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APT, AFTERPAY HOLDINGS LIMITED
nipper
post Posted: Dec 6 2018, 08:00 AM
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QUOTE
When first-home buyer Georgina Emanuel applied for a loan this year her mortgage broker had bad news for her. Even though she had a 30 per cent deposit, she was spending too much on Uber Eats and Uber Ride and that could sway banks' decision to lend."They were looking for a pattern of spend. They are looking at every line of your life," Ms Emanuel, 29, said.

Macquarie ended up turning down her application to borrow for a home in inner Sydney's Darlinghurst due to "serviceability issues". She was later approved by Bankwest.

With a credit squeeze on across Australia following greater regulatory scrutiny on banks' capital allocation and the pending outcome of a royal commission, mortgage brokers now say the time taken to approve a home loan has more than doubled and no application is spared a forensic look at discretionary spending.

In Perth, air stewardess Lauren Lane, 26, had her modest $300,000 application turned down because of Afterpay - the online "layby" shopping system with the catchphrase "shop now, enjoy now, pay later".

Westpac, through Lane's broker, knocked back her application after discovering she had an outstanding Afterpay balance. "Our customers have different lifestyles and habits so we inquire about income and expenses on a case-by-case basis as part of our responsible lending obligations," A Westpac spokesman said. "Afterpay expenses represent a liability which would need to be understood as part of our broader inquires regarding income and ongoing expenses."

Verifying accounts such as Afterpay is particularly difficult for banks as it doesn't issue statements...
https://www.afr.com/real-estate/uber-eats-a...20181128-h18ghz

Further down the article, and we're looking at applicants' behaviours, comes the classic:
QUOTE
Generational changes now see Uber Eats as a staple, not a discretionary expense. "The real question is what's discretionary? That needs to be qualified," he said.
- oh to live in a world without consequences (dream on).



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
blacksheep
post Posted: Nov 28 2018, 02:23 PM
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In Reply To: blacksheep's post @ Nov 28 2018, 10:20 AM

"The sometimes eccentric views of John Hempton - this time on APT
QUOTE
The Australian Securities regulator (ASIC) has come out with a long review of buy-now-pay later arrangements in which it has decided to do nothing monitor the companies going forward.

This is perceived by some as very bullish for Afterpay. The stock is up fairly hard as I write this

Afterpay (ASX:APT) is the big player in this industry and a cult stock and cult product amongst Australian millennials. There are several other players and ASIC's study covered six of them.

ASIC does not have a reputation as an aggressive regulator so that they are monitoring the company going forward is the expected result.

But the ASIC report (available here) does give some insight into Afterpay.

Here are a few extracts:
.


read more - https://brontecapital.blogspot.com/2018/11/...w.html?spref=tw

I'm guessing that John Hempton is probably short APT, along with many others who expected a different ASIC outcome. Total short positions as at 22 November = 7.11% . APT SP was up earlier but currently down 0.15% @ $12.95
https://www.shortman.com.au/stock?q=apt



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The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Nov 28 2018, 10:20 AM
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In Reply To: blacksheep's post @ Nov 16 2018, 02:11 PM

QUOTE
Australian customers, collectively, owe $903 million in "buy now, pay later" debts, following a surge in popularity of Afterpay, Zip Pay and its various competitors.

That was the Australian Securities and Investments Commission's (ASIC) key finding in its first review of the rapidly growing sector.

The corporate watchdog also found:

There was a 400-per-cent jump in the number of customers who have used buy now, pay later schemes — from 400,000 to 2 million (between the 2015/16 and 2017/18 financial years)
The number of transactions lifted from 50,000 (in April 2016) to 1.9 million (in June 2018)
One in six users found themselves in financial trouble as a result — from becoming overdrawn, delaying bill payments, and needing to borrow more money to pay off that debt
The typical user is "young", with 60 per cent of them aged 18-34.
Buy now, pay later schemes are seen by many as "modern day lay-by".

