PSEi retreating as investors prep for GCash IPO – analysts

MANILA, Philippines — The local stock market could further retreat over the next two weeks, with investors selling their shares to pile up capital to place on the initial public offering (IPO) of e-wallet giant GCash.

Reyes Tacandong & Co. senior adviser Jonathan Ravelas yesterday said investors may pull away from the benchmark Philippine Stock Exchange index (PSEi) to assess their next trading move.

Ravelas said the PSEi right now is displaying every symptom that its investors are preparing for two things: the possibility of a US Fed rate hike and the IPO of GCash’s parent Mynt Inc.

“The market is in a hand-to-hand combat between positivity and uncertainty, and now people are weighing what would be Mynt’s pricing. When the market consolidates, the market is thinking of something,” Ravelas said at the Kapihan sa Manila Bay.

Mynt is preparing for an IPO that could raise a record P92 billion. The offer is composed of 8.02 billion in primary and secondary common shares, with an overallotment book of up to 1.2 billion secondary common shares.

Mynt’s indicative price is P10 per share, but the final rate setting is scheduled on Oct. 1, with the offer taking place between Oct. 6 and 12.

Ravelas said the maximum price of P10 a piece justifies GCash’s potential for further expansion, noting that Filipinos are still in the early stage of digital adoption.

The PSEi, for its part, has been showing signs of consolidation, struggling to recover after hitting 6,488.35 on July 21, but as Ravelas noted, another factor could be concerns over a Fed hike.

Philstocks Financial Inc. research manager Japhet Tantiangco said the IPO would help the PSEi recover in the long run. If the IPO turns out successful, he sees the market rallying again before the year ends.

“Investors are really looking toward this. If they [Mynt] perform well as they get into the market, then there’s the possibility that they could revive investor sentiment, and they could invite more investor participation in the market,” Tantiangco said.

Right now, discussions among analysts, brokers and traders center on whether Mynt deserves to be priced at a premium of P10 a piece, as some think the rate should be cut to P7.

Some IPO analysis point out that Mynt’s profit growth is beginning to slow down, and it may no longer be capable of turning in the 39-percent expansion it showed from 2023 to 2025.

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