Defense

After a decline in demand in China, Dräger foresees a lasting reduction in the market's importance. But the medical technology and safety equipment company could benefit from increased defence spending in Germany.

Defence expenditure is going to rise sharply in Europe. At last week's earnings presentation, Renk CEO Alexander Sagel discussed the likely impact on the company of strengthening the Bundeswehr.

The current ESG debate illustrates that sustainability is not just about being green – but also about geopolitics. Defence industry investments are becoming a new reality for sustainable funds.

The European Union is considering changes to the stability pact to accommodate higher defence spending. But it should look closely at how bond investors might react.