For a second week in a row, IPOX Indexes trade mixed; IPOX International (IPXI) closes at historic weekly high. Amid more earnings and a good U.S. employment report, the IPOX Indexes continued to trade mixed. Within the IPOX Indexes Universe, e.g., while the IPOX U.S. Indexes (IPXO, IPXT) followed weak U.S. small- and mid-caps lower, the IPOX International (IPXI) gained anew, closing out the Friday at yet another historic weekly high. Amid earnings season, the distribution of individual securities’ returns within the respective IPOX Indexes continued to gyrate: In the IPOX U.S. (IPXO, IPXT), e.g., a big week for communications equipment maker Arista Networks (ANET US: +14.39%), online restaurant delivery marketplace Chicago-based Grubhub (GRUB US: +12.82%) or termite and pest control outsourcing firm ServiceMaster Global (SERV US: +10.42%) was more than offset by a big slump in REIT Uniti Group (UNIT US: -16.83%), communications equipment maker Commscope (COMM US: -11.72%) or specialty chemicals maker Axalta (AXTA US: -11.69%), while heavyweight drug maker Shire (SHPG US: -9.54%) continued to trade under pressure. In the IPOX International (IPXI), however – ahead of another big week for earnings with firms such as Chinese e-commerce behemoth Alibaba (BABA US: -2.68%) or logistics firm JD.com (JD US: +2.61%) lined up – strong gains in China-domiciled property developer Cheung Kong Property (1113 HK: +7.96%), French asset manager Amundi (AMUN FP: +6.93%) or German utility EON Spin-off Uniper (UN01 GY: +6.91%) more than offset big declines in travel website operator Trivago (TRVG US: -23.33%), British surgical equipment maker Convatec (CTEC LN: -8.43%) or Israel-based website developer Wix.com (WIX US: -5.71%). In Europe, spreads continued to move in favor of the IPOX Europe (IXTE), now a massive +1535 bps. ahead of the European market YTD.
IPOX only significant index group that tracks SNAP. Amid last week’s decision – including by key index provider S&P Dow Jones Indices – to exclude shares of firms offering no voting power to shareholders from consideration for benchmark inclusion, we note that IPOX is now the only significant index group which allows investors to track the firm within the context of a broadly diversified portfolio.
|IPOX Price Returns (%)||Last Week||Q2 2017||YTD 2017|
|Exposure: Global/International (xUS) (USD)|
|IPOX Global (IPGL50)||0.46||5.54||19.26|
|IPOX Global (IPGL30)||0.40||8.07||20.30|
|IPOX International (IPXI)*||1.03||9.24||29.94|
|Exposure: United States (USD)|
|IPOX Composite U.S. (IPXC)*||-1.00||7.44||20.82|
|IPOX 100 U.S. (IPXO)*||-0.63||3.86||11.68|
|IPOX 30 U.S. (IPXT)||-0.18||4.62||12.93|
|Exposure: Europe/Nordic Region (EUR)|
|IPOX Europe (IXTE)||1.49||4.95||19.04|
|IPOX Nordic (IPND)||0.74||8.64||16.54|
|Exposure: Asia-Pacific/China Region (USD)|
|IPOX Asia-Pacific (IPTA)||0.91||2.99||14.48|
|IPOX China C. (IPXUCHCHP)*||-0.24||10.06||29.84|
|IPOX China (CNI)||0.69||4.62||24.36|
* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT) and CME Futures (e-mini IPOX 100 U.S. Index Futures [commodity trading symbol: IPOU7]).
IPOX-linked ETF update: “FPXI” ETF extends gain. Last week, the IPOX-linked USD million 850 First Trust US. Equity Opportunities ETF (FPX) fell to +12.32% YTD, while the First Trust International IPO ETF (FPXI) added +1.67% to +32.30% YTD. The NASDAQ-traded “FPXI” ETF captures the largest, most liquid and best performing New Listings (IPOs and Spin-offs) domiciled outside the U.S. and trading on a global stock market by applying the IPOX® Indexes Technology.
Global Deal-flow Review and Outlook: Solid initial showing of deals, holiday-driven IPO market. 5 notable accessible global (non-China A shares) firms debuted last week, with the average (median) equally-weighted stock gaining by +5.57% (+5.36%) based on the difference between the final offering price and the Friday’s close. While we note encouraging signs for a revival of the Brazilian IPO market underlined by gains in Financial IRB Brasil Resegguros (IRBR3 BZ: +5.36%) and energy firm Omega Geracao (OMGE3 BZ: +11.99%), the IPO of U.S.-traded specialty chemicals maker Venator Materials (VNTR US: +3.15%) finished just slightly higher, after having priced at the bottom of the USD 20-22 range. Amid the holiday-driven market, only few IPOs are lined up: In the U.S., e.g., these include miner Contura Energy (CTRA US) or the ADR listing of Denmark-domiciled drug maker Zealand Pharma (ZEAL US), while in London, the IPO of industrial Strix (KETL LN) is set to commence trading.
|Traded IPOs (week of July 31, 2017)||Country|
|Bank of Princeton/The||United States|
|Clementia Pharmaceuticals Inc||Canada|
|IRB Brasil Resseguros S/A||Brazil|
|Omega Geracao SA||Brazil|
|Venator Materials PLC||United States|
|Upcoming IPOs (week of August 7, 2017)||Country|
|BGMC International Ltd.||Hong Kong|
|Contura Energy Inc.||United States|
|Golden Faith Group Holdings Ltd.||Hong Kong|
|Strix Group Plc||Great Britain|
|Triple Point Social Housing REIT Plc||Great Britain|
|Zealand Pharma A/S||Denmark|
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.
Lime Brokerage LLC is not affiliated with these service providers. Data, information, and material (“content”) is provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lime Brokerage LLC does not endorse, offer or recommend any of the services nor information provided by any of the above service providers and any service or information used to execute any trading strategies are solely based on the independent analysis of the user.