Q: It seems possible that interest rates will be higher for longer, triggering flat or recessionary economy. How would you assess prospects for these 3 fintechs in this environment. Are there any that are vulnerable?
5i Research Answer:
Canada has already implemented three rate cuts, and more are expected. An economic slowdown is certainly possible, but these are part of any normal economic cycle, and most are short-lived. Also, investors have been anticipating recession for more than two years now. GSY and PRL might see increased business in tough times. As long as they continue to manage credit risk, we would not expect problems, really. IFC might see a slowdown in growth, but generally property and casualty premiums do not change much. Clients tend to not cancel insurance just because the economy is less-robust.