Home Growth Companies iFAST's Shares Are Up 20% So Far This Month. What's Going On?

iFAST’s Shares Are Up 20% So Far This Month. What’s Going On?

What happened?

Shares of iFAST Corporation Limited (SGX: AIY) are up around 20% since the start of October.

As at the time of writing, the shares are trading around S$2.90, up almost 21% from its S$2.39 close on 1 October.

As a brief background, iFAST runs a financial technology platform that allows customers to buy and sell securities such as unit trusts, shares and bonds.

The group reported a record level of S$11.15 billion in assets under administration (AUA) in its recent second-quarter 2020 earnings report.

So what?

Two months ago, the news emerged that Hong Kong has shortlisted finalists to digitise its retirement funds system.

Two parties were shortlisted, a consortium led by Oneconnect Financial Technology, backed by Ping An Insurance Group (SEHK: 2318), and another group led by billionaire Richard Li’s PCCW Ltd (SEHK: 0008).

PCCW was rumoured to be working with iFAST.

The winner stood to reap around HK$37 billion in revenue over 10 years, while the technology partner would supposedly enjoy a cut of this revenue.

iFAST has come out to state that it had no comment on this news, and that all such discussions are supposed to be private. The company did say that it would be, from time to time, bidding for tenders and projects.

Now what?

Singapore Exchange Limited (SGX: S68) has once again queried the company on the surge in its share price over the last two days.

In response, the group pointed to a recent announcement on the release of its third-quarter 2020 financial results.

It believes that this announcement may have been responsible for the latest surge.

Investors should note that the results for the bidding of the digital wholesale banking licence in Singapore are still not out.

And with iFAST denying the reports on the Hong Kong bid, it seems the shares are floating on a layer of optimism that cannot be suitably justified.

It might be better to wait for the release of the results in the morning of October 23 before deciding on any investment moves relating to the group.

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Disclaimer: Royston Yang owns shares in iFAST Corporation Limited and Singapore Exchange Limited.