FRANKFURT (dpa-AFX) - German defense stocks continued to be sought-after investments on Monday in view of the volatile global security situation and in some cases continued their recent record run. The shares of electronics specialist Hensoldt reached a record high of 41.50 euros around midday and were last trading 9.8 percent higher at 40.74 euros. They are now up almost 67 percent this year.

Rheinmetall shares climbed by up to four percent in the morning and also reached another record high of 520.40 euros. In the afternoon, however, they slumped noticeably and finally only recorded a gain of 0.2 percent at 501.40 euros. In the year to date, however, the price gain still amounts to 76 percent.

The shares of the newcomer to the stock market, Renk, were also high in investors' favor at the start of the week. With a daily high of 29.80 euros, they missed their mid-February record by only 4 cents. Most recently, the shares of the tank supplier rose by 5.5 percent to 29.60 euros. Since the initial listing on February 7, the shares have gained almost 70 percent.

Armaments companies are benefiting from the turning point in European armaments policy following the Russian war of aggression against Ukraine in February 2022. Rheinmetall's shares have quintupled since then, while Hensoldt's have more than tripled. In view of the stronger military deterrence demanded by many European countries, investors are betting on further increases in defense spending. However, it should be clear that such highs can also be followed by consolidations or corrections.

Analyst Benjamin Heelan from Bank of America expects a strong order intake for European defense companies in the current year. This should further strengthen healthy order books and ensure highly predictable sales in the medium term.

The EU defense market is likely to be a structural growth market until 2030, as member states have reaffirmed their commitment to a faster increase in defense spending, according to Heelan. He expects companies in the sector to continue to generate attractive shareholder returns, but also notes a "strong appetite" for complementary mergers and acquisitions./edh/bek/he