Is Qiwi PLC (NASDAQ:QIWI) A Victim Of Tighter Russian Financial Regulations?


In its 4Q2016, Qiwi PLC (NASDAQ:QIWI) posted fairly strong results in which earnings comfortably beat expectations and a year ago quarter. But the excitement over the strong results appears to be beginning to fade away. What’s happening? Little has been said to explain the possible reasons for Qiwi’s recent pullback, but pending new regulations of the Russian financial system might just be the cause of the cracks starting to emerge in the stock.

It has been reported that Russian regulators are considering tightening the country’s financial sector. The target of the new financial regulations is said to be virtual wallet industry in which Qiwi PLC (NASDAQ:QIWI) is a player.

Anonymous transactions

It turns out that Russian regulators are expressing concern over the rise of anonymous virtual wallet transactions. That comes despite recent measures to cap anonymous digital wallet transactions.

Given its position as one of Russian’s largest payments processors, Qiwi PLC (NASDAQ:QIWI) could be impacted by stiffer regulation of the country’s financial system. Investors appear to taking those concerns at heart, thus the pullback in the stock. However, not everyone on Wall Street believes that the future of Qiwi is bleak.

Wall Street view

Zacks recently upgraded its rating on Qiwi PLC (NASDAQ:QIWI) to a BUY from a SELL. JPMorgan analysts have a HOLD rating on the stock. At William Blair, the company’s rating was cut to MARKET PERFORM from OUTPERFORM. Susquehanna analysts have a NEUTRAL rating on the stock.

What did Qiwi earn in the last quarter?

Qiwi PLC (NASDAQ:QIWI) will report its 1Q2016 on May 12. But in the last quarter, the company exceeded consensus earnings estimates. However, topline growth was a bit challenged with the figure falling short of the Wall Street expectations.

What else?

Besides the concerns over pending Russian tighter financial regulations, Qiwi PLC (NASDAQ:QIWI) appears poised for more growth considering its strong market position and rapid expansion of electronic payment processing industry.


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