Interest Sensitive Stock

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Interest Sensitive Stock

A stock whose value is likely to increase or decrease substantially due to changes in interest rates. Most interest sensitive stocks represent publicly-traded companies with high rates of long-term debt. These companies' stocks decrease in value when interest rates rise because the higher cost of borrowing may result in lower profits and dividends. Conversely, their stocks rise on lower interest rates. For this reason, utility companies tend to have interest sensitive stocks.
References in periodicals archive ?
Whether or not interest rates will continue to rise remains uncertain--for clients who are concerned about interest rate risk, however, interest-rate sensitive product features provide one more option for customizing an annuity product to the individual client's needs, while also providing for future retirement income.
On the stock market, Neri said the decision could weigh on local equities and provide more room for correction as property shares and other interest-rate sensitive sectors could see a pullback.
Commercial real estate finance is interest-rate sensitive and longer-term oriented," the Commercial Real Estate Finance Council wrote in a media statement.
43 points, with interest-rate sensitive stocks in banking, auto and property hardest hit.
Giving this information in written reply to a question in the Lok Sabha, Shri Praful Patel, Minister of Heavy Industries & Public Enterprises, said that the decline in manufacturing growth has been on account of moderation in demand, both domestic and external, hardening of interest rates, slowdown in consumption expenditure, especially in interest-rate sensitive commodities, subdued business confidence and global economic uncertainty.
The extent to which a particular bank needs to curtail its lending to achieve a leverage tar get in the aftermath of an interest rate increase depends on the difference between the value of its short-term assets, which generate interest-rate sensitive income streams, and the value of its liabilities, which are similarly interest-rate dependent.
While interest rates are a key area of concern for life insurers at this time, a new report said interest-rate sensitive life insurance premiums constituted only 4.
Despite signs interest-rate sensitive parts of the economy are starting to respond to the interest rate cuts since late 2011, the RBA remains uncertain about the future resources investment and the ability for non-mining activity to strengthen sufficiently, to offset the effects of waning mining investment.
Interest-rate sensitive property, automobile and bank shares were hardest hit.
Interest-rate sensitive sectors, such as utilities, dipped as the jobs data erased expectations the Federal Reserve would ease monetary policy.
With three interest rate rises in the last six months and the threat of another, it looks like we have reached the point where the market is interest-rate sensitive.
With three interest rate rises in the last six months and the looming threat of another, it looks like we have finally reached the point where the market is highly interest-rate sensitive.