Advertising, media and infrastructure
Filippo Diodovich, IG Italy
'Government funds for new infrastructure will give a boost to the construction companies that win the new contracts. The media industry should be able to drive bigger returns as prices for advertising space increase.'
'However, companies need to put in the effort to derive maximum benefit. If companies have planned investments strategically they should see a return. But sport events can hurt the companies who have spent too much without proper planning.'
'TF1 will broadcast 22 matches during Euro 2016. The channel has paid €40 million for the rights, included €25 million for matches shared with French peer M6. We can’t be sure it’ll make a profit, but it also offers pretty good visibility and it is good for the global image. In the short term, shares of both TF1 and M6 are under pressure as concerns about the upcoming EU referendum in the UK and the global economy weigh on global stock markets. Indeed, volatility in the French stock market is at its highest since the market crisis of January and February. However, we may see any positive effects for the broadcasters come through in the second half of the year.'
How they fared
As predicted, the UK’s vote to leave the EU in June proved to be bad news for TF1 and M6. But it proved far more disastrous for TF1, with a share price drop of around 20% four days after the vote.