Even as the overall US stock market is going down, shares of these companies have been rising since the war started in February.
United States-based arms manufacturing companies are reaping benefits of the Russia-Ukraine war as, even as the overall US stock market is going down, the shares of these companies have been rising since the war started in February.
The Joe Biden administration, since the start of the war between Ukraine and Russia, has provided Ukraine with a total military aid worth $25 billion which is six times more than what the United Kingdom has given, the second country on the list of military assistance providers to Ukraine. The war between the two countries is now eight-month long. Of the $25 billion given by the US—as per “Ukraine Support tracker”, which is an initiative of the Kiel Institute for the World Economy, a think tank based in Kiel, Germany—$8.6 billion is what has been described as “Weapons and equipment (specific items committed)”, while the remaining $16.4 billion is described as “Financial aid with military purpose (e.g. to finance future weapon purchase).
The war, which began in February end, has coincided with the earnings and the share price of top US and UK-based arms companies witnessing a sharp jump, despite the overall market in these two countries experiencing a slowdown due to multiple reasons.
In February, when the war was about to begin, the share price of Lockheed Martin was $385. It crossed $470 within days of the first shot being fired (an increase of 23%) and is now hovering around $430. Similarly, the share price of Northrop Grumman Corporation, a global aerospace and defense company, which was $386 in February end, rose to $485, an increase of 26% within months and right now is trading at $470.
The fortunes of the France-based Thales group, which is listed at the Paris stock exchange, too, improved after the war started. Its share was trading at 84 Euro when the war began, now it is being traded at 125-130 Euro, a rise of 55%. Among others, it manufactures Javelin surface-to-air missiles, more than 8,500 of which the US has sent to Ukraine.
The shares of the US-based AeroVironment, which manufactures Switchblade Tactical Unmanned Aerial Systems, 700 of which the US has given to Ukraine, were trading at $59 in February end, it touched a high of $110, an increase of 86% and is now being bought and sold at $100-$105.
Similarly, the war has come as good news for the shares of BAE Systems which manufactures Howitzer artillery guns. The shares, which were hovering in the early $30s during the start of the war, are trading for more than $40. Another defence company that has benefited from this war is General Dynamics Corporation, whose share rose from $200 at the starting of the war to more than $240.
To put things in perspective, the value of the Standard and Poor’s 500, or simply the S&P 500, which is a stock market index tracking the stock performance of 500 large companies listed on exchanges in the United States, has gone down by 11.49 % in the same time period.
On 13 September, the US Army awarded a contract worth $311 million to the Javelin Joint Venture (JJV) between Raytheon Missiles and Defense and Lockheed Martin for delivery of more than 1,800 Javelins meant to be sent to Ukraine in support of their military and security forces. As per US media reports, many US senators bought multiple shares of these companies as soon as the war started.
As per the latest fact sheet on the military assistance provided by the US to Ukraine, it has sent 1,400 Stinger anti-aircraft systems, 8,500 Javelin anti-armor systems, 32,000 other anti-armor systems, 700 Switchblade Tactical Unmanned Aerial Systems, 126 155mm Howitzers and up to 807,000 155mm artillery rounds, 20 105mm Howitzers and 144,000 105mm artillery rounds, 126 Tactical Vehicles to tow 155mm Howitzers, 22 Tactical Vehicles to recover equipment, 16 High Mobility Artillery Rocket Systems and ammunition, 20 120mm mortar systems and 85,000 rounds of 120mm mortar rounds, 1,500 Tube-Launched, Optically-Tracked, Wire-Guided (TOW) missiles, Four Command Post vehicles, Eight National Advanced Surface-to-Air Missile Systems (NASAMS) and munitions, High-speed Anti-radiation missiles (HARMs), 20 Mi-17 helicopters, Hundreds of Armored High Mobility Multipurpose Wheeled Vehicles, 200 M113 Armored Personnel Carriers, 40 MaxxPro Mine Resistant Ambush Protected Vehicles with mine rollers, Mine clearing equipment and systems, over 10,000 grenade launchers and small arms, over 60,000,000 rounds of small arms ammunition, over 75,000 sets of body armor and helmets, approximately 700 Phoenix Ghost Tactical Unmanned Aerial Systems, Laser-guided rocket systems, Puma Unmanned Aerial Systems, 15 Scan Eagle Unmanned Aerial Systems, Unmanned Coastal Defense Vessels, Up to 50 counter-artillery radars, Four counter-mortar radars, Counter-Unmanned Aerial Systems, Four air surveillance radars, Two harpoon coastal defense systems, 18 coastal and riverine patrol boats, M18A1 Claymore anti-personnel munitions, C-4 explosives, demolition munitions, and demolition equipment for obstacle clearing, apart from multiple other weapons.