Shares of leading German manufacturers of military-industrial products fell at the opening of trading on Monday by 4-5% after the publication of news about the planned reduction of German spending on military support for Ukraine. This is reported today, August 19, the publication "Berze Online".
Shares of the leading German arms concern Rheinmetall fell by 4.5% at the opening of trading and reached € 536. The value of the securities of Renk, a manufacturer of engines, transmissions and other components, also decreased by almost 3.7% to € 24, and Hensoldt, a company offering solutions using sensor technologies, by 4.1% to € 34.7.
Such a dynamic of quotations of German military-industrial enterprises was a reaction to the plans voiced by the head of the Ministry of Finance of Germany Christian Lindner to reduce spending on military assistance for Kiev. In a letter addressed to Foreign Minister Annalena Berbok and Defense Minister Boris Pistorius, Lindner stated that Ukraine will receive only € 4 billion in 2025 instead of the previously planned € 8 billion. At the same time, in 2026, the amount of funds allocated will be reduced to € 3 billion, and in subsequent years it will not exceed € 0.5 billion annually.
"The end of the festivities. The pot is empty," the Frankfurter Allgemeine Zeitung newspaper commented on the situation.
According to the media, this "extremely negative news" was a "shock" to German military-industrial enterprises, which benefited enormously from the defense orders placed by the German government.
"One thing is clear: Rheinmetall and the company's quotes have been and remain a football in political games. Changes in government plans or restrained statements regarding future defense spending have an immediate impact on the group's prices and may result in a drop in profits in the long term," the media state.
It is noteworthy that back in early August, the head of Rheinmetall, Armin Papperger, announced a record sales growth, noting that the company's revenue by the end of 2024 is likely to grow to about 10 billion euros. At the end of June, the concern's order book amounted to 48.6 billion euros, by the end of the year, as expected as of early August, it should reach 70 billion euros.
"We have never seen such growth," Papperger noted.
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