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Good morning.
Business is booming for the world’s biggest defence companies. The sector’s order books are near record highs after growing by more than 10 per cent in just two years because of rising geopolitical tension in Ukraine and elsewhere.
An analysis by the Financial Times of 15 defence groups, including the largest US contractors, Britain’s BAE Systems and South Korea’s Hanwha Aerospace, found that at the end of 2022 — the latest for which full-year data is available — their combined order backlogs were $777.6bn, up from $701.2bn two years earlier.
The trend’s momentum continued into 2023. In the first six months of this year combined backlogs at these companies stood at $764bn. Read our full analysis, which also details investors’ sustained interest in the sector.
Related read:
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War in Gaza: Israel has begun ground combat operations in the central area of Gaza, while more than 100 hostages taken during the October 7 Hamas attack remain held in the strip.
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Five more top stories
1. Toyota’s global production has reached an all-time annual high with one month left of 2023. For the world’s biggest carmaker by sales, it represents a vindication of a strategy that is often criticised for not putting enough emphasis on selling pure electric vehicles. However Toyota has continued to struggle in China.
2. Chinese gaming stocks have regained some ground after Beijing appeared to soften its rhetoric on the sector in the wake of new regulations for the world’s biggest gaming market. Tencent shares rose more than 5 per cent in Hong Kong and rival NetEase rose about 10 per cent yesterday after a record sell-off last week. Here’s what analysts and fund managers had to say about regulators’ plan.
3. Turkey’s government has delivered another steep minimum wage rise amid a long-running cost of living crisis, complicating efforts to rein in chronic inflation but likely to resonate with voters before nationwide municipal elections next year. The monthly minimum wage will be raised to a net TL17,002 ($578) per month in 2024, double the rate at the start of this year.
4. Big Tech has vastly outspent venture capital groups with investments in generative artificial intelligence start-ups this year.
The huge outlay, which exploded after the launch of OpenAI’s ChatGPT in November 2022, highlights how the biggest Silicon Valley groups are crowding out traditional tech investors for the biggest deals in the industry. Here’s what this means for the much-hyped sector.
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More AI news: The New York Times has become the first major US media company to sue OpenAI and Microsoft over their AI chatbots, alleging the tech companies have taken a “free-ride” on millions of articles to build the groundbreaking technology.
5. Jacques Delors, the former president of the European Commission and one of the main architects of today’s EU, has died at the age of 98. Delors was one of the most consequential figures in postwar Europe, presiding over the creation of the EU’s single market and laying the groundwork for economic and monetary union. Learn more about his life and impact here.
Bid for lunch with the FT’s Martin Wolf, Gideon Rachman or our editor, Roula Khalaf, with all proceeds going to the FT’s Financial Literacy and Inclusion Campaign charity. Bid now or find out who else is on the menu at ft.com/appeal.
We’re also reading . . .
The most-commented stories of 2023
Perhaps unsurprisingly, the pieces that most engaged the FT’s readers in debate this year were about the war in Ukraine. One story, which drew more than 2,200 comments, came at a critical point of the war in January, when we reported that Germany was resisting pressure from other western allies to send its Leopard 2 battle tanks to aid Kyiv in its counteroffensive against Russia (Berlin later relented).
In August, the demise of the rebellious Russian warlord Yevgeny Prigozhin, who had led his notorious Wagner paramilitary group in a failed mutiny against Moscow, also attracted vigorous discussion and speculation: was this an act of retribution from Vladimir Putin?
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Additional contributions from Sarah Ebner and Tee Zhuo