Store

You bet that weapons manufacturers have profited from the Paris attacks

The weapons industry benefits from terrorism: markets saw a growth in arms stocks after Paris was the target of attacks that left 130 dead.

Many of the largest weapons manufacturers in the world saw their stock prices rise on Monday the 16th of November, the first day markets opened after terrorist attacks in Paris three days earlier killed around 130 people. In general, stock markets, including Paris’s, didn’t see the slumps that have followed major terrorist attacks in the past, notwithstanding losses in the travel and tourism industries, such as those incurred by airline carrier Air France-KLM, whose stock fell by 6%.

 

hellfire missile us air force
A US Air Force Hellfire missile, the type also produced by US firm Lockheed Martin © Ethan Miller/Getty Images

 

The rise in arms stocks after Paris

In particular, New York based markets in the United States, the country that exports the most weapons in the world, saw a steady rise in arms stocks after Paris was attacked on the 13th of November. Lockheed Martin is the biggest weapons producer in the world according to the 2013 ranking compiled by the Stockholm International Peace Research Institute (SIPRI), which has been tracking international arms transfers since 1950. Lockheed, producer of the Hellfire missile, one of the weapons used by the United States to target Isis in Syria, saw its stock prices soar 3.5% between the day of the attacks and the following Monday, rising another 2.3% since then.

 

US arms firm Raytheon, the fourth arms producer in the world, made its second biggest gain in stock in three years, and was up 4% when markets closed on the 16th of November. Since the 13th of November, its stocks have grown by 8%. Following Raytheon in SIPRI’s ranking of the largest arms producers is Northrop Grumman, which saw its stock prices rise over 5%, whilst United States drone producer AeroVironment’s was up almost 10% since the day of the Paris attacks.

 

hollande visits thales factory sydney
French President François Hollande (centre right) with Executive Vice President of Thales Defence Mission Systems, Pierre Eric Pommellet (left) visit a Thales factory in Sydney, Australia © Dan Himbrechts/AAP Image

 

Such gains haven’t affected arms manufacturers in the US only. Italian defence systems producer Finmeccanica is up 10% on the Milan stock exchange compared to the stock prices it closed with on the 13th of November, whilst French firm Thales gained over 3% on the Paris Stock Exchange by the time markets had closed on the 16th of November. Both these companies are amongst the top ten weapons producers in the world.

 

Speculating on growing defense budgets

Financial commentators and defense industry analysts point out that arms stocks have surged because investors are betting on countries increasing their military spending, a belief also fuelled by French President François Hollande’s speech to the French Parliament on the 16th of November. In it he announced that the country would increase security forces and prevent jobs from being cut in the defense industry, declaring that “France is at war” with Isis. In fact, the French conducted airstrikes targeting the Isis stronghold of Raqqa, in Syria, for two consecutive days on the 15th and 16th of November, and once more against Raqqa and other targets in Syria and Iraq on the 23rd of November.

Ever since Isis emerged in April 2013 the defence industry has made substantial gains in world stock markets. For example, the values of Northrup Grumman’s as well as Thales’s share prices have grown 160%, whilst Lockheed Martin’s have increased by 150%, as reported by the Sydney Morning Herald. In this way the defense industry benefits economically from the intensification of conflicts in the Middle East and the growth in international terrorism, which in turn allows it to continue churning out the very tools that make this heightened violence possible.

Related articles