On the winners – Yoram Gabison in Haaaretz:

‘The war in Ukraine is a wake-up call for Europe, and the result could be seen on the stock market screens. European defense companies soared, in contrast with the trend in the capital markets. The share price of Germany’s Rheinmetall jumped by 30 percent, Italy’s Leonardo by 17 percent; the French firm Thales, one of Europe’s leading defense companies, by 13 percent; Great Britain’s BAE by 14 percent; and Sweden’s Saab by 17 percent.’

(…)

‘German Chancellor Olaf Sholz provided the immediate trigger for the sharp increase in the defense companies’ shares, including Elbit’s. Sholz announced on Sunday that Germany would allocate a one-time sum of 100 billion euros ($112.7 billion) in the 2022 budget to strengthening its armed forces, and in so doing doubled its 2022 defense budget. Sholz also announced that the country’s defense budget would permanently increase to 2 percent of its GDP, and proposed that this commitment be anchored in the German constitution.’

(…)

‘The Israeli defense industry is describing a massive volume of demand all over Europe, primarily in the countries bordering Russia or in proximity to the war zone: Hungary, Bulgaria, the Czech Republic, Romania, Slovakia and Sweden are interested in an immediate supply of drones, electronic warfare systems, control and monitoring systems, communications and advanced weapons systems.’

(…)

‘Another cause for the increase in demand in the defense market is the ultranationalist wave aroused by the COVID-19 crisis, and accompanying problems such as the shortage in spare parts. Sources in the Israeli defense industry estimate that in the medium range, European countries that neglected local defense production will reopen their local defense industry.’

Read the article here.

Time to invest in defense companies, if you don’t do it yourself, your retirement fund or bank might do it for you.

Also note, the distrust of global trade and new nationalism. European countries might reopen their local defense industry. ‘Pacifist’ Germany has a huge defense industry.

The anti-globalization trend is not a good omen.