The key difference is that customers can take their goods home immediately, without first needing to pay off every instalment.

Some providers, like Afterpay, offer fixed-term repayment terms of up to 56 days for amounts up to $2,000.

Other companies like Zip Pay offer short-term customer loans of up to $30,000.

ASIC also reviewed the operations of Certegy Ezi-Pay, Oxipay, BrightePay and Openpay for the purpose of its report.

Tougher laws ahead
ASIC is investigating businesses in this sector because, unlike banks, they are not currently required to lend responsibly or perform credit checks under the National Credit Act.

However, the regulator considers these arrangements to be "credit facilities" — an assertion which Afterpay denied — therefore giving it the power to act if a buy now, pay later company engages in misleading or unconscionable conduct.

It is also concerned that use of these services tends to result in customers buying more expensive items than they would otherwise, and spending beyond their means.

"Although our review found many consumers enjoy using buy now, pay later arrangements and plan to continue using them, there are some potential risks for consumers in using these products," ASIC commissioner Danielle Press said.

Afterpay revealed, in its latest annual report, its income from late fees surged 365 per cent to $28.4 million.

Some cosmetic surgery clinics have also been encouraging young women to sign up to "pout now, pay later" schemes through Zip Pay and other similar providers.

Last month, the Federal Government released draft laws which would introduce "product-intervention powers" for ASIC.

It is essentially a new power for ASIC to intervene proactively if it believes there is a risk of "significant consumer detriment".

These new powers have not yet been enacted into law, and are expected to put further pressure on buy now, pay later companies.


https://www.abc.net.au/news/2018-11-28/asic...chemes/10561232

APT's response to the ASIC report released today into the industry
https://www.asx.com.au/asxpdf/20181128/pdf/...q8r0ncnzkcc.pdf
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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Nov 16 2018, 02:11 PM
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In Reply To: blacksheep's post @ Nov 12 2018, 07:58 PM

SP up 11.63% @ $13.05

QUOTE
The corporate regulator has declined to say whether 'buy now, pay later' companies like AfterPay should face increased regulation, despite strong concerns from consumer groups ahead of the report into the sector early next month.

But the Australian Securities and Investments Commission (ASIC) submission to a Senate inquiry into parts of the finance sector that have escaped the scrutiny of the Hayne royal commission, including pay day lenders, contained hinted that it shares some of the concerns expressed by critics of Afterpay and the buy now, pay later sector.
"ASIC currently has limited jurisdiction to address potential risks to consumers when they use buy now, pay later arrangements," it said in its submission released on Thursday evening.

ASIC said that, because companies like Afterpay are not regulated by the National Credit Act (NCA), they are not required to consider income and existing debts of potential customers when they provide a loan.


read more - https://www.theage.com.au/business/companie...115-p50gbi.html



--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Nov 12 2018, 07:58 PM
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In Reply To: blacksheep's post @ Oct 18 2018, 07:16 PM

SP down 7.34% @ $12.50

Labor inquiry into buy-now, pay-later threatens Afterpay
QUOTE
Dubbed the 'Off Broadway Royal Commission' by consumer groups, a senate inquiry into financial products that escaped the Hayne inquiry is set to kick off, after submissions closed on Friday.

Debt management firms, known as vulture firms, payday lenders and buy-now-pay later entities are a few that didn't make the royal commission's cut. These financial products have escaped the royal commission's glare and have fallen through the regulatory cracks.


https://www.afr.com/business/banking-and-fi...20181111-h17rg9




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Oct 18 2018, 07:16 PM
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In Reply To: blacksheep's post @ Oct 18 2018, 10:54 AM

More SP volatility tomorrow - on the down side?

Calls to treat Afterpay as lender as the buy-now-pay-later merchant backflips

QUOTE
Afterpay should be treated as a lender and should be subject to responsible lending laws, a peak consumer advocacy group has said, as the Senate prepares to look into the buy-now-pay-later sector.

