Source: Äripäev
Date: 3. October 2024
Interest Rate Cuts Make Small-Cap Stocks More Appealing
Rudolf Stenar Saluoks pointed out that the impact of interest rate cuts on companies can be anticipated by observing how specific stocks reacted to interest rate hikes. “Primarily, growth companies, companies with high debt levels, and those whose product demand heavily depends on interest rate levels were affected. For instance, solar panels, which do not provide immediate benefits to the customer but pay off over a long period, are highly sensitive to interest rates,” Saluoks said. “Most companies in the renewable energy sector are also growth-oriented. Investors expect cash flows in the more distant future, making these companies more attractive in an environment with lower interest rates. High interest rates have brought a few challenging years for the renewable energy sector as a whole. I believe there is now hope for the opposite trend,” Saluoks added.
https://www.aripaev.ee/borsiuudised/2024/10/03/intressilangus-pani-investorid-vaikeettevotetele-tormi-jooksma