Happy Christmas, war is over? Hardly. It is only midsummer and a complex cascade of events would need to follow the failed Russian coup to bring peace to Ukraine. A sell-off in European armaments stocks is premature.
Shares in Saab of Sweden and Germany’s Rheinmetall tumbled as much as 6 per cent on Monday morning. Investors are right that Yevgeny Prigozhin’s shortlived insurrection weakened Russian president Vladimir Putin. But prospects for European defence companies have not worsened correspondingly.
Europe’s defence spending ticked up markedly after Russia’s 2014 Crimean incursion. Last year, with the stimulus of the Ukraine war, the outlay rose 14 per cent to $480bn, according to the Stockholm International Peace Research Institute. Compare that with global growth of 4 per cent.