Berlin (4.5.2017) – While many banks recommend the purchase of Rheinmetall shares against the backdrop of increasing demand for defence products, the non-governmental organization Facing Finance calls on investors and shareholders to distance themselves from Rheinmetall shares and not to provide the company with more loans.
Reason: The SIPRI peace research institute now ranks Rheinmetall 30th in its list of the world’s largest weapon manufacturers. As in the previous year, 2016, military sales also increased, according to the company. Armaments worth EUR 2,946 million were implemented in 2016, representing a double-digit increase of 14% (2015: EUR 2,591 million).
Rheinmetall often pursues cooperation projects in states where autocratic governments guarantee export-friendly conditions and / or do not sufficiently respect human rights. Examples of such countries include Saudi Arabia, Algeria, South Africa (weapon systems and artillery) and Turkey (weapons and ammunition).
A recently public project, which has just come to fruition through a joint venture with partners in the autocratically ruled Turkey, and far away from German regulators, involves the development of ammunition and combat tanks. “The Turkish military is already using tanks against Kurdish minorities and the protesting civilian population. An approach that suggests what Rheinmetall’s weapons will be used for in the future, ” criticizes Thomas Küchenmeister, Managing Director of Facing Finance.
Since 2016, Rheinmetall Denel Munitions, together with the Saudi Arabian owned enterprise Military Industries Corporation, has been operating a new 240 million-dollar ammunition factory in Saudi Arabia. Among other things, artillery ammunition and bombs will be produced. In addition, Rheinmetall is currently negotiating with Indian arms companies about possible cooperation in munitions.
Banks and investors such as the Swiss UBS or NordLB are pleased with the dazzling armaments business and recommend Rheinmetall shares. The investor magazine “Der Aktionär” advocates Rheinmetall as great shares with a nice trend, and includes as a side note that only morally it is questionable.
Many German banks (including the Bavarian Landesbank, Norddeutsche Landesbank, Commerzbank, Deutsche Bank and Stadtsparkasse Düsseldorf) are among the Rheinmetall lenders. Also, a large number of funds are invested in Rheinmetall shares, for example the funds of DeKa Investment GmbH. The largest Rheinmetall shareholder and therefore the largest investor to profit from Rheinmetall is BlackRock Inc., which holds 4.93 percent, followed by Deka Investment GmbH with 3.44 percent. The Deutsche Bank subsidiary DWS is at number 4 with 1.3m shares or 3.03% of the voting rights.
It will be interesting to know whether and how Rheinmetall shareholders and lenders will express themselves at the AGM on 9th May, with regard to the intensification of cooperation with autocratic and anti-democratic regimes, and if they are indeed questioning their business relations with Rheinmetall.
Facing Finance recommends “SELL”