European defense stocks hit record highs due to plans to strengthen Ukraine's defense
Kyiv • UNN
Shares of Rheinmetall, Saab, and Dassault Aviation rose by 8.9-15% after the announcement of Ukraine's defense. European leaders plan to create a “coalition of the willing” and allocate €200 billion for defense.
Today, March 3, the shares of European defense companies rose sharply. This happened against the backdrop of leaders' statements of support for Ukraine and fears of US assistance. Bloomberg writes about it, UNN reports.
Details
According to Bloomberg, shares of companies such as Rheinmetall, Saab, and Dassault Aviation rose by 8.9%, 11%, and 15%, respectively. The Goldman Sachs basket of European defense stocks hit a new record, increasing its annual gain to 63%.
Goldman Sachs recorded a record annual increase in defense stocks, which also indicates high demand for these companies' products.
All these changes were the result of discussions held at the London summit, where European leaders discussed the need to increase defense spending.
The UK and France, as key allies, are planning to create a so-called "coalition of the willing" to participate in the peacekeeping force and strengthen Ukraine's defense capabilities.
French President Emmanuel Macron said that the European Union should allocate 200 billion euros to strengthen defense, which was another factor contributing to the growth of the defense sector.
This decision reinforces the growing demand for weapons, especially for equipment produced by companies like Rheinmetall, which has already increased its value by 67% in 2023.
Even with a potential peace process in Ukraine, defense spending in Europe is expected to grow, as countries need to increase production of new equipment and weapons.
The CEO of BAE Systems, Europe's largest arms manufacturer, confirmed that these costs will continue to rise, allowing the company to benefit from arms sales to NATO countries. However, there are questions about whether defense companies in Europe are able to increase their production capacity to meet demand.
European leaders continue to demonstrate their support for Ukraine. France and the United Kingdom are not only strengthening defense capabilities, but are also planning to create a new group called Europe Plus, which could be joined by other countries, including Canada. This also underscores the growing level of cooperation on security and defense issues in Europe.
