The Pacman and the Peso
What do boxer Manny Pacquiao and trading in the Philippines have in common? Find out below in this article from Dali, our resident Trakinvest stock market guru and journalist, with insights into all things finance and technology.
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The world went slightly crazy last week. Even for those who had never seen a boxing match before, and may never see one again, the hype surrounding the Mayweather vs. Pacquiao fight was palpable. Set to be the richest match in history, everyone wanted a slice of the action, and of the money. So was anyone trading pesos?
Trading started heating up in every sphere of the action. Ringside seats were being traded for over $100,000, bets were placed totalling hundreds of millions of dollars, and with the Pay-Per-View price soaring to a record $99 in the U.S people were trading the comfort of their homes for the local sports bar. Ironically, a different kind of trading was taking place in these bars, since a 200-capacity bar had to fork out over $5,000 to screen the game, the next trade was that of time and convenience, as people travelled far and wide to find a bar that would foot the bill.
But how many people were trading on the exchange? And more importantly, what was being traded?
With reports of streaming problems emerging as the fight got under way, the world took to Twitter. I myself followed the #maypac trend and after the fight was finally won by Mayweather, he was raking in 100,000 Tweet mentions per minute (with Pacquiao at 37,000). Twitter was arguably the most widely used means of accessing the world’s most anticipated fight. But with trading closed for the weekend, Twitter’s share price still stood at $37.84. Will this week bring a much welcome surge in its share price? Let’s see.
But then I turned to the Filipino peso, and an interesting trend came to light. With the U.S foreign exchange market trading in the realm of $4.5tn daily, it was unlikely that the fight would have any discernible effect on the dollar. But with a GDP ranked 153rd in the world, the Filipino peso may be slightly more susceptible to a single athlete making waves around the world.
The Guardian reported that in the weeks leading up to Pacquiao‘s last 10 bouts, the peso had appreciated against the dollar every time. In the final trading sessions before Pacquiao’s 5 most critical fights, the peso also gained strength 4 times against both the U.S dollar and the British pound. The only time this was not the case, was 6 years ago when he fought Ricky Hatton – the UK’s top fighter of course.
While the changes to the peso were incremental to be sure, you can’t deny that last week a 146lb Filipino boxer affected an entire currency.
Dali is a Palo Alto, USA based journalist who specializes in finance-based innovation and technology. Dali appears here on behalf of Trakinvest.