The IPOX® Week, August 06, 2018

  • IPOX 100 U.S. (IPXO) rises on strength in beleaguered heavyweights after earnings. Plunge in China-linked growth stocks pressures other IPOX Indexes.
  • IPO Deal-flow Review & Outlook: Initial showing of deals in the U.S. exceeds other Markets anew / World’s largest telecoms tower operator China Tower (788 HK) lined up.

IPOX 100 U.S. (IPXO) rises on strength in beleaguered heavyweights after earnings. Plunge in China-linked growth stocks pressures other IPOX Indexes. Amid strength in some of the beleaguered IPOX heavyweights and big jumps in select small-caps towards the end of the trading week after earnings, the IPOX 100 U.S. reversed more relative and absolute weakness seen early in the week to close the week higher. Most other IPOX Indexes, however, remained under pressure, as select high growth stocks shed big YTD gains after earnings and the exodus of foreign money tracking respective China-linked exposure continued, enforced by disappointments over the stalemate in China/U.S. trade talks. Amongst individual companies in the IPOX 100 U.S. (IPXO), the impact of great earnings by select lesser-weighted exposure including payment processor Paycom Software (PAYC US: +22.97%), restaurant chain Wingstop (WING US: +15.87%) or online car selling platform operator Cargurus (CARG US: +8.36%) alongside a good performance in core holdings IPOX heavyweights Spin-offs IL-based consumer staple Kraft Heinz (KHC US: +7.00%) and drug maker AbbVie (ABBV US: +6.59%) more than mitigated big earnings/corporate action-driven declines in home products store operator Floor and Decor (FND US: -21.02%) or food products wholesaler US Foods (USFD US: -18.55%). Both H.K. and U.S.-traded China-linked firms ranked at the bottom of the IPOX Universe tracking non-U.S. domiciled firms, including telecom carrier GDS (GDS US: -23.73%) or the slew of China-linked health care/biotech stocks thus far seemingly insulated from the broad China-linked weakness including Genscript Biotech (1548 HK: -18.92%) or Wuxi Biologics (2269 HK: -13.75%).

IPOX-linked Investment Products Performance Update: Last week, the USD billion 1.2 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) rose to +6.19% YTD, while its international version (FPXI) rose to -0.67% YTD. Amongst IPOX-linked actively managed funds, the Catalyst IPOX® Allocation Fund (OIPAX) closed +8.47% YTD higher.

IPOX® 100 U.S. – Investing with the “FPX” ETF since 2006

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD) (Price)
IPOX Global (IPGL50) -2.52 28.59 0.54
IPOX International (IPXI)* -3.57 37.80 -2.87
Exposure: United States (USD) (Price)
IPOX Composite U.S. (IPXC)* -0.32 33.64 7.35
IPOX 100 U.S. (IPXO)* 0.45 26.04 5.95
IPOX 30 U.S. (IPXT) 0.59 26.63 3.15
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe (IXTE) -2.02 19.27 3.65
IPOX Nordic (IPND) -1.69 17.91 2.86
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) -1.89 23.30 0.37
IPOX China (CNI) -7.36 37.67 -2.11
IPOX Japan (IPJP) -2.33 N/A N/A

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME listed e-mini IPOX® 100 U.S. Index Futures [Symbol: IPOU8].

IPO Deal-flow Review & Outlook: Initial showing of deals in the U.S. exceeds other Markets anew / World’s largest telecoms tower operator China Tower (788 HK) lined up for H.K. trading debut. At least 10 (non-China A shares and non-local India) firms debuted last week across accessible global regions, with the average (median) equally-weighted firm adding just +3.71% (+0.05%) based on the difference between the final offering price and Friday’s close. Underlying the potency of U.S. equity capital markets, best initial deal performance based on final offer remained with firms listed on the exchanges in the U.S.: Priced at midpoint of its expected range, e.g., commercial real estate giant Cushman & Wakefield (CWK US: +9.12%) rose on debut while smart speaker maker Sonos (SONO US: +39.67%) – priced below range – surged and ranked the best performing IPO based on final offer. In H.K., biotech Ascletis Pharma (1672 HK: -28.43%) fell sharply, pressured by China’s recent medical scandals and big declines in some of the aforementioned incumbents. Focus this week is on the H.K. IPO of the world’s largest telecommunications tower operator, China Tower (788 HK): Priced at the bottom of its indicative range, the firm raised USD billion 6.92 billion, still ranking it as the world’s largest IPO in two years. Deals in the U.S. include regional airline operator Mesa Air (MESA US) and Rochester/NY-based disease drug maker Vaccinex (VCNX US).

Select IPOs traded (week: 07/23/2018) Domicile
Arlo Technologies Inc. United States
Ascletis Pharma Inc. China
Bojun Education Co Ltd China
Cushman & Wakefield PLC United States
Grit Real Estate Income Group Mauritius
Hope Education Group Co Ltd China
Sonos Inc. United States
Thespac SpA Italy
Tway Air Co Ltd South Korea
Select IPOs expected (week: 07/30/2018) Domicile
BeiGene Ltd China
China Tower Corp Ltd China
Digital Imaging Technology Co South Korea
Mesa Air Group Inc. United States
Vaccinex Inc. United States

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