BIZ BUZZ: GCash’s oversubscription plot twist

An oversubscribed initial public offering (IPO) can draw a crowd. Getting that crowd to stay is another matter.

GCash’s initial stock price weakness despite strong subscription demand illustrates that distinction, according to COL Financial chief equity strategist April Lee-Tan.

“Not all investors who buy an IPO are long-term investors,” she said.

Some subscribers are looking for a quick gain. When the expected rally fails to materialize, they may sell instead—adding pressure just as a stock starts trading.

The market backdrop also matters. Tan pointed to peso weakness, sharply higher interest rates and unfavorable global conditions as factors weighing on appetite for equities.

“We had the BSP raising rates by a larger than expected pace. So that hurt investor sentiment for equities as well,” she said.

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