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MEGA (“Make Europe Great Again”)

328 Friday, 28 March 2025 17:54

How to position yourself in the context of the European Economic Revival

In a scenario of reallocation of investment flows towards European stocks deemed undervalued following the overperformance of American stocks, some analysts are beginning to see a possible bullish “supercycle” in Europe.

In Germany, the establishment of a CDU/CSU-SPD coalition ensures a majority in the Bundestag, thereby reducing the risk of non-execution of the economic recovery plan which includes:

  • A EUR 500 bn investment plan spread over 12 years to modernize public infrastructure (transport, energy, digital).
  • A relaxation of budgetary rules for defence spending which would no longer be subject to the German debt brake beyond 1% of GDP (≈ EUR 44 bn) and would be financed by off-budget debt.

This massive investment, combined with a relaxation of budgetary constraints should lead to a favourable macroeconomic context, creating significant investment opportunities for companies that can benefit from this recovery plan.

At the same time, for several months now, the idea of a possible peace agreement in Ukraine has been gaining momentum. Such a scenario would have major repercussions on the European economy:

  • A drop in energy prices beneficial for businesses and households.
  • A resumption of trade opening new economic opportunities.
  • A reconstruction of Ukrainian infrastructure which will require colossal investments.

Certain sectors and companies are directly impacted by these developments. The analysts of Kepler Cheuvreux have identified companies well positioned to benefit from a reconstruction of Ukraine. These companies operate in key areas such as construction, industry, transport and finance.

In partnership with Kepler Cheuvreux Solutions, Renalco SA has issued a certificate selecting values exposed to this theme based on this analysis.

Do not hesitate to contact Renalco SA to find out more if you are interested by this opportunity (info@renalco.ch).

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