A new infochart from Kryptoszene.de takes a closer look at the CDU/CSU’s manifesto for the 2021 federal election. Which companies stand to benefit from the proposed policies if the CDU/CSU win the election? As shown in the infographic, DAX stocks in particular could expect additional profits of over €2 billion per quarter.
“Unleashing” Package Could Drive up Value of DAX Companies
In the election programme, the so-called “Entfesselungspaket” (“unleashing package”) is of particular interest to almost all German companies: corporation tax is to be capped at a maximum of 25%, down from its current level of around 30%. If the CDU/CSU remain in power, then this tax relief could have very favourable effects for German companies and consequently on share prices. According to Kryptoszene’s estimates based on figures from the Süddeutsche Zeitung and EY, corporations could thus generate around €2.089 billion more in profits per quarter.
According to the CDU/CSU’s election manifesto, substantial investments are to be made in Deutsche Bahn as part of its climate policy. This will be used to drive forward the expansion of rail transport and the digitalization of DB. The concept behind this: the more attractive trains are, the more people will leave their cars at home. An IPO of DB AG could therefore become more probable again over the next few years.
State Energy and Housing Investments
Large German photovoltaic companies such as Solarworld, Conergy or Q-Cells may benefit from the intention to intensively promote the industry again, according to the CDU/CSU’s election manifesto. German wind power is also to be further expanded, with increased investment in research, batteries and battery production. Experience shows that the industry leaders E.On and RWE should also benefit from economic stimuli.
The CDU/CSU has set itself ambitious goals in the field of housing: 1.5 million new homes are to be built by 2025. The election programme does not say how and by whom these will be financed. One might, however, assume that this will involve the large German real estate companies Vonovia and Deutsche Wohnen, which are currently in merger negotiations, possibly leading to share price gains. If they are left out of the equation, then greater supply could cause prices to fall, which in turn could have a negative impact on stock market values.
Digitization Plans With Potential for Deutsche Telekom, Vodafone & Co.
According to the election manifesto, the CDU/CSU also has big plans when it comes to expanding 5G: Germany’s nationwide 5G network is to be completed by 2025. Cooperation with the major German providers Deutsche Telekom and Vodafone is already underway. If the CDU/CSU remain in power, the German companies involved in the 5G expansion should receive enough contracts in the next few years to be able to generate extensive profits, with positive consequences for 5G shares.
The CDU/CSU have been in government for many years. The “Entfesselungspaket” with its corporate tax cuts could be a particular election incentive for many entrepreneurs. If the party remains in power and delivers on these election promises, this could bring share value growth to many German companies and thus provide good returns for small investors.
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