Monday, January 21, 2019

Pawnshops and Payday Lenders Surge on US Government Shutdown

I am pretty good at event trading and have advised in the EPJ Daily Alert  regarding a potential trade when the shutdown ends but I missed the pawnshop and payday lender play.

Pawnshop chains and payday lenders, have experienced strong stock price spikes during the longest government shutdown in US history, reports the Financial Times.


Shares in World Acceptance, a South Carolina-based short-term lender, are up 22 per cent since the shutdown took effect about a month ago. EZ Corp, a pawnshop operator based in Austin, Texas, is 20 per cent higher over that period.

Chad Prashad, chief executive of World Acceptance, said his company was seeing demand in Texas and the south-east of the US where there were big airports employing government workers.

In response to the shutdown, World Acceptance is offering cash-strapped government employees deferrals on their loans without interest or fee penalties. New customers can get up to $1,250 in a 10-month loan with 0 per cent interest and no fees.

“Because we lend in our communities, face to face, we see the concerns first hand and have decided to help directly,” Prashad said, adding that the company ran similar programmes after natural disasters such as hurricanes and tornadoes.

-RW 

2 comments:

  1. I suppose it's too much to hope for that perhaps these government workers will remember the private sector's benevolence next time there is a regulatory crackdown on payday lending and pawn shops?

    ReplyDelete