Hi Anklos, normally it would be as NXT is an asset intensive...

Hi Anklos, normally it would be as NXT is an asset intensive business that is typically financed. The reason i don't think it will affect NXT as much is their interest terms with NAB is actually coming down. i believe we used to pay 8% yield and it is near 6% now. It should come down further as NXT has strong recurring business and strong cashflow. A good barometer is to look at Equinix which has financing near 4%. Also NXT has often completed share purchase plans for capital projects so the net debt isn't going up too much.

in saying that sharp rises in interest rates are actually bad for all asset classes (except cash) from a valuation perspective, as valuations are typically pinned to the risk free rate ( 10 years US Treasury Bonds). This months share meltdown was due to the market believing higher inflation which was reflected in 10 year treasury yield going up.

My long term belief is the US Tax cuts and infrastructure investment worldwide will be good for the globally economy for 3-5 years but long term the tax cuts are bad given it is debt fueled. We are likley to see something worse than the GFC once the this growth cycle has finished.