ST Engineering shares rise amid geopolitical tensions, turbulent stock market
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MAINBOARD-LISTED defence and engineering group Singapore Technologies Engineering (ST Engineering) S63 has gained about 3.4 per cent in its share price this week, with analysts pointing to geopolitical tensions, the stock's safe-haven nature and the group's earnings prospects as factors propelling the ascent.
DBS equity research analyst Jason Sum said geopolitical tensions in Europe have sparked safety concerns among many nations and this will likely translate into a notable increase in defence spending.
"For example, Germany has announced that it plans to raise defence spending considerably in response to Russia's aggression - the country will inject 100 billion euros (S$150 billion) into a special fund to modernise its army. The French president also recently pledged to increase France's defence spending. Additionally, smaller countries may look to ramp up defence spending as well. These developments do bode well for ST Engineering's defence business," Sum elaborated.
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