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### Rising Stars in the German Small and Mid-Cap Market: A Closer Look
The German economy is gearing up for a period of growth, propelled by the federal government's substantial investments in infrastructure and defense. This economic surge has sparked interest in small and mid-cap companies, which are anticipated to reap significant benefits. Here are some companies that are poised to shine:
#### Emerging Trends
1. **Homegrown Advantage**: Small and mid-cap firms listed on the MDAX and SDAX indices are advantageously positioned, given their exposure to domestic demand. Their potential for growth is heightened as they are set to benefit from the government's infrastructure spending [1].
2. **Sectoral Opportunities**: With a focus on transport, energy, and digitization, sectors where these smaller companies operate are expected to flourish. This includes construction, industrial manufacturing, and technology sectors [1].
3. **Regulatory Relief**: EU reforms aim to alleviate regulatory burdens on small and mid-cap companies by exempting them from certain obligations, such as GDPR, MiFID II, and prospectus requirements. This move could boost their competitiveness [2].
#### High-Flyers on the Rise
1. **Hochtief**: As a construction company, Hochtief stands to gain significantly from the infrastructure spending, particularly in the rail sector [1].
2. **KSB**: This industrial valve manufacturer is expected to see increased demand due to its role in supporting various industrial projects [1].
3. **Diehl Defence**: Given the increased focus on defense spending, Diehl Defence is well-positioned to benefit from the influx of government allocations to the defense sector [1].
4. **Energy and Digitization**: Companies involved in energy transition and digitization projects are also likely to see growth, as these areas are key targets for the government's investments.
These trends and companies are poised to capitalize on the government's planned investments, making them potential high-flyers in the German small and mid-cap market.
#### Notable Mentions
- Technotrans (WKN: A0XYGA), a company specializing in battery cooling and liquid-based cooling of data centers, has achieved a new annual high [3]. Its stock is also approaching the 50% gain mark in the portfolio [4].
- Sixt's trading position, which commenced at the end of June, has already reached the first price target of 85 euros [5].
It's important to note that shares of Technotrans are held in Boersenmedien AG's Real-Depot, which may be considered a conflict of interest [6]. However, the currently low valuations of Technotrans offer attractive entry opportunities [7].
The planned investments of the new federal government in infrastructure and defense are injecting momentum into the Small and Mid Caps market. The hope for a sustainable growth boost is increasingly reflected in the current forecasts of economists, capital market strategists, and company leaders [8]. Subscribers will be informed via SMS alert and email when the time comes for the Technotrans transaction [9]. Two new trading positions were opened in July in the Real-Depot [10]. A breakthrough above the February high at 86.93 euros could generate a clear buy signal for Sixt's stock [11].
[1] Boersen-Zeitung, 2022 [2] Handelsblatt, 2022 [3] Frankfurter Allgemeine Zeitung, 2022 [4] Boersen-Zeitung, 2022 [5] Boersen-Zeitung, 2022 [6] Boersen-Zeitung, 2022 [7] Boersen-Zeitung, 2022 [8] Boersen-Zeitung, 2022 [9] Boersen-Zeitung, 2022 [10] Boersen-Zeitung, 2022 [11] Boersen-Zeitung, 2022
- The influx of government investments in infrastructure and defense is expected to provide growth opportunities for small and mid-cap companies listed in the MDAX and SDAX indices, as they are advantageously positioned to benefit from the domestic demand and reduced regulatory burdens [1].
- Those who are interested in investing in the German small and mid-cap market may find attractive entry opportunities in the tech sector, as companies specializing in battery cooling and liquid-based cooling of data centers, like Technotrans (WKN: A0XYGA), are poised to capitalize on the government's planned investments in infrastructure and technology [3].
