GCash IPO: Oversubscribed, Underbid

 

A 'sound' banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him—John Maynard Keynes 

In this issue: 

GCash IPO: Oversubscribed, Underbid

I. Blockbuster, by the Numbers

II. Follow the IPO proceeds

III. The Savings-Investment Gap is Not Weather

IV. The IPO Pitch and Its Circles

V. What Digitization Can and Cannot Do

VI. Big Names, Small Incentives

VII. PSEi Benchmarkism

VIII. The State at the GCash’s IPO’s Bell

IX. GCASH IPO: WHY NOW?

X. Benefiting Whose Balance Sheet?

XI. Conclusion: A Record IPO Is Not a Substitute for Savings 

GCash IPO: Oversubscribed, Underbid 

A record IPO met a thin bid: benchmarkism, the saving–investment gap, and whose balance sheet gets the mark 

Disclosure: 

The author has not subscribed to the IPO nor holds its shares as of this writing.

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I. Blockbuster, by the Numbers 

Blockbuster IPO, they say. 

At Php 60.9 billion with the greenshoe (Php 53 billion base), Mynt’s GCASH is the largest IPO in PSE history, ahead of Monde Nissin’s Php 55.9 billion (June 2021), Maynilad’s Php 34.3 billion (November 2025) and Converge ICT’s Php 29.08 billion (October 2020). 

Yet the trading debut disappointed. Shares closed flat at Php 6.60 on day one, then slid to Php 6.27, down 5%, over the first four sessions.

Figure 1

Interestingly, the PSE’s weekly average daily main board volume jumped 17.15%, from Php 5.380 billion to Php 6.303 billion. But that is smaller than the Php 10.722 billion in the week ending September 25 and the Php 7.698 billion in the week ending August 28. (Figure 1, upper chart) 

Ironically, in those four sessions GCASH generated Php 10.996 billion in turnover, or 40.9% of the Php 26.883 billion total. Four pesos of every ten went through GCASH, and that includes cross trades. (Figure 1, lower image) 

The concentration in the PSE manifested a trade-off: volume shifted in support of GCASH and ICTSI at the expense of the general market. Breadth was dominated by sellers, 405 decliners against 474 advancers. 

Yet despite a 40.9% share of turnover, GCASH could not generate a positive return. 

The data set is the tell: negative breadth, a negative return, an enormous share of turnover and unimpressive main board growth, for a supposedly monumental event. All of it points to a critical shortfall: the paucity of real savings. 

But of course, as a caveat, four days don’t make a trend. 

II. Follow the IPO proceeds 

Look at who got the money. 

Of the Php 53 billion base, only about Php 10.6 billion was new shares sold by Mynt. The other Php 42.4 billion was existing shares sold by private equity funds and other holders, and the greenshoe was secondary too. About one peso in five is new capital. The rest is savings changing hands so someone can exit. 

Savings are supposed to fund capital formation. Here, most of them funded a cash-out. 

Even the new money has a direction. The prospectus plan includes expanding Mynt’s lending business. In an economy short of savings, the one peso in five of fresh capital is meant, in part, to make more credit. 

III. The Savings-Investment Gap is Not Weather 

Some GCash advocates invoke the Philippines' saving–investment gap and prescribe more savings, as if the gap simply appeared in the national accounts. 

That is accounting masquerading as economics. 

The gap reflects the interaction of economic decisions, incentives, and policies. Easy money, deficit financing, and the diversion of resources toward “build and they will come” malinvestments, consumption and politically favored investments or projects affect how much income is saved, where capital flows, and whether investment generates sustainable returns. 

The problem is not merely how to mobilize savings, but how policies shape their creation and allocation. When credit expansion (unbacked by savings) and debt-financed activity distort economic calculation, financial claims proliferate while the underlying capital base weakens. 

Moreover, GDP-based savings-investment gap ratios inherit the limitations of the GDP denominator. Adding foreign income or OFW remittances changes the accounting perimeter; it does not explain the causal forces shaping saving relative to investment. 

Cite a statistic and call it economics. 

Yet, the GCASH IPO didn’t emerge from a vacuum. It is a response to years of easy-money policy and the pandemic lockdown that pushed transactions onto digital platforms. 

Financial mobilization cannot substitute for real savings, and a listing cannot repair capital consumed by distorted allocation. 

