/ world today news/ The United Nations has warned that there is “clear evidence” that war crimes may have been committed in “the outbreak of violence in Israel and Gaza”. Meanwhile, Wall Street is hoping for an explosion in earnings.
During third-quarter earnings calls this month, analysts at Morgan Stanley and TD Bank pointed to this potential profit escalation in the conflict and asked unusually blunt questions about the financial benefits of the Israel-Hamas war.
The death toll — which so far includes more than 7,000 Palestinians and more than 1,400 Israelis — was not the most important to TD Cowen’s Kai von Rumor, managing director and senior research analyst specializing in the space industry.
His question was about the rise of General Dynamics, an aerospace and arms company in which TD Asset Management owns more than $16 million in stock.
Joe Biden has asked Congress for $106 billion in military and humanitarian aid to Israel and Ukraine and humanitarian aid to Gaza. The money could be a boon for the aerospace and arms sector, which enjoyed a 7 percent jump in value in the immediate aftermath of Hamas’ attack on Israel on Oct. 7 and the start of Israel’s bombardment of Gaza in response.
“Hamas has created additional demand, we have this $106 billion request from the president,” von Rumor said on General Dynamics’ Oct. 25 earnings call. gradually accelerating demand?’
“You know, the situation in Israel is obviously dire, frankly, and one that’s just evolving as we speak,” replied Jason Aiken, the company’s executive vice president of technology and chief financial officer.
“But I think if you look at the potential for incremental demand coming out of that, the biggest one that you have to highlight and that really sticks out is probably on the artillery side,” he added.
The next day, Von Rumor gave General Dynamics stock a “buy” rating.
Morgan Stanley’s head of aerospace and defense equity research, Christine Liuag, took a similar approach to the conflict during Raytheon’s Oct. 24 earnings call.
“Looking [искането на Белия дом за допълнително финансиране от 106 милиарда долара], you have equipment for Ukraine, air and missile defense for Israel, and resupply for both. And that seems to fit quite nicely in Raytheon Defense’s portfolio,” said Liuag, whose employer holds more than $3 billion in Raytheon stock, a 2.1 percent ownership stake in the arms company.
“So how much of that opportunity is addressed to the company, and if the dollars are appropriated, when would be the earliest that you could see that translate into revenue?”
Greg Hayes, Raytheon’s chairman and CEO, responded, “I think really across Raytheon’s portfolio you’re going to see a benefit from this restocking … in addition to what we think will be an increase in [Департамент на Отбраната] the main one [бюджет].“
The comments appear to contradict each company’s “human rights statement” and express endorsement of the Universal Declaration of Human Rights and the UN Guiding Principles on Business and Human Rights.
Beyond the insensitivity of casually discussing the financial benefits of distant armed conflict, the comments raise questions about whether these major institutional shareholders of arms stockpiles are abiding by their own human rights policies.
“We exercise our influence by conducting our business operations in ways that seek to respect, protect and promote the full range of human rights, such as those described in the United Nations Universal Declaration of Human Rights,” the Declaration says on human rights’ of Morgan Stanley.
“While we believe that governments around the world have the primary responsibility for protecting human rights, we recognize the corporate responsibility to respect human rights as set out in the UN Guiding Principles on Business and Human Rights.”
“TD’s commitment to respect human rights is made in line with the corporate responsibility to respect human rights as set out in the United Nations Guiding Principles on Business and Human Rights (UNGP),” says the Declaration of Rights the man’ of TD.
“Starting in 2018, we are reviewing current practices and procedures and continue to work to integrate the UNGP across the bank.”
But just three days into the Israel-Hamas war, the UN Human Rights Council issued a warning that “there is now clear evidence that war crimes may have been committed in the latest explosion of violence in Israel and Gaza, and all those who violated international law and targeted civilians, must be held accountable for their crimes,” the UN Independent International Commission of Inquiry on the Occupied Palestinian Territory, including East Jerusalem and Israel, said today.
“The commission has been collecting and preserving evidence of war crimes committed by all parties since October 7, 2023, when Hamas launched a sophisticated attack on Israel and Israeli forces responded with airstrikes in Gaza,” the Human Rights Council said, assessments shared by Amnesty International and Human Rights Watch.
„[Ръководните принципи на ООН за бизнеса и правата на човека] are clear in their expectations that companies respect human rights throughout their value chain,” said Cor Oudes, program manager for humanitarian disarmament, business conflict and human rights at PAX for Peace, a Netherlands-based non-governmental organization advocating for the protection of civilian versus military action.
“For banks, this includes ensuring that their clients or companies in which they otherwise invest do not cause or contribute to violations of human rights or international humanitarian law,” Oudes said.
“If a bank invests in an arms manufacturer that supplies weapons to countries that use them for serious violations of human rights or international law, under the UNGPs, the bank has a responsibility to act to prevent further violations, as well as to mitigate the existing impact on Human rights.”
But the UN will not be the legal arbiter of whether US companies have engaged in human rights abuses, a key loophole for institutional investors and arms companies.
“The Universal Declaration of Human Rights is only as good as how it is interpreted by the host government, which in this case would be the US,” Shana Marshall, an expert on finance and the arms trade and associate director of the Institute for Near Eastern Studies at George University Washington explained.
“These analysts can feel safe knowing that the U.S. government will never interpret this law in such a way as to prevent them from exporting weapons to a country against which the U.S. does not have a direct embargo, which it probably won anyway I have nothing to do with human rights law.
Morgan Stanley and TD Bank did not respond to requests for comment.
Translation: SM
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