PYMNTS-MonitorEdge-May-2024

FinTech IPO Index Adds 0.5% as Chinese Stimulus Package Impacts Share Prices

FinTech IPO Index

Earnings season won’t be for another few weeks.

But earnings reports had some impact on the FinTech IPO Index, and gains were reserved chiefly for firms domiciled outside the U.S. as macro news from China helped goose the FinTech IPO Index slightly higher, by 0.5%.

China’s Lufax Holding, which enables financial services products for small businesses, saw its shares soar 24.3%, marking the most eye-popping gain through past week, but that rally’s impact was blunted by declines seen in several other platforms housed within our index.

Though there was no company-specific news tied to the headlines surrounding Lufax, China’s central bank cut interest rates and lowered banks’ reserve requirements — measures that some observers might hope lead to boosting consumer spending and loan demand.

Elsewhere, China’s Huize Holding shares gained 3.2%.

In its latest earnings report, the InsurTech firm said that during the second quarter, gross written premiums “moderated slightly” to RMB 1,336.9 million ($190 million). Renewal premiums increased by 42.8% year over year to RMB 685.4 million ($98 million) in the second quarter of 2024. The cumulative number of insurance clients served stood at 9.8 million in the latest quarter.

nCino shares were flat. As the company reported on Tuesday (Sept. 24), it launched BankNewport on the nCino Platform. The Rhode Island-based community bank has implemented multiple nCino solutions, including Commercial Lending, Marine Lending, Business and Consumer Deposit Account Opening (DAO), and Portfolio Analytics, bringing together multiple lines of business onto a single platform.

Nuvei shares were also flat. On Tuesday, Nuvei unveiled several new features and enhancements for its Nuvei for Platforms product. Among the new/enhanced offerings are decoupled pay-ins and payouts to provide greater flexibility to manage cash flow, optimize currency conversions and tailor payment strategies to specific market needs. There’s also a split payments feature, which the company said streamlines operations by automatically splitting processed transactions into the platform’s commission and the seller’s fee, ensuring PSD2 compliance.

Among the Decliners

As for the platforms that declined:

Oportun shares lost 4.4%. The company said in a Wednesday (Sept. 25) news release that it will sell its credit card portfolio to Continental Finance. Oportun said that the move will enhance profitability, trimming the company’s focus to unsecured personal loans, secured personal loans and its Set & Save savings product.

BILL saw its stock slide 3.3%. As PYMNTS reported on Wednesday, BILL has introduced new payment offerings for small businesses and accountants. The new capabilities, announced by the financial platform include Local Transfer — an international payment option for small- to medium-sized businesses (SMBs) — along with upgrades to BILL’s instant payment and invoice financing payment offerings.

With Local Transfer, businesses can make faster same-day international payments to vendors in their local currency without having to work with intermediary banks and take on the associated fees, the company said. Transactions are delivered directly to local banks abroad, letting businesses pay overseas vendors “like a local” from anyplace in the world.

SoFi’s Galileo introduced a credit offering aimed at underbanked/underserved consumers. Secured Credit with Dynamic Funding is designed to simplify the secured credit process, making it easier for consumers to manage debit and credit accounts, while also reducing lenders’ risk by backing credit with secured deposits.

The solution removes the need for consumers to manually transfer funds between collateral and DDA accounts when they make larger purchases. Instead, they can manage a single “available to spend” balance, per the announcement.

SoFi’s stock sank 5.3%.

PYMNTS-MonitorEdge-May-2024