IV. The IPO Pitch and Its Circles 

The case for the IPO as a savings vehicle leans on three fallacies. 

The first is appeal to authority: the big names. 

The second is circular reasoning or begging the question: demand is real because the funds came in, and the funds came in because demand is real. 

One banker says strong appetite at Php 6.60 proves solid fundamentals. That is the circle. The same banker expects modest, mature-company returns at a Php 442 billion valuation, which is a growth price for a slowing business. 

The third is appeal to majority: millions of users, so it must be sound. 

V. What Digitization Can and Cannot Do 

Sure, GCASH may be the first major digital platform to list. 

It may help digitize the economy: faster and cheaper payments, less cash drag, more convenience. 

It may reach the informal economy, not just for transactions but for investments (GSave, GFunds, GStocks PH, GBonds, GCrypto, GInsure) and credit (GCredit, GLoan, GGives, GLoan Negosyo). 

But digitization carries its own risks: hacking, system breakdowns, power loss. 

Worse, it can become a political surveillance tool in an increasingly surveillance-driven economy. When every payment is tied to a verified identity, a ledger of conduct is one policy memo away, whatever political label it goes by: war on cash, social credit, infringement of liberty.

Figure 2

GCASH is also subject to the S-curve of technology adoption, assuming consumer conditions stay the same. Adoption peaks, as growth does, and that is another risk. (Figure 2, upper window) 

Take SWS: self-rated poverty ratings reached 55% in September (Q3), up from 49% in June, with another 9% on the borderline. Hunger rates also surged from 20.3% to 22.6% in September (Q3). (Figure 2, lower diagram) 

That doesn’t bode well for GCASH. 

Deepening stagflation—as this series has discussed—not only consumes savings but also undermines consumers’ health. 

Even the IPO’s boosters concede the curve is flattening. The platform has reached nearly every smartphone user, so growth must now come from extracting more revenue from each existing user. Those are the same users reporting 55% self-rated poverty. 

While GCASH may improve the current picture, it remains subject to prevailing economic conditions. If the saving–investment gap keeps draining savings and encourage balance sheet leveraging, GCASH’s source of growth is jeopardized. Sorry. 

A digital platform is only as good as the financial condition of its users. 

The real test is whether digitization improves price discovery, economic calculation, entrepreneurial investment and capital allocation. Faster payments alone don’t show it. 

Besides, first movers alone don’t guarantee a business model. They face competition within the industry and in technology. 

VI. Big Names, Small Incentives 

Many say GCASH has a solid roster of bookrunners and cornerstone investors: foreign funds, the IFC, domestic banks. Proponents say we should ‘trust’ them. 

But a roster of big names does not guarantee corporate viability or the welfare of those who buy alongside it. 

Bear Stearns and Lehman Brothers were big names too, and they vanished in the Great Recession. 

Recently, COA flagged SSS equity losses of Php 40 billion. Big name, big losses. 

After the 2008 crisis, Queen Elizabeth II asked why no one saw it coming. Author and mathematician Nassim Taleb’s answer is that a black swan is relative to the observer. It is a surprise to the dominant majority exposed to it and not to the few who saw the fragility. Crises don’t arrive while everyone is alert to them. 

Easy money feeds herding. Investors chase returns by leveraging up, the crowd defines the acceptable range of opinion, and risks outside it get dismissed as outliers. That is the pattern economist Hyman Minsky described (long calm breeds leverage as lenders extrapolate stability), Kindleberger (manias ride on credit expansion) and Reinhart and Rogoff (every boom is defended with “this time is different”). 

Number crunching is ex post. Theory is ex ante. Past performance doesn’t guarantee future results. 

On the day GCASH listed, South Korea’s data center Elice fell about 32% by the close of its trading debut, despite retail books 400x covered and institutional demand near 389x! 

Book-building demand is rationing, and the free market clears at a different price. 

Should global events bring tighter financial conditions, mass fund redemptions or a liquidity crunch, blessings may morph into a curse and the big names could be the major sellers. About 87% of post-IPO shares are under a 180-day lock-up, so the tradable float stays thin until roughly mid-April 2027. 

Besides, big names are involved for different reasons: some for profit, some for connections, some for exposure to a country or more. Naturally, there will be no evidence for personal affairs. Everything else is sold to the public as skin-in-the game. 

