European and British Ministry of Defense share rally as investors bet on high spending
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Shares of European Defense Corporation rally on Monday under Germany’s Rheinmetall, and investors bet that governments in the region will invest more in their own security.
In early trading in Frankfurt, Rheinmetall rose 9%, London’s BAE Systems rose 5%, while Thales climbed 4% in Paris. The STOXX European Aerospace and Defense Index has reached its highest level in more than 30 years.
How to respond to the decision of U.S. President Donald Trump to begin negotiations with Russia’s Vladimir Putin to end the Ukrainian war as European leaders gather in Paris.
Since returning to the White House, Trump has increased pressure on European allies to increase their defense spending to NATO’s 2% GDP target of over 2%, while floating the 5% new target at 5%, currently only Poland is about to arrive.
Senior European politicians have been committed to spending more on defense in recent days.
Rheinmetall CEO Armin Papperger said in a speech to Reuters on Friday that the company’s growth will exceed previous expectations.
“Being able to play in the same league as American weapons companies requires scale. To meet high demand in Europe, we need weapons on an industrial scale,” Papperger said in an interview with the Financial Times this month. Production – This is what politicians require. ”
Until Russia’s full-scale invasion of Ukraine about three years ago, European investors remained alert to support the defense sector due to moral concerns.
