GCash could trigger tech listings
MANILA, Philippines — GCash operator Mynt Inc.’s massive initial public offering (IPO) could encourage more Philippine technology companies to tap the stock market, although getting the price right will be crucial to winning over investors.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said Mynt’s market debut could spur more share sales and fund-raising activities involving companies tied to technology and the digital economy.
READ: GCash gets SEC nod for blockbuster P92.3-B IPO
“The said IPO could also start more high-tech or digital economy-related share sales or fund-raising activities in the local stock markets,” Ricafort told the Inquirer.
He said this could include the monetization of lucrative local businesses involved in artificial intelligence and other emerging technologies that have attracted demand worldwide.
But 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.
Mynt recently secured approval from the Securities and Exchange Commission (SEC) for an IPO of up to P92.32 billion. This makes it potentially one of the country’s largest public offerings.
READ: GCash IPO might prompt reshuffle of PH portfolios
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. This falls under relaxed rules covering companies with exceptionally large expected market capitalizations.
While Ricafort sees the offering potentially opening doors for more technology-related fund raising, Trading Edge chief investment strategist Ron Acoba warned that its immediate impact on the broader stock market could be less favorable.
“(That is,) for the short term. In fact, the Mynt IPO is bearish for the market,” Acoba said when asked whether a successful offering could help revive the local IPO market.
He said 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.
Despite its projected P668.96-billion market capitalization, Mynt would also not immediately qualify for inclusion in the Philippine Stock Exchange Index, according to Acoba. INQ
