2023-10-09 20:43:29
The extension of the Ukrainian war to the Middle East has revitalized the global arms industry and improves your future expectations. The actions of the main arms and ammunition producing companies are in luck in the same proportion as the international drama It spreads and saddens the Planet. Behind the Hamas attack against Israel just a glance at the Stoxx Europe Total Market Aerospace & Defense to evaluate what direct effect it had on the expectations of the war and aerospace industry. After a few weeks with predominance of sales, since September, the Hamas attack on Saturday meant a rise of 2.8% in the general index to 1,133.12 points, which returns to the upward trend compared to the record established at 1,201 .8 at the beginning of September. In 20 years, this index has multiplied by eight.
There are many companies that benefit from the massive consumption of weapons caused by both the war in Ukraine and the Middle East. Experts have already warned that a new arms race not known since the times of the Cold War is taking place. Military primacy now depends on new technologies, mainly derived from space and artificial intelligence. And these sectors multiply their sales and future expectations. Drones are the advance of that new technological war controlled from space, technologically adapted to this century and requiring million-dollar investments.
After years of cuts in the state defense budget, most developed countries have now announced significant increases in military spending. Germany announced 100 million more and even Japan confirmed last December that the country will practically double its military budget to 50 billion over the next four years and will strengthen its weapons to have the capacity to reach enemy bases, looking directly at the Chinese threat.
Obsolete weapons
While almost obsolete weapons leave the warehouses of states destined for the battlefields in the form of altruistic support or future barter, countries update their defense budgets in view of the possibilities of new weapons born with the era of digitalization and artificial intelligence. While the war in Ukraine went from being a supposed blitzkrieg to becoming a war conflict with an uncertain horizon and unpredictable economic and geostrategic consequences, the war in the Middle East opens a new front between the West and the Arab countries. The alliance between Russia and China almost takes a backseat to the threat of a conflict in which Iran gains prominence.
Why is there war between Israel and Gaza?: the keys to the Hamas attack
The German firm Rheinmetall, manufacturer of the Leopard battle tanks and the Marder infantry fighting vehicle, raised its share price on the Frankfurt Stock Exchange by 8.7% between Friday, October 6, one day before the Hamas attack, and on Monday, October 9. The American firm Aerovironment, which manufactures unmanned aerial vehicles, has risen 14.85% since the beginning of September. The Italian Leonardo, specialized in helicopters and navigation systems, has increased its share price by 35.5% since July. The French Thales, specialized in aeronautical security services, also raised the price of its securities by 5.5% since Friday.
The war between Israel and Hamas pushes up oil prices
Economic growth and military spending
On the question of whether or not the arms industry is the engine of economic growth, economists do not agree. For some, the Cold War was an undoubted engine of US growth, capable of financing with almost unlimited debt any international military career that especially benefited its companies. Public debt support, the ability to generate money, is key to determining whether a military industry generates wealth for the country that houses the technology and factories. Otherwise, weapons production requires customers to be profitable. A global scenario of war revitalizes the industry without the need to be financed with public debt or taxes.
#war #Israel #revitalizes #actions #arms #companies