Why left-wing parties are sometimes good for the stock market

Governments involving left-wing parties have a reputation for being bad for shareholders. But for some stocks are even a real booster.

There was a great outcry when, in 1998, Gerhard Schröder and the Greens replaced Helmut Kohl’s longstanding black-yellow government. The financial markets were concerned, with Oskar Lafontaine in particular causing headaches as finance minister. But the Saarlander was gone quickly, just greeted him again with his grandchildren on his shoulders from his home terrace in Saarbrücken.

25 years later, not even journalists from more left-wing media cry out when an armaments company appears in the Dax – and with the active help of red-green-yellow and their increased defense budget.

In the past, the Greens primarily pushed the prices of wind or solar energy stocks. But a soft spot for armaments has long since been discovered and the former beliefs of founding members such as Petra Kelly have been abandoned.

The inclusion of Rheinmetall in the Dax would probably have made many Greens uneasy a few years ago. And even a Christian Ströbele would certainly not have fallen into euphoria. Today, the Green Vice-President of the Bundestag, Kathrin Göring-Eckardt, tweeted: “Ukraine must win. Period” – and this should not only make Rheinmetall’s management happy, but also its shareholders.

This can be seen from the stock market value and a price gain of no less than 85 percent over the past twelve months. Because in order to win, Ukraine first of all needs weapons. The former peace party of the Greens leaves no doubt about that.

But the Greens have not only provided direct support for DAX companies in recent years, they have also triggered unwanted joy. It is an open secret among stockbrokers that the takeover of Deutsche Wohnen by Vonovia was not least driven by its housing stock in Berlin.

One could only object that the “Expropriate Deutsche Wohnen” initiative was primarily launched by green-left clients in Berlin. This is correct and at the same time boosts the value of the Deutsche Wohnen portfolio. Because nothing would be worse for him and for the development of rents from the landlord’s point of view than constructive housing.

This is exactly what Red-Red-Green has prevented for years in Berlin, which leaves the rental market looking catastrophic and has led to a seller’s market for landlords. In addition, one has taken their own electorate for quite stupid by repeatedly reporting on successful expropriations, which in reality were an expensive purchase of housing units.

So the Greens and the Reds not only made real estate groups happy, but also real estate owners in Berlin in general. No business administration student in the first semester would have made the following suggestion to swap apartments because there weren’t enough.

Tesla and SMA Solar shareholders have known for a long time that the Greens can be relied on. In the case of the latter share, the price explosion of the past few years was a small reminder of the red-green hype of the 2000s, when Solarworld or Conergy were first encouraged and then accompanied towards insolvency.

In the case of Tesla, however, it was shown that governments worldwide can catapult the course to absurd heights of more than one trillion US dollars with tax incentives. If every car is subsidized, the manufacturer is happy. Even if it is enough in this country to register cars for a short time, collect the premium and then preferably transfer the vehicles to other northern European countries.

The SPD, Greens and FDP are in no way inferior to the years of course maintenance by German manufacturers, for example with the help of lavish company car subsidies from the CDU and FDP.