The stock market reactions on Monday indicate continued turbulence in geopolitics. Among the European defense giants, German Rheinmetall (+18%), Italian Leonardo (+16%), and British BAE Systems (+13%) saw significant gains. Even Swedish companies with ties to the defense industry performed well, with smaller companies like Invisio, Astor, and MilDef all up around 7%, while the giant Saab saw double-digit growth.
The reason behind these movements lies in the aftermath of the failed meetings between Donald Trump, JD Vance, and Ukrainian President Volodymyr Zelensky. Over the weekend, European leaders gathered to offer Ukraine additional support and increased defense in the war against Russia. At the same time, concerns are growing that the US may withdraw its support for the country entirely.
It’s crucial to note that the largest shareholder in Saab is the Wallenberg family through Investor, holding over 30% of the company. Despite the recent strong performance, the investment company has not reduced its stake, which is now valued at 58 billion SEK. Through the Wallenberg family foundation, they also own shares worth an additional 17 billion SEK.
Other prominent figures in the financial elite have also invested in the defense industry. Real estate magnate Rutger Arnhult, CEO of Corem, recently invested around 7 million SEK in Saab, with returns exceeding 50%. Gerald Engström, the founder of Systemair, holds a stake in Saab as well. After an impressive 340% increase in value since his initial purchase in 2015, Engström has sold a portion of his shares.
MilDef, a company active in the defense and security industry, has shown remarkable growth since its listing on the Stockholm Stock Exchange in 2021. Many notable financial profiles, such as Martin Gren and Charlotta Söderström, have benefited from this growth. Gren recently sold his entire stake in MilDef, while Söderström retains a substantial holding. Tom Persson, another shareholder, has been selling off parts of his stake in the company.
In Norway, veteran stockbroker Per-Dietrich Johansen made a lucrative investment in Kongsberg Gruppen, a defense technology provider, six years ago. The stock has surged by 1200%, prompting Johansen to secure a significant profit. Concerns over Trump’s trade policies have led him to cash out. Two of Norway’s richest individuals, Jakob Hatteland and Arne Blystad, also sold their Kongsberg shares for tens of millions at the end of last year.
The global defense industry is experiencing significant shifts due to geopolitical tensions and changing trade dynamics. As investors navigate these uncertainties, the performance of defense stocks continues to be closely monitored for potential opportunities and risks.