Traders must be scratching their heads in frustration. If this happened before trading floors became sophisticated, those black and bulging telephones would be ringing endlessly because of investors dumping their shares like it’s the end of the world.

Philippine stocks are again the world’s most unloved stocks. A bear market is just around the corner.

Technically, the Philippine Stock Exchange index hasn’t entered the bear market just yet – as of this writing – as the PSEi should be 20 percent below its highest recorded level for the year or at 7,262.70, using the Jan. 29, 2018 closing level of 9,078.37.

But the sentiment no doubt is already bearish. I wouldn’t be surprised if it happens soon.

What’s happening in the stock market, though, isn’t surprising partly because of the peso depreciation. The peso closed at 53.44 to $1 on Tuesday, slightly up on profit taking from Monday’s 53.48 to $1, but I’m sure it will continue to depreciate.

But veteran stock market players said a slump in the index should be an opportunity to look for bargains.

As the British nobleman and member of the Rothschild banking family Baron Rothschild said, “the time to buy is when there’s blood in the streets.“

But the question remains unanswered. What’s happening to the peso? Excessive deficits on trade, a balance of payments deficit, and spiralling inflation are clearly affecting sentiment and it shows that the financial markets are worried about the Philippine economy.

Monetary authorities said the peso has drastically weakened because the dollar has been strengthening. I argue that it is really the peso that continues to weaken against the dollar amid a growing trade deficit.

And no, contrary to what others say, a weak peso is not necessarily good for dollar earners, including beneficiaries of overseas Filipinos, because prices of goods here at home have been going up.

Many of our industries are also highly dependent on imported raw materials, which means that because of the weakness of the peso, they would need to shell out more for their production costs.

What happens next is still anybody’s guess. The market is getting mixed signals from the Bangko Sentral ng Pilipinas, but clearly, the peso needs a more hawkish BSP.

Peter Lundgreen of Lundreen Capital said the BSP should show enough sovereignty in order to maintain the monetary grip on the economy and show the financial markets that it has the necessary authority.

D.M. Wenceslao

In the meantime one company is braving the stock market – the first to go public this year – despite the uncertainties. D.M. Wenceslao’s offer period has already commenced.

Word among brokers is that D.M. has yet to gain momentum because investors are still jittery over the market in general.

Owned by the Wenceslao family, D.M. has priced its initial public offering at P12 per share to raise P8.15 billion. The offer price in its registration statement was P22.90 per piece with a plan to raise P15.5 billion originally.

Why did D.M. push through with its offering, while others did not? Reggie Cariaso, managing director at BPI Capital, which is the joint global coordinator and bookrunner for the transaction said, “There is good quality demand to a deal at that price.”

For sure the company has its strengths. It is behind Aseana City, a 107.5-hectare master planned reclamation development in the Bay area.

It currently has a land bank of 77.56 hectares, bulk of which is in Aseana City with 56.9 hectares.

It also has a diversified earnings base comprised of rental income from investment properties, and revenue from sales of condominium units.

But there are risks in Aseana City. Changes in government policies and the regulatory environment in the offshore gaming sector – which is a major industry behind the property boom in the Bay Area – may change.

There’s also stiff competition from other developers in the area such as the SM Group and Ayala.

The UP Shopping Center, still untouched and decaying

Three months after a fire ripped through the UP Shopping Center, the destroyed building remains untouched and is now just another decaying structure inside the university.

The former tenants have set up makeshift shops in the nearby vacant lot, but are at a loss on what will happen. There’s no renovation being undertaken and no clear plans of relocation, too, they said.

In the meantime, they are waiting for answers.

Felino L. Ampil, a former dean of the University of the East, reminded me that even non – UP students from other schools near and far from Diliman are saddened by what happened. He said many non UP students also patronized the UP Shopping Center.

“I used the UP Shopping Center for other tasks as in to reproduce and bookbind the extra six plus two spare copies of my MA thesis. among others,” he said.

Even his granddaughter, who studied at the nearby Ateneo de Manila, also used our beloved SC.

“These non-UP outsiders are not aplenty.... but they nevertheless are part-and-parcel of the client-users of the UP Shopping Center...” he said.

I really hope UP can rebuild it. Many are fervently hoping for that, too.

Iris Gonzales’ e-mail address is eyesgonzales@gmail.com