German equities are in focus after conservatives declared victory in the federal elections, putting an end to what’s been politically instable few months for Berlin.
Jorg Asmussen, the chief executive of German Insurance Association, expects the new coalition government to work on a “revamp of the country’s economic business model.”
On CNBC’s “Squawk Box Europe”, Asmussen also emphasized the importance of lowering corporate taxes to make Germany attractive again for international investments.
Berlin’s benchmark stock market index, the DAX 40, is up nearly 1.0% on Monday.
Why is Asmussen bullish on German stocks?
On the CNBC interview, German Insurance Association’s top executive Jorg Asmussen also called on the need to become more digital.
Asmussen expects the new coalition government to also work on improving financing conditions for start-ups and facilitating access to venture capital by removing regulatory barriers.
The expert sees a “high likelihood” of such initiatives making Germany an attractive place to invest in 2025.
Asmussen’s view is in line with Beat Wittmann of Porta Advisors who also sees the return of conservatives to power in Germany as very good news for investors.
Those interested in gaining exposure to European equities are better off investing in Berlin than anywhere else, he argued in a recent interview with CNBC.
Wittman’s view on Germany’s stock market
Wittman sees a lot of value in German stocks as the country’s tax index is flying high, “the markets are discounting and looking one to two years.”
The cofounder and chairman of Porta Advisors recommends investing in Berlin over Portugal, Italy, France as those other parts of Europe have already had their moment in the sun.
Beat Wittman dubs the new coalition government a positive also because he expects it to commit to relaxing the debt brake, which could increase spending on infrastructure and social investments, stimulating economic growth and creating more opportunities for businesses.
Reforming the debt brake could also signal to investors that the government is committed to supporting economic growth and addressing structural issues.
This can boost investor confidence and drive more capital to the country’s stock market.
Vonovia stock may be worth owning after elections 2025
One of the sectors that could directly benefit if Germany’s new coalition government does indeed move to lower taxes and commits to deregulation is real estate.
So, investing in the domestic real estate firms, like Bochum headquartered Vonovia, could be a smart move for 2025.
In November, the multinational reported flattish revenue for its third financial quarter but guided for upside in adjusted EBITDA moving forward.
Vonovia stock currently pay a rather lucrative 3.07% dividend yield that makes it all the more attractive to own at writing.
Plus, shares of the construction company are attractive in terms of valuation as well, having lost more than 10% since early October.
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