It is no coincidence that three of the five stocks that performed best on the Copenhagen Stock Exchange on Friday afternoon are Vestas, NKT and Rockwool. The share price of all three stocks has risen several percent in a short time, after news of an imminent agreement on the German debt brake is on the way.
The CDU/CSU, SPD and the Greens have agreed to disregard the previous limit on how much the German government can borrow and instead open up more investments in, among other things, energy, infrastructure and defense. And it makes sense that investors have apparently become even more optimistic following the reports from Germany.
That's what Jacob Pedersen, head of equity research at Sydbank, thinks.
- It's really good news if Germany is ready to ramp up investments that can create some growth in the economy, he says, elaborating:
- And when a stock like Vestas leads, it's partly because the Greens are also in the agreement, he says.
Jacob Pedersen also notes that the German DAX index is rising by a full 1.9 percent. - just as the other European stock markets are also in the red.
- It is a kind of spinal reaction to a Europe that is hopefully getting into gear in some selected sectors, which are clearly centered on these investment ambitions.
- The companies in the industries that are being targeted to be strengthened, and their suppliers, stand to get the strongest tailwind, he says.
Vestas shares rose by 5.9 percent on Friday at 2 p.m., NKT rose by 4.2 percent and Rockwool rose by 3.6 percent. The debt brake was introduced in 2009, while Angela Merkel was Chancellor of Germany. It sets an upper limit for the structural budget deficit in Germany of 0.35 percent of GDP.
jel /ritzau/
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