The planned initial public offering (IPO) of Mynt Corp., the parent company of e-wallet GCash, could reshape the Philippine Stock Exchange (PSE) by bringing one of the country’s largest technology companies to a market long dominated by banks, property developers and industrial firms.

Market participants said the offering could boost the exchange’s appeal to foreign investors, prompt changes to index rules, and unlock value for shareholders of Globe Telecom Inc. and Ayala Corp.

Exposure to homegrown tech company

April Tan, head of research at COL Financial, said Mynt’s debut would give investors exposure to a homegrown technology company that has been largely absent from the local bourse.

“For the longest time, one of the issues that investors have in the Philippines is that we are all traditional companies. You know, we’re not part of the other markets that have tech stocks, but with the listing of GCash, it changes that,” Tan said.

She said the listing could make local equities more attractive to passive institutional investors and global index funds that typically seek exposure to fast-growing technology companies.

Changes in PSE’s free-float rules

Tan noted Mynt’s inclusion in the benchmark Philippine Stock Exchange Index (PSEi) would likely require changes to the exchange’s free-float rules.

“And we feel that the PSE would most likely want Mynt to be part of the index. But remember, Mynt is going to be listing only 12.5 percent of the company. So, what would happen for Mint to become part of the PSEI index? They would have to allow companies with a free float of less than 20 percent to be part of the PSEI index,” Tan also said.

A revision to the index methodology could have broader implications for the market, allowing other highly capitalized companies with relatively low public floats, such as Aboitiz Power Corp., to qualify for inclusion in the PSEi.

Value of Globe, Ayala investments

Tan also said the IPO could help investors better recognize the value of Globe and Ayala’s investments in Mynt, which news reports have valued at around $8 billion.

“So, news reports are saying that GCash’s parent Mynt is around $8 billion in value. You know, the shares owned by Globe and Ayala Corp., that’s quite a lot of money. It seems that if you look at the valuation of Globe and Ayala right now, the large value of these investments is not yet reflected in their share price,” she said.

Mynt’s shareholders recently approved plans to list up to 12.5 percent of the company through an IPO, paving the way for what could become one of the Philippine market’s biggest technology listings.

Strong Q1 growth

GCash posted strong first-quarter growth, with income attributable to Globe Telecom surging 120 percent quarter-on-quarter to P1.9 billion, driven by higher usage of its lending and wealth products.

Its lending arm, Fuse Financing, reported cumulative loan disbursements of P406 billion, up 60 percent year-on-year, while GStocks PH reached 1.9 million registered investors and GCrypto grew to 5 million users.

GCash also remained the top InstaPay destination by transaction volume and expanded its international money transfer services to 16 countries