Fresh breeze for Rhine metal in the upcoming month

In a significant move, German defence and automotive company Rheinmetall has signed a letter of intent with Norwegian space company Andøya Space. This cooperation aims to expand commercial capacities for civilian and military space operations, meeting the increasing security demands in Europe due to the growing use of satellites and space resources.

The plan includes offering commercial launch services with flexible, rapid reaction capabilities from European soil. These services will utilise Tactical Responsive Launch (TacRL) capacities, ensuring secure and robust handling of satellites with shortened reaction times.

Rheinmetall's potential inclusion in the STOXX Europe 50, a European stock index comprising 50 leading listed companies, has contributed to the rise in the company's shares. If included, Rheinmetall shares would be bought by funds that track the STOXX Europe 50, potentially leading to further growth. The decision regarding Rheinmetall's inclusion in the STOXX Europe 50 will be announced this evening.

The rise in Rheinmetall shares is also attributed to an article in the Financial Times, potential index inclusion, and a press release from the DAX company. If included, Rheinmetall would join the STOXX Europe 50, which includes companies regardless of whether their country uses the euro.

Defence stocks like BAE Systems and Rheinmetall have seen gains at the start of the week due to a report in the Financial Times about potential military deployments in Ukraine. The report suggests plans for possible military deployments in Ukraine as part of security guarantees following the conflict. Ursula von der Leyen reportedly emphasized a "clear roadmap" with U.S. support in an interview about the potential military deployments in Ukraine.

Rheinmetall is already represented in the Euro STOXX 50, which reflects the 50 largest companies in the Eurozone. The company is also part of the European Defence Index, which bundles 20 defence values and includes heavyweights and hidden champions.

In 2022, Rheinmetall's share price fell by 11% in September, while in 2024, it rose by 7.6%. However, Rheinmetall's share performance in September has historically been sideways, with an average of -0.2% over the last ten years.

The CEO of Andøya Space, Ketil Olsen, and Troels Sandreid, the President of Andøya Spaceport, are leading the Norwegian space company. Thomas Berge Nielsen, CEO of Rheinmetall Nordic AS, expressed excitement about the cooperation.

Defence stocks are currently favoured by investors, making Rheinmetall an attractive option for those looking to invest in the sector. The cooperation with Andøya Space is expected to further strengthen Rheinmetall's position in the defence and space industries.