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'Tainted' microlenders gain appeal

Aug 03 2010 15:23 Marc Ashton

Company Data

Blue Financial Services [JSE : BFS]

Last traded R0.44
Change R0.00
% Change 0.00%
Cumulative volume 410,190
Market cap R2.55bn

Last Updated: 13/02/2012 at 19:33. Prices are delayed by 15 minutes. Source: McGregor BFA

 

African Dawn Capital Ltd [JSE : ADW]

Last traded R0.17
Change R0.00
% Change 0.00%
Cumulative volume 60,000
Market cap R86.39m

Last Updated: 13/02/2012 at 19:33. Prices are delayed by 15 minutes. Source: McGregor BFA

 

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Johannesburg - Investors with an appetite for risk have blown some life into the share prices of troubled microlenders African Dawn Capital [JSE:ADW] (Afdawns) and Blue Financial Services [JSE:BFS].

The two counters, once the darlings of speculators and small cap analysts, have been plagued by operational issues and have been trading at a fraction of previous highs.

During the past 12 months, Afdawn has plummeted from 160c per share to 9c at the beginning of July, while Blue tumbled from 230c to 10c over the same period.

However, Afdawn's share price has since gained more than 80% to 18c while Blue was up 25% on Tuesday, trading at 15c/share after it announced on Monday that CEO Dave van Niekerk had stepped down.
 
Standard Bank small caps analyst Keith McLachlan has warned investors about getting too excited about either of the stocks. "There is far too much forecast risk - there are companies which are struggling to survive," he said.
 
He added that they had been "tainted" by past events and would struggle to get out of the "penny stock" category from a reputation perspective.
 
At the end of July, Afdawn released a cautionary announcement saying that "discussions are ongoing with potential liquidity providers", while Blue is awaiting confirmation that white knight Mayibuye would bail it out.
 
 - Fin24.com

 
 
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