The call for tighter rules governing the nascent, but lucrative sector comes as it emerged Afterpay backflipped over a key regulatory issue.


QUOTE
Consumer Action Legal Centre senior policy officer Katherine Temple said on Thursday that allowing Afterpay to operate outside that regime creates the risk of shoppers spending more than they can afford.

https://www.afr.com/business/banking-and-fi...20181018-h16sdm




--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 


blacksheep
post Posted: Oct 18 2018, 10:54 AM
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In Reply To: blacksheep's post @ Oct 17 2018, 06:31 PM

More volatility - on the up side today. SP up currently 12.95% @ $12.82. Investors appear to be calmed by APT's ann this morning -

QUOTE
Press Commentary in Relation to Regulation
• Afterpay welcomes the opportunity to participate in any industry review and is supportive of appropriate regulation
• Afterpay’s customer centric service is highly differentiated from other operators
• Afterpay supports appropriate regulatory oversight from ASIC
• New Zealand Government recognised Afterpay’s model is different to traditional credit and recently decided not to include products like Afterpay under local credit regulations
• Our transparent and trust-based approach is reflected by our strong growth (over 2.3m customers and 17,000 merchants) and high levels of customer engagement and
satisfaction


Shortman records a notable short sales alert yesterday
QUOTE
Wed 17th Oct, 2018 1,989,318 229,970,922 0.86% 7,278,782 27.33%

https://www.shortman.com.au/stock?q=apt
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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
blacksheep
post Posted: Oct 17 2018, 06:31 PM
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Posts: 5,076
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In Reply To: blacksheep's post @ Oct 14 2018, 10:49 AM

QUOTE
Might be some more price volatility in the lead up to this report being released in December, although the article mentions the analysts that cover APT remain largely bullish, maintaining a "BUY" rating.


And volatility there was today

Afterpay shares plunge on 'buy now, pay later' crackdown fears ahead of Senate inquiry
By business reporter Stephanie Chalmers
Posted 31 minutes ago

QUOTE
Afterpay shares have plunged following news a Senate inquiry will examine "debt vultures", payday lenders, lease-to-buy schemes and 'buy now, pay later' providers not covered by the banking royal commission.

The steep share price slide began shortly after 3:00pm AEDT as the Senate agreed to the motion by Labor's Jenny McAllister to refer the inquiry to the economics committee

read more - https://www.abc.net.au/news/2018-10-17/afte...-fears/10387982
https://www.shortman.com.au/stock?q=apt
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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
nipper
post Posted: Oct 14 2018, 01:22 PM
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Posts: 5,039
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In Reply To: blacksheep's post @ Oct 14 2018, 10:49 AM

QUOTE
"vulnerable consumers" had to be made aware of the impact any defaults would have on their credit reference.
lawyer alert? ..... (what did they expect)



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
blacksheep
post Posted: Oct 14 2018, 10:49 AM
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Posts: 5,076
Thanks: 2039


Might be some more price volatility in the lead up to this report being released in December, although the article mentions the analysts that cover APT remain largely bullish, maintaining a "BUY" rating.
Afterpay, Zip await ASIC critique of buy now pay later

QUOTE
His analysis suggests there are longer term risks around Afterpay not conducting a thorough identity check and charging large late fees, also noting that "vulnerable consumers" had to be made aware of the impact any defaults would have on their credit reference.

"Bad debts are increasing at a higher rate than sales and this is a very concerning trend," Mr Halverson said. "American Express [Australia] with sales of $58 billion have bad debts at half the rate of Afterpay/Zip which highlights the immature and cavalier approach to credit risk."

read more - https://www.afr.com/business/banking-and-fi...20181011-h16irg

Short positions @ 8th October, 2018 = 4.32%
https://www.shortman.com.au/stock?q=apt

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--------------------
The herd instinct among forecasters makes sheep look like independent thinkers. Edgar Fiedler

If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter. George Washington
 
 


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