top of page
  • Rovindu Ambagolla

Monday Market Musings>>>The Spoils of War- How Companies are Affected by the Russia-Ukraine Conflict

Updated: Mar 8, 2022

Picture Credit: Kevin Schmid

Russia invaded Ukraine on the 24th of February 2022, marking today the 12th day of ongoing fighting between the Russian armed forces and the people of Ukraine. This war has decimated cities and buildings which once stood tall and mighty, and left the streets of Ukraine littered with remnants of smouldering war machines. As a convoy of Russian military trucks stretching 40 miles long prepares to lay siege on Kyiv, the capital of Ukraine with over 2 million inhabitants, its residents arm themselves with Javelin anti-tank missiles, assault rifles and homemade petrol bombs to repel the attack on their homeland.

The war in Ukraine has set the world ablaze, both economically and emotionally. Thousands of protesters all around the world protested against the war in Ukraine and set up donation platforms for the refugees leaving the country. Millions of dollars has already been raised to help displaced Ukrainian people find shelter.

Picture Credit: Cedric Vt

Many governments have also imposed sanctions on Russian oligarchs, businesses and banned trading with Russia in an attempt to cripple Russia’s ability to finance the war in Ukraine. The US, UK, Australia, EU, Japan, South Korea and Singapore are all countries who have already imposed sanctions on Russia in a stance of solidarity for Ukraine. These sanctions are hurting the value of Russia’s currency, but hundreds of major brands are halting their operations in Russia as well, which will leave an even deeper dent on Russia’s economy. Apple, Samsung, Microsoft, Meta, Mercedes-Benz, Ford, General Motors, Nike, Ikea, PayPal, Mastercard and Visa are just a fraction of the companies who have taken action to protest against the war in Ukraine even at their own cost.

There are companies however on the other end of the spectrum that are profiting immensely. As the west commits millions of dollars in military aid to Ukraine, weapons manufacturing companies such as Lockheed Martin, Northrop Grumman, General Dynamics and British Aerospace systems have experienced a sharp spike in share value since the Russian build up began. Gregory Hayes, CEO of Raytheon (an aerospace and defence company) commented on an earnings call, “the tension in Eastern Europe, the tension in the South China Sea, all of those things are putting pressure on some of the defence spending over there. So, I fully expect we’re going to see some benefit from it”. It goes to show how some companies and CEOs are just waiting for an opportunity to earn a quick buck, no matter the circumstances.

-Lockheed Martin F-35 Lightning II ( $80 million ) Picture Source: Wikipedia

As the convoy of Russian tanks inches closer to Ukraine’s capital, only time will tell whether global efforts to halt the Kremlin’s funding of the war will work in time to stop the advance on Kyiv. However, whilst the war rages on, it is also ravaging the global economy once again. Oil prices have risen to record highs surpassing $120 per barrel, and global supply chains will once again be slowed due to the new sanctions, trade bans and airspace restrictions.

This war is frowned upon internationally, and the economic pressure is mounting on the Kremlin, but it’s the general people of Russia, majority of which are also against the war in Ukraine, who are suffering from these sanctions as they unwillingly shoulder the immense international pressure and condemnation for their leaders’ actions.

As the popular phrase goes, “nobody wins in war” (unless of course, you are a western “defence” company).

March 07th 2022 | 11:00 PM

11 views0 comments


bottom of page