Trading Desk
The Merz Moment: Tiamo for German Stocks
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Martin Raab
Investment-Stratege
After a bit of a run-up, it worked: Germany has a new government. Fresher, younger and full of zest for action. For investors, this sounds like TIAMO – “There Is A Merz Opportunity”.
Stock market players and couch capitalists with a flair for the German stock market have experienced a rollercoaster of emotions over the past few days. But now it’s official: Friedrich Merz will become German Chancellor. Of all people, he is the man that Angela Merkel has repeatedly dismissed coldly. But Merz will not be beaten! The 69-year-old from Sauerland, who probably recites balance sheets off the top of his head in his spare time and is the first chancellor to know the difference between swap-based and fully replicating ETFs from his time at BlackRock, promises a breath of fresh air for Europe’s largest economy.
His cabinet also reflects the much-cited turnaround. Significantly lower average age, many highly motivated employees. For the first time, direct recruitment from the private sector has also taken place. First and foremost, the new Digitalization Minister Dr Karsten Wildberger. As a member of the Board of Directors of the Ceconomy Group and Group CEO of Media-Saturn-Holding with around 1,000 brick-and-mortar stores across Europe, Wildberger brings valuable practical experience with him. Merz’s motto for the cabinet: “Can instead of just want”.
If anyone knows how the economy works and how to implement it, it is the new government in Germany. Rumor has it that Merz read the federal budget like a quarterly report when he took office and shouted to Finance Minister Klingbeil: “Ready for restructuring. We’ll start tomorrow”.
According to many experts, the investment backlog in the German SME sector will clear in the coming weeks. Boardrooms are once again daring to make capex decisions. Many industry executives abroad also see Germany’s stabilization as an important signal for investment. The DAX still offers great value potential, especially in the automotive sector, virtually at bargain levels. There are also some gems to be found in the M-DAX and S-DAX. The free cash flow and the global market share of the respective company should be used as purchase criteria.
If anyone can speed up a real solution to the transatlantic trade dispute with Donald Trump, it is Friedrich Merz. At the very least, DAX calls would then gain significantly in value. Some brokers on Wall Street and traders in London are already calling “The Merz Opportunity” the hottest bet of the year. Perhaps also the most serious. The perfect time for TIAMO.