Buy-side and sell-side institutions (fees, commissions) also have different incentives from clients (returns). That is the principal–agent problem: the agent is paid on the transaction while the client bears the outcome. 

Relying on big names for the security of one’s portfolio is gambling, banking on appeal to authority and begging the question is a recipe for investment losses. 

VII. PSEi Benchmarkism 

Figure 3 

As of October 22, ICTSI carried 25.39% of PSEi weight and the top five (ICTSI, SM, BDO, BPI, SMPH) carried 55.06%, against under 3% and 42% in January 2020.  (Figure 3, upper pane) 

Trading, liquidity and broker activity are concentrated the same way. The pattern looks very much like coordination, and since nobody publishes the minutes, inference is all anyone has. 

Benchmarkism is the engineered substitution of index performance for the condition of the market beneath it. 

The PSE’s 2025 investor profile shows its unintended consequence: record enrollment, yet a historic low participation of only 11.8% of accounts active (institutions 14.6%, retail 11.7%). More registrations are not more capital. (Figure 3, lower visual) 

Concentration is the symptom. Benchmarkism is the disease. 

VIII. The State at the GCash’s IPO’s Bell 

Why has government been involved in promoting GCASH? The President rang the opening bell and said the timing mattered because the stock market needs renewed investor interest. The DTI cited MSME gains. Will they promote all IPOs? 

The President attended the last big one, Maynilad in November 2025, which also closed its debut slightly under its offer price—but closed at Php 16.9 (October 23rd) above its offered price at 15. 

Yet, note what the President conceded: the market is short of investors. If real demand existed, government’s say would not matter. 

Let there be no mistake: benchmarkism is happening at the political margins. 

The rules were also rewritten around the deal. 

The SEC lowered the minimum float for giant listings (MC 11, s. 2026), and GCASH was the first to use it, at 12%. In July, the PSE cut the PSEi float requirement from 20% to 15% for market caps of Php 250 billion and above, clearing the way for index entry. 

The PSE has since rewritten its index rules so a stock with a float this small can qualify for the PSEi. If Mynt gets in, every fund that tracks the index must buy it, whatever the price. 

Mandatory demand meeting thin supply is benchmarkism by design: the index mechanics set the price, and the price then passes for confidence. 

IX. GCASH IPO: WHY NOW? 

The biggest question is WHY NOW. 

Globe had teased the listing in 2024 and 2025, and the board and shareholders approved it on June 17, 2026, when the PSEi stood at 6,404. Given a depressed (bear) market, why even list? 

Three answers. 

The rules were ready, as above. 

Mynt’s growth is decelerating: net income rose 56% in 2025 but only 7.3% in the first half of 2026, so a listing at the top of the S-curve sells the growth, not the future. 

And the window: the maximum price filed in June was Php 10, and the final price was Php 6.60, a 34% cut that took valuation from about Php 669 billion to about Php 442 billion. A discount that size sits oddly beside a “super oversubscribed” book.

Figure 4 

As an aside, from June 17 (GCASH IPO announcement) to October 23 the PSEi returned -6.3%, AC +35% and GLO -14.32%. All things equal, that tells us the listing benefited Ayala Corp most. (Figure 4) 

Why not Globe? 

X. Benefiting Whose Balance Sheet?

Figure 5 

Globe’s Q2 revenue rose 8.02% to Php 46.954 billion, but income rose only 0.43% to Php 5.485 billion. Debt stood at a record Php 261.67 billion, up 5.56%, while interest expense and financing costs surged 16.7% to a record Php 4.67 billion. Cash was Php 19.7 billion, against Php 42.353 billion in Q1. (Figure 5) 

Globe’s equity share in Mynt’s net income was Php 3.7 billion in the first half, slightly below Php 3.8 billion a year earlier, and about 28% of its pre-tax income. 

The sale-leaseback of some 7,500 cell sites (2022–2025, Php 96.4 billion) didn’t stop debt from rising. 

Notice what the IPO did not do: Globe sold no shares, so no IPO cash reached it. This is not a cash bailout. The benefit runs through the value of what Globe already owns. 

Start with the 28%. Globe’s Php 3.7 billion share of Mynt’s first-half profit is a bookkeeping entry. The cash stays inside Mynt unless Mynt pays it out as a dividend. 

