Deutsche Bank, Meta Materials, Aixtron - A time for optimists

Deutsche Bank - Inflation winner

Central banks worldwide are struggling to keep up with runaway inflation rates. In Germany alone, inflation was at 10% in September, with skyrocketing energy prices meaning that the end of the line is not yet in sight, as an easing of the Ukraine conflict is still likely to be a long way off. In contrast to its big brother, the Federal Reserve, which has raised the key interest rate by 3% since February, the European Central Bank was still hesitant in its reaction, with only one increase to 1.25%. According to the Bloomberg news agency, experts such as Bundesbank President Joachim Nagel are calling for another "robust" rate hike to ensure that household and business price expectations remain anchored. "Permanently higher inflation is the biggest drag on growth and damper on prosperity," the Bundesbank president said at a joint press briefing with German Finance Minister Christian Lindner (FDP) in Washington.

While capital-intensive growth companies suffer from a stricter monetary policy, European banks such as Deutsche Bank, Commerzbank, or the Dutch ING Group benefit. In anticipation of further increases in key interest rates of 75 basis points, the Deutsche Bank share has already gained almost 22% to EUR 8.88 since the sell-off at the beginning of October. With the overcoming of the broad resistance at EUR 9.30, there would also be further short-term potential to the 200-day line, which is currently at EUR 9.93.

Meta Materials - Directional order

The shareholders of Meta Materials had little joy in the past months. The share price has lost around 95% of its value since its peak in July of last year. It is now quoted at USD 0.95, while the market capitalization has melted away from over USD 3 billion to a mere USD 341.99 million. However, since the beginning of the month, the share has mutated into one of the market's outperformers, with a price increase of 43%. This is attributable to an announcement with far-reaching implications for the future.

The developer of high-performance smart materials and nanocomposites received USD 4.3 million in orders for its nano-optics security business, which provides anti-counterfeiting features for currency and government documents and brand authentication. According to the Company announcement, Meta Materials has signed a contract with a confidential G10 central bank customer for a maximum value of USD 41.5 million over a period of up to five years. The new order is a base order for further work under the multi-year agreement.

"META is committed to being a global leader in banknote security technology. Our nano-optical technology addresses a growing, multi-billion dollar problem by delivering next-generation solutions that can be used to protect banknotes and government documents, as well as authenticate tokens," said George Palikaras, President and CEO.

In addition to nano-optical technology, Meta Materials' products can be divided into three areas: holography, lithography and wireless sensing with strong IT networking and artificial intelligence embedding. The developer of high-performance functional materials and nanocomposites produces specialized coatings capable of redirecting light, sound, heat or radio waves using specialized nanotechnology. It enables leading global brands to deliver consumer electronics, 5G communications, health and wellness, aerospace, automotive and clean energy products to their customers. Meta Materials is well positioned due to its extensive portfolio of 247 patents in 65 patent families, giving it a technology edge over comparable companies. A sustained jump above the USD 1 mark could result in a short-term upside potential of around 30%.

Aixtron - Strong momentum

While shares from the semiconductor industry had to fight horrendous price losses in recent months, the Company based in Herzogenrath, North Rhine-Westphalia, defied the market correction. Since the beginning of the stock market year 2022, a gain of over 54% to EUR 27.08 is on the books. In addition, the share price is on the verge of a significant buy signal with the breaking of resistance at EUR 28.18, which would result in a next target of the annual high of 2011 at EUR 34.08.

The strong share price performance of the world's leading supplier of deposition equipment for the semiconductor industry was fueled by an order for an AIX 2800G4 MOCVD system from Furukawa Fitel Optical Device Co, a Japan-based manufacturer of compound semiconductors. The system will be used to develop and produce optoelectronic devices based on gallium arsenide and indium phosphide.

"We are very pleased that Furukawa will become one of our G4 users. The platform is a reliable and established industry standard for the most demanding epitaxy requirements and has contributed to the success of many customers. With our team of hardware and process experts in Japan, we are looking forward to this new collaboration and supporting Furukawa to leverage the platform for their existing and future products quickly," said Dr Felix Grawert, CEO of Aixtron SE.

Last week, both the Sentiment Index and the broad market marked new interim lows. Since then, the mood has brightened. Optimists are returning to the market and positioning themselves for a countermovement. At Meta Materials, there are attractive entry opportunities after the sell-off. Aixtron is again on the verge of a buy signal. In contrast, Deutsche Bank should benefit from further interest rate steps by the ECB.