround from Covid. CDG has also been down 3.4 per cent in the last year, but has climbed 9.1 per cent in the last three years.

The difference is even more apparent with Grab. It has enjoyed a 56.5 per cent uplift to its shares in the past year, and a 124 per cent jump since 2022.

LVMH, which has been struggling this past year and has slumped 21.6 per cent, had a milder 14.2 per cent drop in the last three years, and even a 28.5 per cent increase in the last five.

Still, Wong points out that not everything around the Singapore F1 race can be measured. The impact of deals made at conferences such as Token2049 cannot be calculated, nor can one trace a decision to open a new office in Singapore after a key decision maker attends a roaring race weekend.

The atmosphere around the circuit and across the entire island also cannot be quantified.

“Ask anyone here in Singapore. It’s not just another weekend,” said Wong.