PEXA Group (PXA) $13.16

The property settlements platform was out with a 3Q update yesterday which unsurprisingly showed a slowdown in transactions through the platform, down -9% on 3Q22, and down -12% on the prior quarter. Shares were initially higher before rolling off on the surprise rate hike from the RBA on the view that volumes would continue to slow.

A bit of history, PEXA is an electronic lodgement and settlement network that aligns communication in property transactions between vendors, banks, lawyers and other participants in the transaction. It was formed by what is now known as the National Cabinet, funded by the Big 4, with Link Administration (LNK) also providing capital in later rounds before its IPO in 2021. There is a growing push from all stakeholders to use a platform in property settlements and refinancing, and it really boils down to two options in the Australian market, PEXA or ASX backed Simpli. They are also moving into the UK market with plenty of upside seen, though the market hasn’t factored much value in for the push overseas.

• PEXA is our preferred play for exposure to a rebound in the number property transactions occurring.