The whistle to kick off the final of the European Football Championship will be heard in London at 9.00pm on 11 July, when the last two of the 24 teams that originally started the finals play for the Henri Delaunay Cup. Up to 45,000 spectators in the probably half-occupied Wembley Stadium will watch the match in person, while hundreds of millions of others will be following it live via TV, radio and streaming services. Anticipation for the tournament, the opening match of which takes place in Rome on 11 June, is huge. For a long time, after all, it was uncertain whether the event, already postponed from 2020 due to coronavirus, could actually be held. The pandemic has lost a little of its terror since then, thanks in particular to the progress of vaccination. After more than a year of lockdown and games played behind closed doors, all the predictions are that fans will flock back to the stadiums. In that regard the competition could even be the symbolic whistle that starts Europe's return to a new normality. Players, officials and fans are not the only ones looking forward feverishly to the games: some sectors of the economy are also hoping for an extra boost from the tournament, which enjoys worldwide appeal.
That is particularly the case for those companies which are directly involved in the Championship. Alongside the official sponsors, it is outfitters especially who are pinning their hopes on the collective enthusiasm for the round leather ball. Right on time before it all kicks off, Leonteq has launched barrier reverse convertibles that are based on equities from this pool. It goes without saying that the biggest sporting goods groups in the world are among the mix. Twenty-one of the 24 teams in the Championship play in kits made by Adidas, Nike and Puma (see graph). Nine of these teams wear the "Swoosh" logo of the industry leader on their chests. Nike's stall includes tournament favourites France, England and the Netherlands as well as defending champions Portugal. Spain, Germany and perennial dark horses Belgium, on the other hand, are probably the likeliest of the teams kitted out by Adidas to achieve success. The global number 2 on the sporting goods market has pulled off something of a coup for the duration of the Championship: from 8 June, the German national team will be staying in Herzogenaurach. The team managed by Jogi Löw will be setting up its camp on home ground – a brand-new building complex at Adidas's group headquarters.
In addition to the European Football Championship, the Copa América – taking place at almost the same time – could give further impetus to sales of kits, balls and football boots. With the Summer Olympics beginning in Tokyo shortly after the two tournaments, businesses have another major event on the global stage to look forward to. Following their stock market comeback last year, Adidas, Nike and Puma have lost a little speed (see chart). That makes the yield optimisation strategy for the sporting trio all the more interesting. However the prices of the underlyings move, investors in the Barrier Reverse Convertible will receive a quarterly coupon payout of 8.00% p.a. This opportunity is partially protected by a security buffer of 40%. The other two barrier reverse convertibles on "European Championship shares" likewise come with barriers, in their case 60% of the initial level. Leonteq is yoking Alibaba together with Fedex. The Chinese internet giant has struck a sponsorship agreement with UEFA through its payment subsidiary, Alipay. Meanwhile, the US group is exploiting the commercial rights and, through its Fedex Express division, serves as the official logistics provider of the European Football Championship. The coupon for this prominent duo comes to 10% p.a.
Investors in the new issues based on Booking Holdings and Volkswagen can reckon on payouts of the same amount. Pictures of people travelling around Europe would probably be just what the tourism portal needs. After the lockdown, Booking Holdings has seen its business pick up only very slowly again. The Nasdaq company has just reported a 50% drop in revenue for the first quarter of 2021, putting it into the red. By contrast, assembly lines at Volkswagen have been running at full speed since the start of the year. Having been able to post a fivefold increase in operating results from January to March, the motor manufacturer has raised its outlook for 2021 somewhat. On the stock market, however, the DAX member has shifted down a gear following a tremendous start to the year. That's no problem for the Barrier Reverse Convertible: what is important is that VW and Booking Holdings stay on track over the next 18 months. Please note that the soft callable function in all three new issues means they can be called in and redeemed early four times a year, for the first time after six months.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.
