Publications
Partners
Johannesburg - Microlender Blue Financial Services [JSE:BFS] is singing a new tune as its share price has rocketed in the last few days for no apparent reason.
After opening the week at 18c, shares in the company rose to as high as 40c in Wednesday trade before falling back to around 35c. More than 7 million shares have changed hands in the last two-and-a-half trading days.
A phone call to CEO Johan Meiring left Fin24 none the wiser.
Meiring wasn't taking any of the credit for some kind of turnaround, and said he wasn't aware of any specific event which would have triggered the run in the share price.
He did, however, point out that BFS was now trading at the level it was at prior to private equity firm Mayibuye announcing it was launching a rescue bid for the company. He said this was hopefully a sign that market faith in the stock had been restored.
Analysts were also scratching their heads, attributing this rise to a perceived improvement in operating conditions at the microlender.
However, as one cautioned: "It is one thing to not be losing money, it is another thing altogether to be making money," and this is perhaps the crux of whether BFS is back in business.
BFS reported a R1bn loss in the previous financial year and its short-term survival depended on the Mayibuye bailout. Microlending depends heavily on access to affordable funding and credit demand, neither of which is readily available.
Meiring and Mayibuye have so far stabilised the business; the question now is where do they take it from here.
In Thursday mid-afternoon trade, BFS was 31c/share.
- Fin24
