IPOX Indexes trade mixed last week. The IPOX Indexes traded mixed across global regions last week. While the IPOX Europe Indexes (IXTE, IPND) followed European markets higher, US (IPXO, IPXT) and Asia-Pacific (IPTA) fell as U.S. small-caps lagged (RUT: -1.10%), China continued to trade under pressure (CNI: -3.24%) and the Apple (AAPL US: -2.37%)-heavy Nasdaq 100 (NDX US: -0.08%) failed to inspire, despite amazing Amazon (AMZN US: +5.20%). Earnings continued to drive the week’s best and worst performers amongst the IPOX Regional Portfolios: In the IPOX 100 US (IPXO), e.g., stand-outs included USD billion 5.2 07/2015 IPO Blue Buffalo Pet Products (BUFF US: +13.60%) – beating expectations for the second time in a row – or refiner USD billion 2.6 Murphy USA (MUSA US: +11.63%). IPOX-holdings with part-time CEO /chair remained amongst the worst performers, with alternative energy play Solarcity (SCTY US: -10.26%) and payment processor Square (SQ US: -8.41%) leading the way. Upside focus amongst European/Nordic exposure was on German auto parts maker Schaeffler (SHA GY: +10.29%) after good earnings and MSCI-Indexes inclusion. Fresh weekly post- IPO highs in IPOX Nordic (IPND) heavyweight USD billion 2.2 Lifco (LIFCOB SS: +7.68%) and IPOX Asia-Pacific (IPTA)-tracked Cyberdyine (7779 JP: +3.82%) underlines the big momentum/takeover interest for select global medical equipment makers. We note big gains in ever-volatile Japanese/Korean online games maker Tokyo-traded Nexon (3659 JP: +16.35%) after strong earnings.
IPO window open as specialty IPOs soar. Despite the mixed performance in equities, a significant number of deals commended trading last week (10), with the average (median) equally-weighted IPO rising +11.05% (+5.58%) based on the difference between the week’s close and the final offering price. Larger sized US and European deals ranked amongst the best performers, with USD billion 1.1 communications equipment maker Acacia Communications (ACIA US: +32.74%) and USD billion 1.1 landscape products distributor SiteOne Landscape Supply (SITE US: +33.00%) leading the way. Royston/UK-based chocolate manufacturer USD million Hotel Chocolat (HOTC LN: +40.20%) – which paid its original bondholders interest in chocolate – surged during its first week of trading on London’s Alternative Investment Markets (AIM).
|IPOX Returns (%) (P)||Week||2015||YTD 16|
|Exposure: Global/International (xUS) (USD)|
|IPOX Global 50 (IPGL50)||-1.13||0.99||-5.48|
|IPOX Intern. (IPXI)*||-1.45||-5.85||-6.09|
|Exposure: United States (USD)|
|IPOX US Comp. (IPXC)||-0.98||-3.90||-2.52|
|IPOX 100 U.S. (IPXO)*||-0.46||1.57||-1.65|
|IPOX 30 U.S. (IPXT)||-0.82||4.91||-0.97|
|Exposure: Europe (EUR)|
|IPOX Europe (IXTE)||1.27||14.41||-7.97|
|IPOX Nordic (IPND)||0.54||23.88||-4.01|
|Exposure: Asia-Pacific (Developed) (USD)|
|IPOX Asia-Pacific (IPTA)||-0.49||-2.32||0.16|
|Exposure: China (USD) (x A-Shares)|
|IPOX China (CNI)||-3.24||-9.10||-14.73|
*Basis for Exchange-Traded Products (ETPs)
Significant deal flow lined up, filing update. May/June is expected to add a significant number of attractive global IPOs: We note last week’s start of the road show for the US IPO of consumer staple P/E backed food services provider USFoods, while retailer Albertsons also updated its IPOs filing. In Europe, focus is on the large-scale IPO of Dong Energy A/S, the Danish utility and the world’s largest offshore wind energy operator, set to take place on the Copenhagen Stock Exchange. We note the currently unusually large initial valuation range for the privatization IPO. Amid big demand for global REIT IPOs, focus during the week of May 16 is on Manulife US Real Estate (MUST SP) in Singapore, which priced its USD million 470 IPO at the top of the range, while deal flow in the US centers around a number of high risk/high returns deals in biotech, including PhaseRx (PXRS US), Moleculin Biotech (MBRX US), Menus (MBRU US) and Cancer Prevention Pharma (CPP US).
|IPOs (week of May 9):||Ticker||Return (%)|
|Acacia Communications Inc||ACIA US||32.74|
|Asit Biotech SA||ASIT BB||-5.71|
|Buima Group Inc||5543 TT||19.32|
|Hotel Chocolat Group Ltd||HOTC LN||40.20|
|Motorpoint Group PLC||MOTR LN||8.25|
|Oncobiologics Inc||ONSIU US||-20.50|
|SIF Holding NV||SIFG NA||1.04|
|SiteOne Landscape Supply Inc||SITE US||33.00|
|Turning Point Brands Inc||TPB US||2.90|
|Wilson Therapeutics AB||WTX SS||-0.41|
|IPOs (week of May 16 ):||Ticker||Sector|
|Cancer Prevention Pharma||CPP US||Health Care|
|Manulife US Real Estate||MUST SP||Financials|
|Merus BV||MRUS US||Health Care|
|Moleculin Biotech Inc||MBRX US||Health Care|
|PhaseRx Inc||PZRX US||Health Care|
Josef Schuster is the founder of IPOX Schuster LLC (www.ipoxschuster.com), a Chicago-based Financial Services company specialized in Financial Products Design related to Initial Public Offerings and corporate Spin-offs. He is the chief architect of the IPOX Indexes, a global index group initiated in 2004 that encompasses an index technology allowing for asset-allocation focused exposure to the “going public” effect associated with global IPOs and Spin-offs. Mr. Schuster earned his Bachelor of Arts degree in Business Administration in 1994 from the European Business School, London. Mr. Schuster was also awarded a MSc in Accounting and Finance in August 1996 and a MPhil / PhD in Accounting and Finance in June 2003 from the London School of Economics.
ABOUT THE IPOX INDEXES: Through the range of the IPOX Indexes, market participants have an innovative opportunity to navigate the global IPO and Spin-off market and to track the performance of this economically significant sector more accurately and comprehensively than with any other index group. The IPOX Indexes accomplish the systematic indexation of the aftermarket performance of the IPO and Spin-off sector, while – at the same time – preserving the benefits of diversification. Linked to the IPOX 100 U.S. Index, for example, IPOX-linked investment products available to investors include the pioneering USD million 600, 5-star First Trust U.S. IPO ETF (ticker: FPX). On February 18, 2016, CME Group, the world’s largest exchange operator, launched e-mini IPOX 100 U.S. Index Futures, offering market participants for the first time a tool to manage the aggregate risk associated with U.S. IPOs and Spin-offs.
Disclosure: the author has no position in the stocks mentioned.
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