Now the stake. Globe holds about a third of Mynt. At the final price of Php 6.60, the market values all of Mynt at about Php 442 billion, so Globe’s third is worth roughly Php 145–150 billion on paper. Until the listing, that stake had no daily market price. Now it does, and a quoted price lets Globe borrow against the stake, sell part of it later, and record accounting gains. 

Globe’s own results show how much that matters. Its first-half profit fell 11% to Php 11.04 billion, and Globe blamed mainly a smaller “dilution gain” from Mynt than last year’s. A dilution gain is a paper gain Globe books when Mynt sells new shares at a higher price. Globe ends up with a smaller slice, but each slice is worth more. No cash comes in, yet reported profit moves, and the IPO’s new shares may generate another such gain. 

Now set the stake against the debt. Globe owes about Php 261.7 billion. Lenders watch a ratio: gross debt divided by EBITDA, which is roughly how many years of operating earnings it would take to repay what the company owes. Globe’s is 2.68x, and its loan agreements cap it at 3.5x. 

Our estimates suggest that this leaves room for roughly Php 80 billion more debt at today’s earnings. So this is not yet distress. It is collateral engineering: a bigger, quoted number on one side of the balance sheet to carry the debt on the other. 

Whose welfare? The one whose balance sheet gets the quoted mark. 

XI. Conclusion: A Record IPO Is Not a Substitute for Savings 

A record IPO needs a record bid. Instead, it got a rationed one: a price 34% under the filing ceiling, a flat debut, a slide to Php 6.27, four of every ten pesos of four-day turnover pulled from the rest of the market, four-fifths of the base deal an exit, and a President at the bell saying the market needs participants. 

That isn’t demand discovering a price. It’s a fixed pool of savings being re-sorted toward the issue the establishment needed priced. 

The platform may digitize payments. It cannot digitize savings into existence. A record listing is a financial event. A deeper capital market is an economic achievement. Collateral is not capital, and a listing is not a saving.

 

The PLUS Economy: A Symptom of Policy-Driven Bubble

All is not hopeless. Markets are turbulent, deceptive, prone to bubbles, infested by false trends. It may well be that you cannot forecast prices. But evaluating risk is another matter entirely—Benoit Mandlebrot 

In this short issue

The PLUS Economy: A Symptom of Policy-Driven Bubble

I. The Philippine Gaming Bubble Is Bursting in Real Time

II. Implications: Sucked into a Cesspool of Losses

III. The Buyback Mirage

IV. The Deeper Malaise: A Speculative Society

V. Financial and Economic Policies as Catalysts; CMEPA: A Gamified Economy in the Making

VI. Regulators to the Rescue?

VII. The Damocles Sword Overhead: San Miguel’s Plummeting Share Prices

VIII. Conclusion: A System Engineered for Bubble Blowing 

The PLUS Economy: A Symptom of Policy-Driven Bubble 

Fiscal fragility and easy money laid the groundwork for a drift to a casino economy; tax distortion threatens to ignite the speculative tinder 

For continuity, this post follows my earlier piece: "The Ghost of BW Resources: The Bursting of the Philippine Gaming Stock Bubble" 

I. The Philippine Gaming Bubble Is Bursting in Real Time 

Trading activity now reveals raw emotion driving wild pendulum swings. 

As summarized:

Figure 1 

DigiPlus Interactive Corp. [PSE: PLUS] surged 15.7% on Friday, with turnover hitting Php 2.33 billion—an all-time high—accounting for 31.75% of mainboard volume! This marks the second-highest volume share after the July 4th collapse of 23.9%, when PLUS’s share skyrocketed to 33.33%. Friday’s rally mirrored the July 7th oversold recoil of +14.6%, when volume share hit 30.2%, the third highest on record. (Figure 1) 

This incredible volatility, backed by stunning trading volumes, shows that the bubble's deflation is still very much underway. 

II. Implications: Sucked into a Cesspool of Losses 

PLUS’s massive footprint in PSE volume underscores how deeply—both retail and institutional players—are entangled in its downside volatility vortex—sucked into a cesspool of losses, where investors have morphed into gamblers.

