In the front line of the conquerors, we obviously find the great historical powers, the first actors in the conquest of space: the United States (NASA), Russia (Roscosmos) and Europe (ESA). At their side, the newcomers who have no intention of letting this new playground escape them: ambitious China (CNSA), modest India (ISRO), consensual Canada (CSA), discreet Japan (JAXA) and the United Arab Emirates (UAE SA), in search of international recognition and new levers for growth and spending.
In 2021, the exploration of the galaxy is no longer the preserve of nations alone, and a host of private companies are jostling and jostling with checkbooks to carve out a place for themselves. These New Space players are often controlled by billionaires and are called SpaceX (by Elon Musk), Virgin Galactic (Richard Branson) and Blue Origin (Jeff Bezos). On the sidelines, Larry Page (co-founder of Google) and Mark Zuckerberg (Facebook) also shared their spatial ambitions. to these we must add ecosystem start-ups, institutions linked to states or continents and some antics, such as the actor Tom Cruise and the director Doug Liman, who want to make a film in space.
Set aside for a few decades, space activity, this year more than ever, is at the heart of the concerns. 2021 has seen many star events and the return of competition between major nations. If China’s recent arrival in the arena has revived the desires of some, it is above all the rare proximity of Earth and Mars this spring that has helped to revive global space activity. Overview (of the universe) of each person’s goals.
Not surprisingly, space exploration remains a means for states to display strength and superiority, both internationally and domestically. For the French CNES (National Center for Space Studies), it is also about ensuring good cooperation between nations in space and maintaining peace between the participants. In 2022, economic issues should take precedence over political considerations. Space is indeed a great playground for nations as well as for private companies.
The stars around us are full of exploitable resources. On the Moon, helium 3, a rare isotope on Earth and a potential energy source, is abundant. Rare earths (cerium, terbium, scandium, mainly Chinese property on the blue planet) are also present in large quantities.
Our natural satellite, as well as Mars, is covered in regolith, a dust from which water can be extracted. By mixing hydrogen and oxygen it would be possible to power a rocket engine. The moon could then serve as an outpost for explorations of the red planet, which is no less than 8 months away from Earth. Tourism will also be one of the catalysts for space activity. Satellite activity will not be exceeded. While frequencies are limited in number and allocated by the International Telecommunications Union, based in Geneva, the race for speed is already underway for satellite internet players.
Satellite communications, which today represent less than 1% of the global data transport market ($6 billion out of the $800 billion annually), represent a large reservoir of growth. The entry ticket to form a constellation is high (between 2 and 10 billion dollars), but does not hinder the multiplication of players interested in the prospects of financial benefits. Utilization of satellite data will complement ground-based data collection, storage and distribution facilities. The more the amount of data increases, the more the need for satellite will be felt.
According to the US bank Morgan Stanley, revenues generated by space should increase from 350 billion dollars in 2016 to more than 1,000 billion in 2040, of which 40% will come from the satellite internet sector.
To take advantage of this enthusiasm, it is possible to review lively titles of companies exposed to the theme, such as Airbus, Boeing, Iridium, Virgin Galactic and other Lockheed Martin. There are also mutual funds and indices that track the sector. This is the case with the Solactive Space Technology Index, which includes twenty stocks such as Dish Networks, Kratos, Viasat, Boeing or Ball. Vontobel has issued a Tracker certificate on this index with a geographical exposure which, quite logically, gives the USA credit (81.6% of exposure).
Product: Open-End Tracker Certificate on the Solactive Space Technology Index
ISIN code: DE000VX0EHA2
Risk indicator: 5/7
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The Open-End Tracker certificate on the Solactive Space Technology Index is aimed at investors specializing in this type of product and should only be purchased by investors with specific knowledge. Vontobel recommends that potential investors consult the “Risk Factors” section of Tracker Certificate Base Prospectus. The risk factors as described below represent the most important risk factors.
Risk of price loss : this product poses a risk of partial loss of the invested amount at any time. The loss of the invested capital can even be total in the event of a particularly unfavorable development of the underlying.
Market risk : this product replicates the performance of its underlying and therefore may experience significant price fluctuations at any time, which in some cases may result in the total loss of the invested amount. This product does not include capital protection.
Risk of change: the product’s underlying is an index quoted in US dollars (USD), whose components may be quoted in currencies other than USD. The price of the underlying index thus depends on the exchange rate between the currency in which each of the components is listed and USD. Since the product is listed in euros, its value therefore also depends on the exchange rate between the euro and the US dollar. In the event of an unfavorable development of these exchange rates, the product may lose value.
Spread risk: The spread that the issuer applies to the price of the product is likely to change over time. This development can be disadvantageous for the investor.
Liquidity risk: it is possible that the offer of the product is temporarily interrupted.
Credit risk : By acquiring this product, the investor assumes a credit risk on the issuer and its possible guarantor.