November 16th saw Eutelsat’s share price crash 5 per cent and SES suffer a 2 per cent fall on the day. In the US Viasat and Loral both fell 3 per cent with Echostar and Iridium falling 2 per cent. Asian satellite shares also fell.
The reductions were seen as being “excessive” according to analysts from investment bank Exane/BNPP.
“We believe this was linked to the disclosure of a Russian anti-satellite (ASAT) missile shooting down an old satellite,” said Sami Kassab from Exane/BNPP. “The destruction resulted in thousands of debris pieces spreading at high velocity. This act was widely condemned and largely reported by global media outlets. Investors might have discounted the risk of asset damage.”
“We see Eutelsat and SES share price reaction on this geopolitical development as overdone,” says the bank’s report. “However, we note that in the last ten years the US, China or India also conducted such tests. Russia just showcased its ability to shoot down satellites. The Russian ASAT missile like the other nations targeted a satellite in Low Earth orbit (LEO). Russia’s satellite was orbiting at 485km. As we have discussed in our latest sector note Eutelsat/SES: Beyond the final frontier, debris have become an issue for LEO orbits. However, there are hardly any debris in MEO or GEO. We believe that SES does not carry any significant risks to space debris or ASAT destruction due to its orbit levels. Eutelsat owns 23 per cent stake in OneWeb whose satellites are in LEO (at 1200km). It is somewhat more exposed to that topic but at this stage the company generates all its revenues from GEO orbits. The main companies at risk of space debris are SpaceX and Amazon (Kuiper). SpaceX has Starlink satellites at 550km, close to the Russian ASAT orbit.”