(Bloomberg) – Washington explained that Europe needs to defend itself. For some investors, this is an invitation to download on defense shares.
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The stocks related to security were in the state of rupture this year, as Rheinmetall AG (RHM.DE) was classified in Germany as the best performance in the MSCI global index where money managers expect a leap in military spending. The bowl was spilled to Asia, where Hanoa in South Korea (012450). Hanwha Ocean Co (042660.KS). Both gathered more than 100 % to overcome all their regional peers.
The conversion of US President Donald Trump in traditional security alliances leads a new commitment to defensive spending and training in Asian contractors who are able to provide faster and cheapest weapons than their competitors. The axis of these shares for the first time gained traction during the Russia-Ukraine war and Trump's decision to stop military aid to Ukraine will strengthen this step.
“Trump says if Russia is attacking you, we do not protect you – you are alone,” said Keith Portoluzi, Managing Director of Infectfull Partners, a consulting company for investment companies. He said that he would lead to “Europe that is forced to intensify the defense industry.”
European Commission President Ursula von der Layen said on Tuesday that the European Union will propose to extend 150 billion euros (158 billion dollars) as loans to enhance defense spending. Germany will create a fund worth 500 billion euros as part of policy reform to address investments that affect the need in defense, according to Ferdrich Mirz's advisor.
On this background, Rheinmetall shares rose by more than 80 % this year and reached a record worth 1144.50 euros on Monday. They were traded with less than 100 euros before Russia invaded Ukraine.
Likewise, Hanwha Aerospace stock, the leading defensive contractor in South Korea, has achieved a series of its highest levels ever in 2025 more than weakness last year. Hanwha Ocean's shares have increased by 115 % since the end of December. The gains added 21 billion dollars to the market value of the share this year.
Trump moved to the temporary suspension to Ukraine to another gathering in the defense shares in Asia, where traders were weighing a pledge by Europe to support Ukraine with weapons. In Japan, IHI Corp. shares jumped.
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