- I think that investors have been reminded that there is a great need for this type of product when we have a Russia crisis or Ukraine crisis close to us, says Danske Bank's chief analyst Björn Enarson.
Since the turn of the year, the stock exchanges in New York, Frankfurt and Stockholm, among others, have had a negative trend.
But there are exceptions.
In recent months, there have been happy faces among many of the arms and military industry shareholders.
Following, among other things, Russia's military escalation around Ukraine in December and the fact that the threat of war has become increasingly apparent, the stock market has gained a winner: arms shares.
New focus after the Russian crisis
American Lockheed Martin and Raytheon Technologies, British BAE Systems and French Thales Group are some of the world's largest weapon system manufacturers whose share prices have risen sharply recently.
- In fact, quite strong order intake trends have been seen ever since the Georgia crisis, which may have accelerated with the Crimean crisis in 2014. So there is nothing that may have changed here and now in terms of order intake for the companies, but it has been strong for a long time.
But the focus from investors has certainly changed due to the Russian crisis, says Björn Enarson.
The listed arms industry is a sprawling industry.
Few companies manufacture only military products.
Often there is also a large civilian production.
The aircraft industry is an example.
Therefore, some of the companies that manufacture both civilian and military aircraft have seen a decline in orders for civilian aircraft during the corona pandemic, while orders from Defense Ministries around the world are more cyclical.
Saab exception
Björn Enarson has also followed the Swedish arms group Saab for a long time.
In recent months, Saab's share has not developed as much as several of the largest competitors' shares, although the company's profit development has been strong in recent years and is expected to be positive also in the future, partly due to increased Swedish defense appropriations.
The weak share development can probably be partly linked to, among other things, the missed Jas 39 Gripen deal with Finland in December.