March 30th, 2022 | 10:09 CEST
Turn of the times! Stock winners and losers: Rheinmetall, Ximen Mining, ThyssenKrupp
Table of contents:
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Rheinmetall: Armaments without alternative?
At the same time, the negotiations between the two warring parties have yielded little more than water-level reports. Ukraine wants to develop a solution from the beginning, i.e. within the Ukrainian borders before the outbreak of the war and shows itself willing to negotiate around the Donbas. It also says neutrality is possible. Russia seems to think these offers are not concrete enough and wants a more tangible basis for negotiations. And so the dying continues.
And the West? It is frantically organizing the turnaround in the areas of energy supply and the military. The other day, German Chancellor Olaf Scholz announced in a TV interview on Anne Will that other European states want to increase their military spending. The West's strategy is thus clear: deterrence is back. Because of Russia's unpredictability, it makes perfect sense not to rely on promises and announcements and, if the worst comes to the worst, to be reasonably self-sufficient - i.e. not completely dependent on the military strength of the USA. Weapons manufacturers such as Rheinmetall are likely to benefit from this course. The dividend for the past year should already be much more generous, with a distribution of EUR 3.30 per share planned for the annual general meeting on May 10.
Ximen Mining as a beneficiary of a gold price rally
When economic linkages renew and defense spending increases, it also indicates rising uncertainty. The sanctions against Russia, possible supporters, and the general threat of war should also boost the gold price. Currently, gold is trading slightly above USD 1,900, somewhat lower than immediately after the outbreak of the war. Market observers cite the strong US dollar as the reason. But in the past, rising interest rates in the US were often followed by gold price rallies. That happened in 1999 and 2015, so the current phase could be the calm before the storm. The Canadian company Ximen Mining is well-positioned to benefit from a gold price rally. The Company is in the advanced permitting process of its Kenville Gold Mine near Nelson in British Columbia. Authorities announced they intend to send Ximen Mining a draft permit in the coming weeks. The Company would then be able to respond to that and make comments.
"With the development permit within reach and USD 5,000,000 in development funding secured, along with additional financial support from a mid-tier gold producer, the Kenville Gold Mine is expected to be operational in 2022," said Christopher Anderson, CEO of Ximen Mining Corp. "The Kenville Gold Mine will have an extremely low environmental footprint while creating the opportunity for many high-paying, significant and meaningful jobs for the region and the community. Once we are in full production, the multiple economic benefits to the region will be a catalyst for job stability for years to come. We believe the Kenville mine will be one of the most environmentally friendly producing gold mines in southern BC," the CEO said in a company release. Sustainably produced commodities are gaining traction and could be a unique selling point for Ximen Mining. The stock has been up around 38% over the past three months but is just beginning to break the long-term downtrend. Those who like to trade according to charts should take a closer look at the value.
ThyssenKrupp: This is getting expensive!
ThyssenKrupp's stock is of little interest to investors at present, at best, convinced bottom-fishers might buy them. The steel group is suffering from high energy costs. The Company is currently planning to rebuild its plants to meet climate protection requirements. The IG Metall trade union calls the Company's situation "highly dangerous". The share price has also reached a multi-month low. In the long-term context, however, there could be a little more downward potential: Immediately after the outbreak of the pandemic, the share was around 50% lower than today.
Since February 24 of this year, the world has been a different place. It will probably be a while yet before a new order is established. There may well be collateral damage in the process - the consequences for energy-hungry industries are severe. The defense industry, too, suddenly has an entirely new significance - parts of the industry have recently even self-confidently demanded to be classified as sustainable. In any case, only tangible assets are truly sustainable in crises or phases of upheaval. Gold could soon be more in demand again. Companies like Ximen Mining are well-positioned in light of advanced approval processes.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.
For this reason, there is a concrete conflict of interest.
The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.
Apaton Finance GmbH offers editors, agencies and companies the opportunity to publish commentaries, interviews, summaries, news and the like on news.financial. These contents are exclusively for the information of the readers and do not represent any call to action or recommendations, neither explicitly nor implicitly they are to be understood as an assurance of possible price developments. The contents do not replace individual expert investment advice and do not constitute an offer to sell the discussed share(s) or other financial instruments, nor an invitation to buy or sell such.
The content is expressly not a financial analysis, but a journalistic or advertising text. Readers or users who make investment decisions or carry out transactions on the basis of the information provided here do so entirely at their own risk. No contractual relationship is established between Apaton Finance GmbH and its readers or the users of its offers, as our information only refers to the company and not to the investment decision of the reader or user.