Shipbuilder ASB shares fell 11.5% on Wednesday, as Asian defence stocks followed global peers lower amid rising optimism over a potential ceasefire in the Ukraine–Russia war. With President Trump pushing hard to end this war, it’s hard not to feel the “Defence Trade” is in the rear view mirror, providing another example of sector optimism getting too far ahead of itself – don’t forget an end to the war should send the oil price lower, which is exactly what the Trump Administration wants to contain/pressure inflation.
- We don’t like the risk/reward towards ASB ~$6 as the once “Hot” defence sector cools.
MM is neutral towards ASB
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