By Sheena Mae E. Sancap
SHARES of Mynt, Inc., the parent company of GCash, fell after its Philippine Stock Exchange (PSE) debut last week as investors took profits and awaited fresh earnings catalysts.
“The debut absorbed a lot of liquidity,” Jervin S. de Celis, an equity trader at the First Resources Management and Securities Corp., said in an e-mailed reply to questions. He added that a “fresh, thinly floated listing carries a supply overhang and no earnings catalyst yet.”
Mynt, which trades under the ticker symbol GCASH, closed at P6.27 each on Friday, below its debut close of P6.60 on Oct. 20.
It was the most actively traded stock last week, with 1.67 billion shares worth nearly P11 billion changing hands from Oct. 20 to 23, according to PSE data.
Its decline was steeper than the 1.2% drop in the financial index and the 1.3% decline in the broader PSE index during the same period.
“The decline in the stock price was driven by pessimism in overall market sentiment, brought on by persistent geopolitical uncertainty that drove the local currency to its weakest level, surpassing P63 against the dollar,” said Jash Matthew M. Baylon, an equity analyst at the same brokerage.
Mynt raised P60.9 billion from the sale of 9.23 billion shares at P6.60 each, surpassing Monde Nissin Corp.’s P55.89-billion offer in 2021 and becoming the biggest initial public offering (IPO) in Philippine market history.
Mr. De Celis said the offer and subsequent retail trading activity drew funds away from other financial stocks as investors funded their allocations.
“GCASH held close to its offer price, which signaled that stabilization and demand were working,” he said.
Philippine Stock Exchange, Inc. President and Chief Executive Officer Ramon S. Monzon earlier described the offer as a major catalyst for the local stock market. The listing gave Mynt a market capitalization of P441.51 billion, making it the seventh-largest company on the exchange.
The company offered more than 8.02 billion common shares, with an overallotment option of up to 1.2 billion shares.
Retail participation was supported by GStocks PH, the stock trading platform within the GCash app operated by AB Capital Securities, with more than 140,000 users trading nearly P1.1 billion worth of shares.
Despite strong retail demand, the stock finished the week below its debut close.
Mr. De Celis said the decline was largely driven by profit-taking from investors who received IPO allocations.
“While retail is buying the brand, institutional investors are likely waiting for clearer signals on how the company sustains earnings in a high-interest-rate environment,” he said.
“The usual pattern in mega-IPOs is that retail players provide day-one volume and narrative momentum, while institutions set the price floor and ceiling over weeks,” he added.
He said Mynt’s listing has prompted investors to reassess valuations between fintech companies and traditional banks.
“GCash’s listing forced investors to reconsider the fintech versus bank premium,” Mr. De Celis said.
Analysts also cited higher interest rates as a risk to the company’s outlook.
The Bangko Sentral ng Pilipinas raised its policy rate by 50 basis points (bp) to 5.5% on Oct. 22.
“The 50-bp reverse repurchase rate hike is a meaningful liquidity drain,” Mr. De Celis said, adding that higher funding costs could pressure lenders that rely on market-based funding.
Mr. Baylon said the rate increase added to selling pressure as investors weighed its impact on consumer credit and loan quality.
Mynt posted revenue of P43.15 billion and net income of P10.82 billion in the first half.
Mr. De Celis expects full-year revenue of P89 billion to P91 billion and net income of P21 billion to P22 billion.
Mr. Baylon forecasts full-year net income of about P21.05 billion, supported by growth in net interest income and user expansion.
“While GCASH is seen to be an attractive investment for its growth potential, we continue to monitor the risks that could lead to a downgrade in our valuation,” Mr. Baylon said.
Mr. De Celis placed support at P6.40-P6.50 and resistance at P6.75, while Mr. Baylon sees support at P6 and resistance at P6.60.
“Upside catalysts are the third-quarter (Q3) results, clarity on the lock-up, MSCI/FTSE or PSE index inclusion and lending-quality data,” Mr. De Celis said. “Downside risks are a weak Q3 print, the rate-hike overhang on consumer credit and the end of price stabilization.”