Nervousness has re-entered the chat this month. Increasing conflict, supermarket inquiries and record gold prices paint an uneasy scene. Yet, the fear of higher — or at least the same for longer — interest rates is front of mind for investors.

The cost of money, which is determined by interest rates, can have severe consequences on companies. This is especially true for businesses dependent on debt. A second bout of rate rise-inducing inflation could be catastrophic for those already on the edge.

Second wave of inflation

Expectations of approaching rate cuts have arguably fuelled much of the market rally before the recent souring. At its peak, the ASX All Ord index was up more than 7% in under three months. But those gains have now been vaporised.

Earlier this month, the monthly consumer price index (CPI) out of the United States gave investors pause for thought. The country's March inflation figure rose to an annualised rate of 3.5%, increasing month-on-month from 3.2% — depicted below. That's not the direction you want when aiming for 2%.

The conflict between Israel and Iran could exacerbate the issue.

Australia's Treasurer, Jim Chalmers, said, "It's not hard to imagine an escalating conflict in the Middle East putting upward pressure on inflation, just when we've been making welcome and encouraging progress in that fight."

In 1973 and 1974, inflation rapidly resurged, instigating those crushingly high interest rates that some may recall. The situation emerged following an oil embargo on the US. A retaliatory action after $2.2 billion of aid was provided to Israel during the Yom Kippur War.

The uncanny resemblance to 1973 could be causing some apprehension among investors.

The chart above shows that crude oil prices have surged 15% since December last year.

What happens next is unknown. However, I'm wary of history rhyming — taking Warren Buffett's sage advice of "Never lose money". That's why I avoid companies carrying a load of debt on the balance sheet.

Which ASX All Ord shares could be in danger?

Two handy measures for gauging a company's financial strength are the debt-to-equity and interest coverage ratios. The first provides insight into the level of debt, while the second shows the extent of the debt's burden on profitability.

Three ASX All Ord shares that I think could be poorly positioned for higher interest rates are:

• Zip Co Ltd (ASX: ZIP)
• Finbar Group Ltd (ASX: FRI)
• Elanor Investors Group (ASX: ENN)

Zip carries a lot of debt to facilitate buy now and pay later purchases. Meanwhile, Finbar Group holds $282 million worth of debt to construct apartment buildings. Lastly, Elanor is heavily indebted to finance its real estate portfolio.

If rates were to rise again, consumer spending would deteriorate further. That's a bad situation for a BNPL company, leveraged cash-tight constructors, and REITs with a heavy skew towards retail property.

Instead, I'd hold ASX All Ord shares with conservative balance sheets.

The post 3 ASX All Ord shares at risk if inflation storms back appeared first on The Motley Fool Australia.

Four ASX shares that are not letting that hold them back are listed below. Here's why they are pushing higher:

Bega Cheese Ltd (ASX: BGA)

The Bega Cheese share price is up 3% to $3.74. This morning, analysts at Bell Potter retained their buy rating on the diversified food company's shares with an improved price target of $4.10. It said: "In our view the exposure of BGA to relatively stronger commodities (cream cheese and Mozzarella) against the backdrop of commodity driven weaker southern farmgate prices could see EBITDA approach previous BGA-LDD targets of $200-220m."

Elanor Investors Group (ASX: ENN)

The Elanor Investors share price is up 12% to $1.66. This follows news that the investment company is acquiring the real estate funds management business of Challenger Ltd (ASX: CGF). Elanor is paying $41.8 million in scrip for the business. This will see Challenger become Elanor's largest shareholder with an 18.2% stake.

Neometals Ltd (ASX: NMT)

The Neometals share price is up 6% to 60.5 cents. This morning, this battery materials company announced that it will be increasing its ownership in the Vanadium Recovery Project's incorporated joint venture company, Recycling Industries Scandinavia, to 72.5%. The joint venture is currently working towards a final investment decision to construct a facility in Pori, Finland that will process and recover high-purity vanadium pentoxide.

Talga Group Ltd (ASX: TLG)

The Talga share price is up 4% to $1.68. Investors have been buying this graphite developer's shares after it announced the receipt of an environmental permit for the Nunasvaara South natural graphite mine. It is part of the company's vertically integrated Vittangi Anode Project in northern Sweden.

The post Why Bega Cheese, Elanor Investors, Neometals, and Talga shares are pushing higher appeared first on The Motley Fool Australia.

Elanor Investors shares are up 16.89% and are currently trading at $1.73 apiece. In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 0.26% today.

Let's take a look at the details of this deal.

What are the details?

Elanor is a funds management business with billions of dollars of real estate assets in Australia and New Zealand.

Today, Elanor advised it plans to acquire 100% of Challenger Ltd's (ASX: CGF) $3.4 billion Australian real estate funds management business for an upfront consideration of $41.8 million.

After the transaction, Challenger would become Elanor's largest shareholder with an 18.2% stake. Elanor is planning to deliver 27.4 million shares to Challenger.

The takeover, if approved, will more than double Elanor's assets under management from $3 billion to $6.4 billion.

The deal is expected to deliver material earnings growth for Elanor in FY24. Elanor and Challenger have also entered into a strategic partnership.

Commenting on the news, Elanor chief executive Glenn Willis said:

We are pleased to have executed on a key strategic objective of the group to grow AUM through the acquisition of a significant real estate funds management platform. This is a transformational transaction for Elanor.

Combining Elanor's real estate funds management capability with Challenger's market leading capital raising platform delivers significant size and scale benefits, and positions us for further strong growth.

The acquisition is due to be complete by 30 June and is subject to both shareholder and regulatory approvals.

Elanor is planning to hold a shareholder meeting in mid-June.

Share price snapshot

The Elanor Investors share price has fallen nearly 20% in the last year.

Elanor has a market capitalisation of nearly $211 million based on the current share price.

The post Elanor Investors share price surges 17% on $3.4 billion Challenger funds deal appeared first on The Motley Fool Australia.