Yoma’s fintech foray will be positive, but not for awhile: OCBC

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Yoma’s investment in fintech player Wave Money should be positive in the mid-to-long term, but growth is at an early stage, OCBC said in a note on Wednesday.

Yoma acquired a 34 percent stake in Wave Money, which offers money transfer, either through a mobile account or at Wave Money agents, for US$19.4 million, OCBC noted.

The deal should be beneficial over the longer term, OCBC said

It noted, citing data from Channel News Asia, that over 80 percent of Myanmar’s population is unbanked, with limited physical bank branches and ATMs.

“Mobile financial services could help to address this, given that total mobile penetration in Myanmar stands at 105 percent, with smartphones representing 80 percent of the mobile phones sold in the country, according to Telenor,” OCBC said.

Too many condos in Yangon?

“Secondly, Wave Money should prove to be complementary to Yoma’s existing businesses. Over time, the newly-acquired platform should allow Yoma Fleet to expand finance lease and hire purchase services as well as for the group to put out other lending offerings,” it said.

But while the deal was “broadly positive,” OCBC said it was staying conservative and wasn’t incorporating Wave Money into its assumptions, given its early stage of growth.

“In light of recent market volatility, as well as the continued oversupply of condominiums in Yangon, we prefer to adopt a conservative stance,” it said.

It cut its fair value estimate to S$0.51 from S$0.55.

The stock ended Wednesday up 1.19 percent at S$0.425.