The Block Inc (ASX: SQ2) share price is up almost 5% in early trading.
The leading buy now, pay later (BNPL) stock closed yesterday trading for $104.32 per share. Shares are currently changing hands for $109.40 apiece, up 4.9%.
Here's what's helping drive investor interest today.
Image source: Getty Images
Why is the Block share price soaring higher today?
The Block share price is flying higher today following a 2.1% leap yesterday (overnight Aussie time) on the Nasdaq Composite (INDEXNASDAQ: .IXIC).
Block, which acquired Afterpay in January last year, is dual-listed in Australia and the United States. And Block's shares soared 6% on the NYSE yesterday.
The big gains for tech stocks more broadly, and the Block share price specifically, come as investors are beginning to price in less aggressive rate hikes from the US Federal Reserve, and potentially other global central banks like the RBA.
This follows last week's collapse of SVB. With governments and investors now worried about the potential for other bank failures, the pressure will be on central bank bosses to ease off with rate hikes. That, as you know, would be good news for Afterpay and the wider BNPL sector.
Easy on the regulations
Block shares are also making headlines today as the company's CFO Amrita Ahuja wades into the regulatory debate.
The government is still considering three separate proposals when it comes to regulating the BNPL sector. The most stringent would see Block and other BNPL players subjected to the same regulations as credit card companies.
But as The Australian Financial Review reports, Ahuja said there are key differences between BNPL and credit.
"It is important to recognise this is a unique product: it is not a 30-year mortgage or a car or student loan," she said. "It is effectively working capital for many of our customers. The typical loan sizes are relatively small and typically pay off in a month or so."
Ahuja added:
We want to help bring regulators along on the journey in terms of the education on how this product is unique, and serving customer needs for cash flow management, and [determining] what are the appropriate protections given that.
Block share price snapshot
As you can see in the chart below, the Block share price has been a strong performer in 2023, up 18% since the closing bell on 30 December.
