As German rearmament kicks off amid a historic shift in national spending priorities, there are opportunities to be found across an industry scrambling to expand production after 80 years of reliance on US protection.
Investor attention has been focused on national giant Rheinmetall (DE:RHM), but prospects for stocks like Hensoldt (DE:HAG) and Renk (DE:RENK) have also been boosted as the German state turns over a new page on defence spending.
Last week, German foreign minister Johann Wadephul reacted positively to US President Donald Trump’s demand that Nato members spend a previously unthinkable 5 per cent of GDP on defence, more than double the bloc’s current 2 per cent target. Germany loosened its constitutional debt rules in March, which suggests an unmitigated rise in defence spending is on the table.