It is looking more likely the War in Ukraine will end in the coming months… What opportunities could come from a lasting peace.

Russia is facing severe economic pressures as result of their war against Ukraine. The war has lasted for over 4 years, Russia has taken a significant toll due to global sanctions, Ukrainian drone striking critical infrastructure, oil/fuel shortages, very high inflation, increases in taxation, a manpower shortage and recently turmoil in Crimea and blows on the battlefield.

These factors can be likely to create a peace deal in the future, Putin is becoming more unpopular and it’s becoming increasingly difficult for him to contain the situation. Putin is running out of options, without making concessions, how this war is reasonably going to end in a way that is favourable for Russia after peace. He is likely going to be forced out or forced to make concessions.

Currently, it does not seem that the end of this war is priced in, the market acts like the war will never end, but I think the end of the tunnel is a lot closer than we think, the dominos are starting to fall, and will exponentially get more significant.

Anyways here are some factors and potential opportunities and threats from the war ending.

But if a peace is made, the potential for many companies can be enormous.

1. Companies can reintroduce themselves to Russia (assuming sanctions are lifted), companies like PepsiCo, Adidas, McDonalds have ceased their operations in the country due to the war.

1. Reintroduction of Russian oil & gas lowering energy costs in Europe allowing better margins for the manufacturing industries… This will reverse the headwinds for many European companies like Volkswagen have faced tightening margins from increased energy costs. These reversing will be greatly beneficial to them.

1. Companies which can redevelop Ukraine. Companies such as Caterpillar can potentially be given the windfall of billions of dollars flowing into redevelopment. Banks will finance the reconstruction, European banks as well as asset managers like BlackRock will likely be ones to finance redevelopment, getting interest from loans.

1. It is likely that if the war in Ukraine ends, and Russia capitulates, there will be a likely reversal in European demand for defence contracts… This is already being seen to an extent by Rheinmetals contracts for frigates being cancelled just days ago. Geopolitically, Europes only real threat and the cause of demand for defence is Russia, if they are to keep spending on defence it will be cyber security preventing attacks from North Korea, China, Iran and potentially Russia as well.

1. Rare earths, I can’t think of any companies specifically, it’s likely too early to tell, but rare earths in Ukraine are important, obviously Trump was keen on getting hold of them last year during negotiations but this has been forgotten about. Rare earths are to be incredibly important, permanent magnets etc will become more important with EV adoption and expanding robotics.