Ozforex Group Ltd (ASX: OFX) saw its share price jump more than 5% today after the foreign exchange provider reported that it had recorded the highest-ever daily and weekly activity levels ever. The share price rose 5.5% to $2.29.
In an announcement to the ASX, OzForex (known as OFX) says global payment activity spiked in the lead up to the European Union referendum and after the outcome became clear.
The company says it set new daily and weekly benchmarks – surpassing previous activity levels that were set during 2008 in the Global Financial Crisis – the last time they had seen this sort of volatility.
OFX says despite the high levels of market volatility and pressures on general market liquidity, which caused some other market participants to suspend or limit their services to customers, OFX was able to continue operating as normal.
CEO Richard Kimber put that down to strong relationships with 18 banking partners around the world. Those banks give OFX the liquidity needed to cover customer orders.
UK travel company Thomas Cook was forced to suspend online forex sales, "after seeing overwhelming demand". The British pound dropped 2% to US$1.323 on Friday – its lowest level since 1985, according to Marketwatch.com.
However, OFX didn't say what the impact was on revenues and earnings – which you would expect to be positive. That suggests the impact is fairly minimal – although it could lead to incremental business over time.
OzForex saw its share price slide on Friday as the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) was hammered down over 3%.
Foolish takeaway
Currently trading at $2.29, Ozforex's share price is still a long way away from its 52-week high of $3.55 set in November, after Western Union announced a possible bid for the company, valuing at between $3.50 and $3.70 per share.
Western Union walked away after doing due diligence, suggesting they may have found some risks they didn't like. That suggests a higher level of caution is required when looking at Ozforex.
