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Royal births and the stock market

At a time when all loyal Britons are getting ready to toast the arrival of a new royal baby, it might seem odd to wonder what the effect will be on the stock market, but it is an interesting question to ask.

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Mixed data

An examination of the performance of the FTSE All-Share index provides mixed results. The All-Share was chosen as it has a longer run of data, and also because the FTSE 100 is rather more of an international index, given the high proportion of miners and banking stocks that are not wholly focused on the UK economy.

The gains were most impressive for the births of Princes William and Harry in the 1980s. Here the gains were 19.5% and 16.5% respectively. However, these births took place in the midst of the 1980s boom, when the UK was already enjoying an impressive recovery from the dreary 1970s.

FTSE All-Share performance in wake of royal births in 1982 and 1984
FTSE All-Share performance in wake of royal births in 1982 and 1984


For the births of the daughters of the Duke and Duchess of York, the picture was less beneficial. The birth of Princess Beatrice in 1988 was followed by an increase of almost 10% in the FTSE All-Share, but the six months following the arrival of her sister Princess Eugenie saw a drop of 14%:

FTSE All-Share performance in wake of royal births in 1988 and 1990
FTSE All-Share performance in wake of royal births in 1988 and 1990


At this point the average performance for the market in the wake of a royal birth was 7.85%, a not unremarkable statistic even if Eugenie’s birth was not well-timed from a stock market perspective.

The final set of data relates to the births of the children of the Earl and Countess of Wessex; Lady Louise Windsor and Viscount Severn. Once again, the data is mixed, with the market rising in the wake of Lady Louise’s birth but falling after Viscount Severn’s:

FTSE All-Share performance in wake of royal births in 2003 and 2007
FTSE All-Share performance in wake of royal births in 2003 and 2007


Overall therefore, the average performance of the market after the six royal births since 1982 is 4.65%; but the results are decidedly mixed.

A nation waits

Clearly correlation is not causation, and it would not be wise to link market performance, whether good or bad, to such a rare event as a royal birth. Measuring goodwill and the ‘feel good factor’ is not a precise science, so perhaps the best investors can hope for is that the birth of an heir to the throne results in a similar market performance to that of Prince William.

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