IOUpay Share Price Up on New Lending Licence (ASX:IOU)

At time of writing the IOUpay Ltd [ASX:IOU] share price is trading at 18.5 cents, up 5.71%.

IOU shares rose on the back of news the company secured a money lending licence in Malaysia.

ASX IOU Share Price Chart 1

Source: Optuma

IOUpay and the new licence

IOUpay provide digital commerce software and services to Southeast Asia.

This enables institutional customers to authenticate their end users to process banking and payment transactions.

Southeast Asia is moving to a more cashless society, the problem being that almost 200 million people currently have no banking facilities. While close to 300 million people are underbanked.

As more and more digital transactions take place in Southeast Asia, IOUpay is looking to capitalise on the growing market.

The company recently announced they have acquired a Malaysian lending licence via the acquisition of licence holder Sibu Kurnia Marine (SKM).

IOUpay acquired 100% of the ordinary shares in SKM for the purchase price of AU$1.375 million.

Mr Lee Chin Wee, Chairman of IOUpay, noted:

The completion of this critical milestone ahead of schedule enables the Company to now accelerate its plans to capitalise on the significant market opportunities in the BNPL and digital payments sectors.

The population of Malaysia is 32.7 million in 2020, so this new deal represents a huge growth opportunity for the company.

The future of the IOU share price

At time of writing the IOU share price is up over 4,530% from the low in May 2020, giving the company a market cap of $78.83 million.

ASX IOU Share Price Chart 2

Source: Optuma

The share price reached a high of 28 cents in October before falling back, retracing just over 50% on declining volume before moving up again.

This is usually a sign of strength.

Should the move up in price continue, then the levels of 19 and 22 cents may provide future resistance.

If the share price falls back, then the level of 12 cents may be enough to halt the fall.

The new licence is a move in the right direction for IOUpay, in saying that Malaysia is now facing the same issues as much of the rest of the globe — COVID-19.

As the virus is now threatening to overwhelm the healthcare system of the Asian nation, this may slow growth in Malaysia.

At this stage IOUpay may be one to put on a watchlist, but I wouldn’t be holding my breath for a huge payday.

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Carl Wittkopp,
For Money Morning

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

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