Share markets have been jittery all year, mainly due to fears of interest rate rises.
An increase in borrowing costs undoubtedly is painful for businesses. Cash flow is diminished, and every dollar paid to suppliers costs more.
And of course, interest rate rises make other forms of investment, like bonds, more attractive. So ASX shares take a hit as capital flows out of stock markets.
But there is a sector that actually benefits from upward-moving rates: finance.
A boost in rates directly translates to an increase in earnings for companies like banks and insurance providers.
As such, here's a pair of ASX shares in the finance industry that experts are urging investors to buy before rates actually head north:
'Improving customer satisfaction and market share gains'
Out of the big four banks, Marcus Today portfolio manager Thomas Wegner favours National Australia Bank Ltd (ASX: NAB).
"First quarter 2022 results were ahead of expectations," he told The Bull.
"Cash earnings grew 9.1% on the prior corresponding period."
In a year where most ASX shares have lost ground, the NAB stock price has gained 4.6% so far. It's climbed a stunning 11.5% over the past fortnight.
Wegner is a true believer of NAB's turnaround narrative.
"Improving customer satisfaction and market share gains were solid achievements given the challenging operating environment. NAB had been losing market share in the past two years," he said.
"Management is also optimistic about the outlook and is targeting flat expenses in the 2022 financial year."
According to CMC Markets, 11 out of 16 analysts currently rate NAB as a "buy". The remaining 5 designate it as "hold".
Calculated from the current stock price, NAB is paying out a tidy 4.1% dividend yield to its shareholders.
Buy the dip for this Queensland player
Financial services giant Suncorp Group Ltd (ASX: SUN) is Red Leaf Securities chief John Athanasiou's pick.
After popping up 6% for the year-to-date earlier this month, Suncorp shares have cooled to be flat for 2022.
"The recent share price fall provides a buying opportunity," Athanasiou said.
He acknowledged that the company's performance in the first half of the 2022 financial year didn't meet market expectations.
"Group net profit after tax fell 20.8% to $388 million in the first half of fiscal year 2022," he said.
"The result was impacted by natural hazard events and operational impacts from COVID-19. This diversified financial services company is strong, and we expect performance to improve in the second half."
Eight out of 12 analysts currently rate Suncorp shares as a "buy", according to CMC Markets. The other 4 advise investors to "hold".
At the current stock price, Suncorp is giving out a dividend yield of 5.5%.