Figure 2

Many who suffered losses are pouring in more—anteing up or doubling down on losing positions to lower their average entry, hoping that a recovery might redeem them or restore their capital. This Martingale approach—catching a falling knife with both hands—only heightens the risk of ruin. (Figure 2, upper image)

Moreover, nursing drawdowns, many retail accounts will be sidelined, deactivated, or rendered inactive. 

Worse, we don’t know how much of this frenzy is credit-fueled or margin-driven. 

Yet, the biggest question: how exposed are financial institutions—and how compromised? 

III. The Buyback Mirage 

Bulls have pinned hopes on a Php 6 billion buyback. 

But as shown above, it’s a smidgen of total trade—worth less than this week’s volume. 

Down by 40.2%, PLUS’s weekly turnover hit Php 6.4 billion, or 19.3% of mainboard volume—an all-time high. 

Yet, the buyback is not capital formation—it’s capital consumption. Its intent is to support a price bubble, an unsustainable dynamic. Instead of being channeled into productive activity, capital is consumed in positional losses, resulting in both income shortfalls and balance sheet erosion. 

Other gaming issues, Bloomberry Resorts Corporation [PSE: BLOOM] and Philweb [PSE: WEB], likewise plummeted 6.32% and 17.4% week on week, respectively, reinforcing their recent price declines. (Figure 2, lower graph) 

IV. The Deeper Malaise: A Speculative Society 

This episode reveals just how desperate the market has become for a return to the bull days of the PSE. Chasing yields at any cost has become the new normal. 

But the gaming bubble is a symptom, not the disease. 

The gambling boom has gripped not only ordinary people reeling from inflation, but has also migrated into the PSE itself. 

The PLUS bubble has become a second front for digital gamblers. Or put differently, casino-style gambling has migrated to the stock market. 

Media and gaming apologists have deflected focus to the politics of a potential gambling ban. 

Yet given the sanctimonious cries of social democratic politicians who campaign to ban everything unpopular—should regulators now ban the stock market, too? 

Remember: drugs were the political obsession of the last administration. Now, gambling is the new public enemy. 

The war on POGOs has now morphed into a broader war on gambling. But do prohibitionists really think they can control human behavior through force alone? Will they succeed in imposing virtue—or will they help blow up the fiscal position (already at risk of hitting another record deficit) and magnify systemic corruption? 

Yet, haven’t you noticed? A political trend with every new administration is the use of its coercive political machinery to wage war against an unpopular minority—portrayed as evil. From drugs, to POGOs, to speculative finance—public enemies are manufactured, and the cycle repeats. 

These symptoms are not new.

Figure 3

The unraveling of the 1999 BW Resources bubble was followed by another boom-bust episode with the 2000 SSO-Philweb merger. These misallocations ultimately dragged the Phisix (now PSEi 30) to its knees by 2002. (Figure 3 upper diagram) 

Are we seeing echoes of that dynamic now? 

V. Financial and Economic Policies as Catalysts; CMEPA: A Gamified Economy in the Making 

Is this what the government had in mind with the Capital Market Efficiency Promotion Act (CMEPA)—a gamified economy modeled after PLUS? 

Read our earlier post on CMEPA "The Seen, the Unseen, and the Taxed: CMEPA as Financial Repression by Design" 

The claim that CMEPA is a tax reform to “benefit stocks” via reducing the stock transaction tax (STT) is superficial at best—a textbook case of the fallacy of division. 

In truth, CMEPA is a reprogramming of the public’s incentive structure—for households, corporations, and even government—towards short-termism, speculation, and consumption. 

Its standardized 20% tax on net income punishes savers, forcing them to seek speculative outlets—exactly what STT “reforms” aim to do. 

Add to this the BSP’s easy money and the crowding-out effects of deficit spending, and you have a perfect recipe for a bubble economy—the PLUS economy. 

Savings and borrowed money alike are being diverted into asset punts—not just in stocks, but in property as well, enabled by the BSP’s distorted, inflated Property Price Index. 

As part of the grand policy of inducing speculative juices—or animal spirits—in the real estate sector, the Social Security System (SSS) reportedly acquired Php 500 million worth of shares in Century Properties Group [PSE: CPG] via a special block sale. The purchase, equivalent to a 6.39% stake, was executed at a discount to market price. (Figure 3, lower chart) 

Since hitting its trough in Q2 2024, CPG’s share prices have more than doubled! 

