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Who (really) earns from the war in Ukraine

The war in Ukraine caused a global upheaval in markets and in economic value chains, especially on the security front, but like every great global crisis it has had its “winners”, even involuntary: economic actors found themselves more or less directly favored by the impact of the conflict on their operations.

We are obviously talking about those sectors that will take into account direct extra profits from the conflict, due to the increase in activities, the race for safe investments on their securities or the relaunch of their respective sectors, or the financial operators who have moved to capitalize on the growing volatility that drives markets In this sentence.

Let’s start with the first field. In this last month, when war tensions have exploded throughout the Western world, the securities of companies belonging to the military-industrial complex have boomed. At Piazza Affari Leonardo, for example, scored + 41%a young company like Defense Tech has marked + 10%, in Paris Thales nearly + 35% in London British Aerospace marks + 23% and in the USA + 10% and + 13% respectively score General Dynamics and Lockheed. In a trend of generalized setback for the markets, these growth marks a growing expectation of orders.

Among the listed funds (ETFs) that follow the defense sector, a new front comes from the cyber world, with the largest fund in the world on the subject, the ETF Global X Cybersecurity, which has seen its value increase by more than 10% since the start of the war. For Morgan Stanley, uncertainty about a cyber conflict between Russia and the West “will continue to provide a strong tailwind for cybersecurity stocks” in the months to come.

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As anticipated, funds that have played on the edge of speculation on commodity stocks by betting on bullish trends and “squeezing” the markets are also doing very well. In the months of growing financial volatility on a global scale, many investors have positioned themselves “long”, predicting an upward but fluctuating trend, made up of continuous rides on the roller coaster of stock prices and pushing strongly on the futures market for oil, gas and other commodities. Thus helping to self-fulfill the fear of a scenario of high prices and runaway inflation, but obtaining the profits, especially after the start of the war. “Statar Capital – Miami hedge specializing in commodities,” he notes The sun 24 hours, reported “from October 2018 + 266% against 66% of the S&P 500 index”, concentrating together with its founder Ron Ozer, guru of the sector, large margins in recent weeks. In a context in which “there are commercial entities – certainly not speculators – forced to chase volatility to avoid worse problems”, the operators in question profit on two fronts of uncertainty: on the one hand, in terms of the need for utilities and companies to trade gas, oil and other materials to keep the markets liquid, going so far as to sell them underpriced, on the other hand on the fact that the financialization of the markets and uncertainty push futures upwards, animating increasing price dynamics.

Is there therefore a speculative hand behind the uncontrolled rise in prices? Also, but not only. The inflationary blow is self-sustaining and the intervention of hedge funds on the markets (for European gas we are talking about 17.8% of purchase positions) does the rest. But for The sun “even the big investment banks – the names of Goldman Sachs, BofA, Bnp Paribas and Morgan Stanley circulate – have moved on commodities. Among those who have certainly benefited from the record prices of oil and gas are the companies oil: the major global majors recorded profits up between two and six times compared to 2020 “, destined to increase in the current year.

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We are therefore in a context that will see winners and losers very clear. Among the industrial sectors, the pivot of the real economy, only the defense and its related industries can celebrate. The financial victory of many operators is already clear, but it goes hand in hand with a war economy shock that is part of the more complex energy and inflation crisis of the second post-war period. The results are clear: the war between Russia and Ukraine, in the West, can mark a new divide between the real economy and finance, between growth and speculation. And this is not suitable for most advanced systems, affected by much more concrete dynamics.

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