Absorptive capacity and exemptive relief

Market sentiment is showing certain signs of improvement, an emerging consensus among the biggest players.

- FIL C. SIONIL

Amid growing geopolitical tensions, the outlook remains positive, with the domestic bourse gradually becoming “more conducive” to initial public offerings (IPOs). Mobile wallet service GCash and Maynilad Water Services Inc. are reportedly on the pipeline, moving forward.

The latest I've heard along the market corridors is that the management of GCash is seriously considering the possibility of seeking regulatory relief from the Philippine Stock Exchange (PSE) and the Securities and Exchange Commission (SEC) to relax the minimum public float to 10 percent.

Gathered from a top but discreet source familiar with the much-awaited GCash IPO, the management of the e-wallet market leader plans to request an “exemptive relief” due to the “absorptive capacity of the market.”

You may ask, what exactly is the market’s absorptive capacity under the current conditions? “It’s fragile,” was the curt response of one of my favorite market professors, Andro Leo “Andoy” Beltran, First Metro Securities Brokerage vice president and head of business development and market education department.