Purple Group’s shares soar 4% on GCash partnership

Charles Savage , the CEO of Purple Group. Picture: Supplied

Charles Savage , the CEO of Purple Group. Picture: Supplied

Published Apr 19, 2023


Purple Group’s shares yesterday closed 3.88% higher at R1.34 on the JSE after it announced EasyEquities had partnered with GCash, the largest and fastest-growing mobile wallet in the Philippines, to bring managed portfolios of US shares to all Filipinos.

The markets welcomed the move, with some investors getting impatient for the financial services firm to realise its expansion plans despite inflation-hit global markets. This has seen its share price fall 56.86% in a year after a whopping 514.29% share grown in five years.

GCash has more than 70 million active clients.

The financial services group, on August 19, 2022, released a market announcement in relation to its partnership with an e-wallet provider in the Asia Pacific Region.

“The launch of this exciting partnership will be preceded by a Fantasy Investing Game expected to launch in June 2023. The game will run for a minimum of six weeks and will allow GCash clients to try their hand at investing in real markets with fantasy money,” said Purple.

It said the game was designed to educate and familiarise Filipinos with investing in the US stock market, while also providing a fun and engaging experience as all players have the chance of winning prizes for competing and providing feedback on the platform.

“This is the same successful strategy EasyEquities used to launch in South Africa,” it said.

In the Philippines, the Securities and Exchange Commission (SEC) is the primary regulatory body overseeing securities and investments. The SEC is responsible for enforcing the securities laws, protecting investors, and promoting the development of a fair, transparent and efficient securities market.

“In this regard, GCash and EasyEquities have been meeting with the SEC regularly to ensure compliance and approval to launch the real product as soon as possible,” Purple explained.

The SEC played a pivotal role in bringing these parties together to launch the fantasy investment game as a way to educate, engage and build confidence in the platform and investing for first-time investors, it said.

“The partnership of two market-defining fintech companies can help revolutionise the investment landscape in the Philippines by making it a more accessible, friendly and affordable activity for everyone,” said Martha Sazon, the president and CEO of Globe Fintech Innovations, and owner of Gcash.

In November, Business Report, reported that Purple Group’s headline earnings a share fell by 74.3% to 1.14 cents in the year to August 31, after operating expenses increased 38.1% as it grew the business.

The overall costs increased even though the cost to serve clients dropped by 16%. Group operating expenses came to R213 million.

CEO Charles Savage said in a letter at the time that the costs included about R20m to integrate new partners such as Discovery Bank, Telkom and the new Southeast Asia partner.

At the time he also said, while the market “struggles to place a value on our efforts, we know we are building something special… that’s rewriting and fundamentally changing the financial fabric of the countries we operate in”.