Dhume reports that Pakistan's military leadership has been quietly opening channels with Israeli counterparts for nearly a year, and that the recent announcement of expanded intelligence-sharing is the public surfacing of a longer process. He argues this is partially a hedge against Iran and partially a bid to remain relevant to U.S. policymakers in Washington.
Sector implications
If the realignment holds, Defense exporters and intelligence-platform providers (LMT, RTX, NOC) win additional foreign military sales channels. We are already overweight; this thesis reinforces.
Bottom line: the geopolitical surprise of the year so far. Worth a follow-up call with clients who own large Defense allocations.
What This Means For Your Book
Reinforces our overweight in Defense primes (LMT, RTX, NOC). FMS pipeline expands if realignment holds.
South Asian alignments are slow until they aren't. Defense pipeline exposure should be sized for the long curve.
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