Ukraine ushers in a ‘new era’ for defence stocks
As the war in Ukraine rages on, IGTV’s Angeline Ong takes a look past defence sales headlines to explain why defence stocks are likely to continue outperforming in 2023.
New era
Ukraine is ushering in a 'new era' for German defence stocks like Rheinmetall. Germany is buying 18 Leopard 2 tanks and 12 self-propelled howitzers to make up for Ukraine supplies, according to a member of the parliamentary budget committee, speaking to Reuters.
Charts tell the story
Let us have a look at Rheinmetall AG. As you can see there, a very clear upward trend, since the Ukraine crisis began. Same story for many other stocks out there, that are exposed to this trend. There’s Babcock International Group PLC and BAE Systems PLC. Also, not forgetting Dassault Aviation SA and Thales SA. It’s not just the Ukraine crisis one needs to watch, but also rising tensions between the US and China. To add to that, we have this ‘era of distrust’ between countries that isn’t going to change any time soon.
JPMorgan bullish on European defence
Many big trading houses have taken note. JPMorgan Chase & Co (All Sessions), for example, says European defence is set to keep growing and outperforming in 2023, supported by higher ammunition orders across the globe, as there is no end to the Ukraine war in sight.
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