Who's afraid of the RBA? Savers and Afterpay investors as shares sink

It's getting hairy for WAAAX investors.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Afterpay Touch Group Ltd (ASX: APT) share price is now down 19% this week on the back of a bearish research note of UBS backed up by a broadside from the RBA in its annual report into the payments system that's hot off the press today. 

Earlier in the week UBS flagged a number of risks for Afterpay, including rising competition in the U.S. and tighter regulation in coming to a 12-month share price target of just $17.25.

Around half the amount shares were changing hands for prior to the analysts' note. 

However, the RBA might have dropped a bigger bombshell this afternoon by flagging that it'll consider any "policy issues" over the growth of the buy-now-pay-later (BNPL) sector in Australia. 

According to the central bankers: "Merchants pay fees to the BNPL provider that are typically much higher than the fees they would pay on other payment methods, such as credit and debit cards. Most BNPL providers also have rules that prevent merchants from levying a surcharge on the customer to recover those fees. This can be problematic for merchants that feel compelled to offer BNPL services as a payment option for competitive reasons, but are unable to recoup the merchant fees from the customers that directly benefit from the service."

Fortunately for Afterpay investors it's not the central bank's job to legislate, but Afterpay's surcharge bypass was also flagged as potentially up for regulatory review by UBS's analysts in their note. 

As a consequence any changes to Afterpay's regulatory status could make the surcharge ban an unfair term or inequitable.

However, it's no secret that many retailers already offering Afterpay bump up prices marginally in the form of an undisclosed surcharge to protect margins. 

For now all this regulatory conjecture remains speculation on subjective commentary. However, skittish investors aren't waiting around for more bad news, with Afterpay shares down 7% today alone. 

It's getting hairy for WAAAX investors 

Elsewhere in the popular tech sector WiseTech Global Ltd (ASX: WTC) shares are in a trading halt as it prepares a response to an explosive report from short seller J Capital that alleges it has artificially inflated revenues and profits to fool investors. 

The impertinent U.S. short sellers even putting the boot into the $10 billion tech giant's mundane industrial estate location, with this photo of a company car parked outside the wonder from Sydney's Alexandria's headquarters. 

I must admit that family commitments mean I'm a regular visitor to the suburb of Alexandria that must be the sausage sizzle capital of Australia given the amount of home improvement stores, industrial estates, warehouses, and giant indoor play centres it contains. 

Alexandria is not Silicon Valley, but in fairness the freight logistics company's location is likely related to its proximity to Port Botany and Sydney Airport not too far down the road. 

Looking ahead, WiseTech's grudge match with its U.S. short seller could rival Afterpay Vs the RBA for box office pulling power. 

Tom Richardson owns shares of AFTERPAY T FPO and WiseTech Global.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of AFTERPAY T FPO and WiseTech Global. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Animation of a man measuring a percentage sign, symbolising rising interest rates.
Share Market News

Here's when Westpac says the RBA will now cut interest rates

Will borrowers need to wait until the middle of next year for relief? Let's find out.

Read more »

Boys making faces and flexing.
Opinions

3 ASX 300 shares to buy and hold for the long run

I believe these stocks have loads of growth potential.

Read more »

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

Hands reaching high for a trophy with a sunset in the background.
Record Highs

The ASX 200 Index is on its way to another all-time high today. Here's why

These blue chip stocks are driving the index towards a new record today...

Read more »

Group of friends trading stocks on their phones. symbolising the 3 most traded ASX 200 shares today
Share Market News

3 ASX mining stocks topping the most-traded list in October

Chinese stimulus news and company announcements likely contributed to the higher trading activity.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

Two people tired and resting after sports race.
Broker Notes

Fundie rates 2 ASX 200 stocks in short-term pain but with long-term gain potential

Blackwattle Investment Partners sees these 2 ASX 200 stocks as worthy of a buy and hold strategy.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »