GCash IPO Could Spur More Philippine Tech Listings

Mynt Inc., the operator of the Philippines’ leading mobile wallet GCash, has secured approval from the Securities and Exchange Commission (SEC) for an initial public offering (IPO) of up to P92.32 billion, potentially making it one of the country’s largest public offerings. This blockbuster IPO is expected to encourage more Philippine technology companies to tap the stock market. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the said IPO could start more high-tech or digital economy-related share sales or fund-raising activities in the local stock markets. He noted that this could include the monetization of lucrative local businesses involved in artificial intelligence and other emerging technologies that have attracted demand worldwide. However, much could hinge on how Mynt prices its shares. Ricafort said the final offering price would be determined by valuations as well as negotiations with prospective buyers and investors. Investors would particularly consider whether the IPO price leaves enough upside potential after the company makes its stock market debut, he added. The GCash operator expects an initial market capitalization of about P668.96 billion. The SEC also allowed Mynt to debut with a 12-percent minimum initial public float, below the usual 15 percent, under relaxed rules covering companies with exceptionally large expected market capitalizations. Meanwhile, Ron Acoba, chief investment strategist at Trading Edge, warned that the immediate impact of the Mynt IPO on the broader stock market could be less favorable, even bearish, in the short term. Acoba cited that institutional funds are currently underweight equities or neutral at best amid high interest rates, slow growth, weak earnings growth, a weak peso, high inflation, political noise, and policy uncertainties. As a result, institutions participating in Mynt’s IPO may have to sell some of their existing stock positions to finance their GCash share purchases, he said. Acoba also pointed out that despite its projected P668.96-billion market capitalization, Mynt would not immediately qualify for inclusion in the Philippine Stock Exchange Index (PSEi). Source: Inquirer Business