Rates are rising in Europe. HSBC names the region's 'most and least vulnerable stocks'
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Analysts at British bank HSBC have named the "most and least vulnerable stocks" in the European market, which is currently weighed down by a spike in corporate lending rates. "Across the economy, most corporate borrowing is at floating rates, thus our economists expect the bulk of the interest rate headwinds to emerge over the next eighteen months or so," the analysts said in a Sept. 15 note. "Our analysis of publicly listed companies in Europe (FTSE All World) suggests that the weighted average cost of debt has already risen from about 0.42% in 2020 to over 3.7% currently. Leverage, as measured by net debt to EBITDA (earnings before interest, taxes, depreciation and amortization), is starting to rise again, albeit from low levels, while interest cover has fallen sharply since the beginning of this year," they wrote. CNBC Pro takes a look at the bank's two screens of "the most and least vulnerable" stocks: one for "cash-rich&