Animal spirits or a Mug’s game?

Mug’s game: A British expression for a foolish, pointless, thankless activity — a lost cause not worth pursuing.

Everyone’s ears are bleeding from the mantra that ASEAN’s oldest bourse is eating the dust of neighbors it once mentored. Vietnam, meanwhile, is the regional standout — up strongly and newly upgraded by FTSE Russell from frontier to secondary emerging market. The comparison stings because it is no longer unfair.

Some perspective: From 1987 to its 2018 pre-Covid peak, the PSE rose from 1,000 to about 9,000 points — an 800-percent return over 30 years, or around 8 percent compounded annually. Roughly keeping pace with the S&P’s 9-10-percent clip for the same period. Not too shabby. Not dead. Not a mug’s game — at least not then.

Except for the record REITs issued during early Covid, capital markets have slid into malaise. One turning point may have been December 2019, when Malacañang effectively told the Singapore arbitral body to go hang — refusing to honor a utility company’s award days after an independent tribunal ruled against the Republic. Not exactly a love letter to foreign capital.

The Mynt IPO should bring the PSE and the country back into the limelight. At a potential P92.32-billion offering and projected P668.96-billion market capitalization, this is not just another listing but a market event. GCash is endemic, touching almost every household, and a consumer fintech powerhouse. Its aftermarket performance bears watching.

Geopolitics is getting nastier, with nervous capital crowding into a handful of US tech stocks, AI and data centers. The mood is souring as Trump bristles at the Fed hike and ignores calls for AI safeguards. Iran boils, economies swoon. Everybody complains, yet global capital markets rise and continue to froth. Animal spirits — unbridled and predictably irrational.

Meanwhile, our BSP navigates inflationary pressures while keeping one eye on the peso. The SEC and the PSE have been consistent cheerleaders of capital-market development. But another roadshow, another forum, another panel with the same story may not work.

Enough of the deodorant. The current wave of corruption indictments is becoming more powerful than any investment promotion material. It speaks the only language serious money understands: Rules matter and public thievery must stop being a business model.

The PSE’s LEAP program has been attracting SMEs, but it should be doing more than producing one or two listings a year. Since its fourth-quarter 2020 launch, it was reported that at least 37 potential IPO applicants had taken part, with a handful going IPO. There are listing guidelines for renewable energy listings and even Public-Private Partnerships. Untapped potential. We have to unleash it ourselves in order to entice others.

The Philippines must get its pound of flesh as investors — especially from Europe and the Middle East, literally embattled in their own neighborhoods — look to ASEAN for returns. We have to demonstrate that we are more than demographics and beaches.

No investment brochure can beat the mugshot of a convicted plunderer. More importantly, it demonstrates self-respect.

A good crisis, as the saying goes, should not be wasted. The capital-market community should lead in telling the story of an emerging governance shift. Skepticism’s still thick, but is being challenged. If law enforcement accelerates this momentum, the governance millstone around our economic neck could become a wheel for renewal — a self-fulfilling prophecy, IF we dare nurture our nobler aspirations.

Otherwise, our quixotic investment promoters will have to keep putting lipstick on a pig and pretend the pig enjoys it.