Renk and Hensoldt Drive European Defence Index to New Heights

Amid ongoing security tensions in Europe, defense stocks have gained renewed attention, particularly just before the German holiday.

Hensoldt and Renk, both listed on the MDAX, have emerged as top performers, achieving record-high stock prices and pushing the European Defence Index to new all-time highs. Hensoldt, a leading provider of sensor and radar systems, announced plans to expand its production capabilities with a new facility near Ulm. This site will focus on the mass production of radars for air defense and drone countermeasures, with a target of manufacturing around 1,000 radars annually by 2027. The company plans to invest a mid-double-digit million-euro sum into this expansion. While development and production at Ulm remain central, Hensoldt's radars are already in use in the Ukraine conflict, helping protect civilians from Russian air attacks, and are integrated into the Eurofighter jet.

The German government maintains a blocking minority of over 25% in Hensoldt, which was once part of Airbus.

Over the past three years, Hensoldt has invested €1 billion, including a new optronics site in Oberkochen, and manufactures periscopes for armored vehicles and submarine optics. Meanwhile, the Renk Group, a global leader in efficient drive and control technology, especially for tanks and naval vessels, is also expanding its gearbox production. The company plans to shift from craft production to small-batch manufacturing. This transition to standardized workstations will allow more gearboxes to be produced in the same timeframe, increasing annual capacity from several hundred to over a thousand units at its Augsburg facility. This strategy aims to enhance production efficiency and streamline logistics with a new gearbox design that accommodates different platforms and previously incompatible spare parts. Today, Hensoldt shares climbed to a new record high of €112.10, while Renk shares, having quadrupled in value this year, reached a peak of €88.43 during Xetra trading.

Both companies are among the top five weighted stocks in the European Defence Index, which includes 20 European defense companies. The index itself reached historic levels, nearly hitting 140 points. The European defense industry remains promising amid geopolitical tensions and increased investment. Investors interested in the European Defence Index can explore various index certificates with varying risk levels, which can be traded like regular stocks. Notably, the certificate with WKN DA0ACA, which allows investors to benefit directly from the European Defence Index's performance, has been nominated for the 'Certificate of the Year' at this year's Certificate Awards. Participation in the awards offers a chance to win prizes.