PSEi retreating as investors prep for GCash IPO – analysts
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 of e-wallet giant GCash.
The Philippine Stock Exchange index (PSEi) may experience further decline over the next two weeks, as investors sell shares to accumulate funds for the initial public offering (IPO) of e-wallet company GCash. Jonathan Ravelas, a senior adviser at Reyes Tacandong & Co., stated that the PSEi is currently exhibiting signals that investors are preparing for two potential outcomes: a possible US Federal Reserve rate hike and the IPO of Mynt Inc., GCash's parent company.
The market is now caught between optimistic expectations and uncertainty, with traders evaluating Mynt's pricing. Mynt aims to raise a record P92 billion through an IPO offering 8.02 billion primary and secondary common shares, with an overallotment book of up to 1.2 billion secondary shares. The company's indicative share price is P10, but the final rate will be set on October 1, with the IPO taking place between October 6 and 12.
Ravelas believes the P10 price reflects GCash's potential for further expansion, given that Filipinos are in the early stages of digital adoption. The PSEi has been demonstrating signs of consolidation, struggling to recover since hitting 6,488.35 on July 21, but Ravelas also attributes this to concerns over a potential Fed rate hike.
Philstocks Financial Inc. research manager Japhet Tantiangco sees the IPO benefiting the PSEi's recovery in the long run. If Mynt performs well in the market, it could revive investor sentiment and attract more participants, potentially leading to a market rally before the year ends. Analysts, brokers, and traders are currently discussing whether Mynt's share price should be priced at P10 or if a possible reduction to P7 would be more appropriate, as Mynt's profit growth appears to be slowing down, and it may no longer achieve the 39-percent expansion it demonstrated between 2023 and 2025.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
