For UBS marketing purposes

Astronaut Edwin E. Aldrin Jr., lunar module pilot of the first lunar landing mission, poses for a photograph beside the deployed United States flag during Apollo 11 extravehicular activity (EVA) on the lunar surface. (ddp)

Space Still over the moon, 50 years later

18 July 2019, 9:57 pm CEST, written by UBS Editorial Team

This week marks the 50th anniversary of the first lunar landing. A lot has changed since Neil Armstrong took his “one giant leap for mankind”. One thing that has not, however, is the dream of space travel.

Half a century on, we continue to be inspired by the In a statement last week, it announced it has customer powerful imagery from the 1969 lunar landing and the idea reservations from more than 600 people in 60 countries of going where no one has gone before. representing about $120 million in potential revenue. That translates to USD 200,000 a ticket. In an age where images on Instagram spur tourists to flock to the corners of the earth so that they too can say they Short sightseeing trips to space aboard Blue Origin’s New have “been there, done that”, it is not hard to imagine the Shepard rocket are likely to cost around $200,000 to prospects for space tourism. After all, a picture of yourself $300,000, at least to start, Reuters reported last July. floating on the moon with a sea of stars in the backdrop does make for an extraordinary selfie! Space X, meanwhile, has booked Japanese billionaire Yusaku Maezawa to be its first customer to ride around the Thanks to big investments by billionaires including Jeff moon in 2023. It is also building a multi-billion dollar rocket Bezos (Blue Origin), Elon Musk (Space X) and Richard called Starship, designed to carry 100 humans to Mars. Branson (Virgin Galactic), dreams of space tourism could become a reality. While these bold plans might seem a bit pie-in-the-sky to some skeptics – this is, after all, rocket science - the Virgin Galactic, which specializes in commercial human Chief Investment Office (CIO) believes the space economy spaceflight, says it intends to offer customers "a unique, is reaching an inflection point. multi-day experience" that includes "out-of-seat gravity and views of Planet Earth from space." "Several factors have converged to bring us closer to an inflection point in the business of space than at any other UBS Investment Insights For UBS marketing purposes

time. These include a surge in private sector investment, evident from a proliferation of new space start-ups, as well as major advances in both rocket and satellite technology," says CIO analyst Carl Berrisford. "We see parallels here with how the global internet, coupled with advances in processing power, opened up vast and disruptive business opportunities at the turn of the century."

"The key to successful space tourism will be rocket reusability. The two key players, Virgin Galactic and Blue Origin, are pursuing this route through their respective SpaceShipTwo and New Shepard rocket models," says Berrisford.

CIO expects the space economy to grow to USD 926bn by 2040 from USD 340 bn currently, driven by sustained capital investment by the private sector and technological advances in rocket and satellite technology.

While the billionaires do the heavy lifting in the early days, mainstream investors can also participate in this space, pun intended.

"Investment exposure at this early stage is best gained via existing listed companies in aerospace, satellite and communications segments," says Berrisford. "We think there is an ample spectrum of companies across new sectors that will benefit from space in the coming years, some by raising existing investments and others by investing for the first time."

Read more in Longer Term Investments: Space, 30 November 2018 and Space Tourism: Ready for Blast Off, March 1, 2019.

Main Contributor: Shanthi Bharatwaj

UBS Investment Insights For UBS marketing purposes

Important information As a firm providing wealth management services to clients, UBS Financial Services, Inc is registered with the U.S. Securities and Exchange Commission (SEC) as an investment adviser and a broker-dealer, offering both investment advisory and brokerage services. Advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate contracts. It is important that you carefully read the agreements and disclosures UBS provides to you about the products or services offered. For more information, please visit our website at www.ubs.com/workingwithus. ©UBS 2019. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. There are two sources of UBS research. Reports from the first source, UBS CIO Wealth Management Research, are designed for individual investors and are produced by UBS Wealth Management Americas (which includes UBS Financial Services Inc. and UBS International Inc.) and UBS Wealth Management. The second research source is UBS Investment Research, and its reports are produced by UBS Investment Bank, whose primary business focus is institutional investors. The two sources operate independently and may therefore have different recommendations. The various research content provided does not take into account the unique investment objectives, financial situation or particular needs of any specific individual investor. If you have any questions, please consult your Financial Advisor. UBS Financial Services Inc. is a subsidiary of UBS AG and an affiliate of UBS International Inc.

UBS Investment Insights