(New: Xetra prices, more information and classifications on Renk and Hensoldt)

FRANKFURT (dpa-AFX) - In view of the war in Ukraine and stronger military deterrence demanded by many European countries, investors continue to focus on defense stocks. Driven by the prospect of further increases in defense spending, Rheinmetall shares continued their record run on Monday with a jump above 400 euros. Their price rose to 404 euros. The gain then dwindled to 2.7 percent at a price of 398.70 euros.

Traders referred to statements made by Defense Minister Boris Pistorius (SPD). At the Munich Security Conference, he stated that spending of up to 3.5 per cent of gross domestic product (GDP) on defense may be necessary - a figure that exceeds the two per cent agreed by the NATO member states. This target was set at a NATO summit in 2014.

The two percent mark has also recently come under scrutiny due to statements made by Republican presidential candidate Donald Trump. He had threatened not to grant American support to defaulting NATO partners in the event of a Russian attack. According to provisional NATO figures, Germany only contributed 1.6 percent of GDP last year. This year and in the coming years, however, the two percent mark is to be reached with the help of special funds of 100 billion euros.

Meanwhile, Rheinmetall is planning to produce ammunition in Ukraine. A letter of intent for the construction of a new plant for the production of artillery ammunition was signed with a Ukrainian partner company on the fringes of the security conference. Although one trader did not see this as an individual price driver, investors' interest in defense stocks generally remains unbroken due to such news.

The shares of other German defense companies also received a further tailwind on Monday. This applied above all to the newcomer to the stock market, Renk, whose shares rose by almost twelve percent to 28.22 euros at the beginning of the week. Compared to the issue price of 15 euros, they extended their rise in the still short Borsen career to almost 90 percent. However, it was not quite enough to set a new record, as the share price of the drive specialist had already been a tick higher at 28.74 euros in the previous week.

Hensoldt is still some way off the record level, despite a rise of 2.8 percent on Monday. In April 2023, the shares of the defense electronics manufacturer were already a good deal higher at 37.54 euros than the current price of 34.94 euros. A further increase of 7.5 percent would be required to reach the record level./tih/ajx/mis