Reference News Network, November 24 report: According to the Spanish newspaper "El Mundo" website on November 22, the new attempt by US President Trump to achieve a peace agreement in Ukraine has hit European defense companies. Since the leak of news that the US president may have outlined the general framework of a new ceasefire agreement with Russia, the market value of companies in this industry has fallen by over 22 billion euros within three days, and overall market volatility has further exacerbated the decline, bringing their stock prices back to September levels.
The market is not only losing out on potential orders from Ukraine to supplement its arsenal, but also the willingness of European governments to maintain a firm stance on defense plans. Despite commitments to NATO, the market generally believes that without conflicts on their doorstep, European governments will not allow their finances to be so strained to increase defense spending.
The companies most affected are Rheinmetall. This German defense giant's stock price once rose to very high levels, partly due to its ammunition business and the demand for ammunition caused by arms supplies to Ukraine and replenishing European countries' arsenals, which allowed its revenue to grow earlier than its competitors. Investors now see it as a time to take profits. After falling 7.18% yesterday, the company's stock fell a total of 12% over three days. The company's market value alone shrank by 9.657 billion euros, accounting for nearly half of the total market value loss of all European defense companies.
Other companies that saw significant declines yesterday include Leonardo in Italy (down 6.24%) and Saab Group in Sweden (down 5.36%). From an absolute market value perspective, the companies that were more severely impacted include BAE Systems in the UK, whose market value shrank by nearly 3 billion euros, and Thales in France, whose market value decreased by 2.608 billion euros.
In the domestic Spanish market, Indra's stock price fell 4.82% over three days, and its market value shrank by 783 million euros. The company's stock price touched 50 euros per share at the beginning of the week, and its opening price next Monday will be 45.06 euros.
The European defense industry has been the biggest gainer this year. The European defense stock index has risen 70% year-to-date. If it maintains this gain until the end of the year, this will be the best year for this select index since its creation. Since the outbreak of the Russia-Ukraine conflict in 2022, the market value of companies like Rheinmetall has grown tenfold, and they expect to benefit from budget allocations by European governments, as well as plan to develop in the United States. (Translated by Su Jiawei)
Original article: https://www.toutiao.com/article/7576196223649743394/
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