This move not only signals institutional participation in the speculative drift but also raises questions about how public funds are being deployed to stimulate asset inflation. 

When pension reserves chase yield in property equities—backed by inflated indices and easy liquidity—it reinforces the very fragility the system claims to hedge against. 

VI. Regulators to the Rescue? 

Interestingly, regulators floated the idea of mandatory listings for online gambling firms—in the name of “transparency.” Was this a disguised attempt to rescue PLUS’s hissing bubble? 

Has the PSE been so starved of IPOs that it enlisted the help of regulators to bankroll listings—using mandates and the CMEPA’s policy nudges?

Figure 4

As of Q1 2025, the PSE has posted only one IPO (Topline Business Development, PSE: TOP) against two delistings (voluntary/involuntary)—Philab (DNA) and Keppel Philippines (KPH-KPHB). (Figure 4, upper visual) 

This proposed mandate reveals how authorities increasingly perceive the value of the stock market: a dopamine-laced feedback loop for short-term thrills or a market that hopes to accomplish "something for nothing" or share price inflation built on momentum and easy money. The very definition of a bubble. 

VII. The Damocles Sword Overhead: San Miguel’s Plummeting Share Prices 

As political and market attention fixates on gaming, another looming threat quietly unravels—the Damocles Sword hanging over the markets and the economy: San Miguel Corporation—a Php 1.5 TRILLION+ debt colossus—continues to see its share prices erode as liabilities climb—another potential catalyst for broader market instability. (Figure 4, lower window) 

VIII. Conclusion: A System Engineered for Bubble Blowing 

DigiPlus may be the flashpoint, but the broader market pathology runs far deeper. This is no rogue episode—it is the byproduct of a system engineered to reward velocity over value, status over functionality, dopamine over discipline. 

The convergence of fiscal fragility, monetary excess, and misaligned incentives has transformed the capital market into a gamified arena—one that pulls in both institutions and households into a void of unproductivity and capital consumption. 

CMEPA doesn’t fix this system— it formalizes its dysfunction. It deepens its institutionalization. 

The danger isn’t just the collapse of PLUS. It’s the normalization of a casino economy.  

Is the Delisting of Metro Pacific a Bullish or Bearish Sign for the Philippine PSE?

  

Is the Delisting of Metro Pacific a Bullish or Bearish Sign for the Philippine PSE? 

 

Is the delisting of MPI a bullish sign for the Philippine PSE?   Our brief inquiry is premised on the prism of the health of the capital markets, MPI's liquidity conditions, and socionomics. 

 

Manila Bulletin, April 27: (bold mine)  

Metro Pacific Investment Holdings Company (MPIC) is planning to voluntarily delist from the Philippine Stock Exchange after a P48.4 billion tender offer by a consortium of its significant shareholders and Mitsui of Japan. In a disclosure to the Philippine Stock Exchange, MPIC said it has received the Tender Offer Notice from a consortium consisting of Metro Pacific Holdings, Inc. (MPHI), GT Capital Holdings, Inc., Mit-Pacific Infrastructure Holdings, Inc. (MPIH), and MIG Holdings Incorporated. MPHI is a member of the First Pacific Group owning 46.1 percent of MPIC while MPIH is a joint venture of Mitsui and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development…In a disclosure to the the Hong Kong Stock Exchange, First Pacific said “The Bidders feel that the intrinsic value of MPIC’s core investments in infrastructure in the Philippines has not been fully reflected in MPIC’s share price for some time.” “The tender offer and successful delisting will allow MPIC’s minority shareholders to realize a significant premium over historical share prices of MPIC,” it added. The firm noted that, “At the same time, a delisted MPIC will be better aligned with the objectives of the Bidders to continue investing in long-term infrastructure projects supporting sustainable economic growth in the Philippines.”  

Does the delisting of Metro Pacific signify a bullish sign to the Philippine stock market? 

 

Well, for some people, it is. 

 

The following explains our humble two cents (only our opinion—not a piece of advice). 

 

In the first place, Metro Pacific is an incumbent member of the elite PSEi 30. 

 

Second, the delisting represents a paradox to the goals of the Philippine Stock Exchange (PSE). The PSE has been actively recruiting firms to list. It aims to increase its membership so the PSE can improve its finances. It targets 14 IPOs this year.  

