Pawnshops

Pawnshops: According to data presented by Senior Minister of State for Law, Mr Indranee Rajah in Parliament, overall pawnbroking loans in FY13 declined by more than 20% to $5.5b, despite the addition of more pawnshops. Accordingly, the industry has grown to 204 pawnshops in 2013 from 163 in 2010, with an estimated 95% of pledges being redeemed by pawners so far. We caution that the latest data could cause a knee-jerk reaction on the near-term outlook for SGX three listed pawnbrokers, namely MoneyMax, ValueMax and Maxi-Cash, with all three having seen their share price languished this year, largely dragged by a steep fall in gold prices, which has impacted on their jewellery trading businesses. At the current price, ValueMax trades at 2.8x P/B, Maxi-Cashat 2.7x and MoneyMax at 2.6x.