 

But then a member of the PSE pulls out!  Also taken private last February was the erstwhile listed Eagle Cement!  Great.   

 

Third, developing the capital markets (financialization) requires the enlistment of more publicly listed equity and fixed-income securities.  More companies would have access to the public's savings.  Savers may benefit from capital appreciation and dividend/coupon yields of the issued securities.   The public may price shares or fixed-income securities against perceived risk-reward tradeoffs based on the discounting of their future financial performance. 

 

Prices of securities may underpin the collateral values for borrowing.  Based on its market values, equities may help fund various corporate deals, including M&As. 

 

So how will MPI's pullout improve the capital markets? 

 

Next, the news quoted its largest stockholder, First Pacific, stating that "the bidders feel that the intrinsic value of MPIC’s core investments in infrastructure in the Philippines has not been fully reflected in MPIC’s share price for some time."   

 

Have they implied that MPI's pullout represents a "market failure" via share mispricing? And the delisting, thus, marshals this enticing opportunity exclusively to the principal shareholders? Or are they blaming the market for being blind to the profitable opportunities presented?    

 

The thing is, the consensus assertively claims that a bull market is around the corner.  

 

In this case, should a bull market become apparent, could the market not price its share much higher than the tender offer? Therefore, would MPI not suffer a substantial "opportunity loss" by withholding public participation? 

 

Or, if the current majority shareholders are "confident" of the firm's "intrinsic value," why not allow the markets to share this sentiment? 

 

That is, why the choice of mark-to-model instead of mark-to-market? 

 

Or, could it be that the prospects of a bull market and the roseate fundamentals for the firm signify "elusive" aspirations? 

 

But there could be more. 

 

Could MPI’s principal shareholder have been suggesting that the market’s inability to seize and take advantage of its "intrinsic value...for some time" extrapolates to possible signs of emerging liquidity drought?  

 

Let us do a few numbers. 

 

In MPI’s 2022 annual report, its outstanding debt of Php 292.467 billion in 2022 was up 18.7% from Php 246.342 billion, or an increase of Php 46.13 billion!  It reported a net income of Php 13.14 billion, up by 13% from Php 11.7 billion a year ago.  Net debt represented 3.5x the annual marginal gains of net income. Meanwhile, the company's cash reserves dived by 25% to Php 33.6 billion in 2022 from Php 44.9 billion in 2021. Also, MPI’s market cap as of April 28 was Php 122.245 billion.  So in 2022, debt eclipsed its income, while outstanding debt signified over twice its market cap! 

 

I could be wrong; however, does the unrecognized/unappreciated "intrinsic value" constitute the outgrowth of debt over income in the face of falling cash reserves? 

 

Could taking MPI into the private indicate its undertaking remedial liquidity measures through ownership restructuring—post-delisting? That's a guess, though.

 

And let us consider the sentiment.  

 

Is the route to MPI’s exclusivity a symptom of their leadership’s mounting vulnerability? 

 

Aside from compliance costs, is public scrutiny not the primary difference between an exclusive and publicly listed firm?  

 

Is MPIC withdrawing from the public's eye because of this? 

 

It can't be a positive sign to the capital markets when PLDT revealed last year that it overspent by some Php 48 billion in the last four years.   It means that from 2019, their financial reports understated the costs and overstated the income, as previously discussed. 

 

Have the private regulator and authorities, represented by the PSE, SEC, and BSP, done enough to protect the investing public, especially the minority shareholders, and other stakeholders? 

 

And could it be a coincidence that PLDT and MPIC share the same Chairmanship?  

 

We are not interested in intrigues. But could there be a relationship between the recent developments in PLDT and the delisting of MPI?  Or could these incidences represent merely a coincidence?  

Historian Charles Kindleberger presciently wrote that different forms of corporate malfeasance occur on market tops or during bear markets. 

Our task is not to scrutinize this but to see how the current events affect the capital markets.  

 

And based on the field of socionomics, the avoidance of scrutiny could be a sign of vulnerability or a substantial erosion of confidence. 

 

This tweet from Adjunct Professor and Author Peter Atwater explains:  

Environments of low confidence are "Eras of Revelation" - when what was overlooked, ignored, or unspoken, all comes out into the open. Scrutiny naturally rises as confidence falls.  

In all of this, yet a bullish sign from MPIC's delisting?