The IPOX® Week, December 12, 2016

  • Ahead of expiration, IPOX Indexes surge. IPOX U.S. Indexes (IPXC, IPXO, IPXT) at historical record.
  • Forbes features IPOX.
  • Global IPO window wide open. Weekly IPO focus on tech firms Trivago (TRVG US) and Meitu (1357 HK).

Ahead of expiration, IPOX Indexes surge. IPOX U.S. Indexes (IPXC, IPXO, IPXT) at historical record. Ahead of U.S. Futures and Options expiration, the IPOX Indexes surged, benefiting from the big asset allocation driven buying in the global benchmarks ahead of the Fed rate hike. Most upside focus was on the IPOX Indexes focusing on Developed Markets exposure with the IPOX Europe (IXTE) surpassing markets and the IPOX U.S. Indexes (IPXT, IPXO) reaching historic highs. Positively perceived corporate actions drove select IPOX holdings to big gains, including cable service provider Altice (ATC NA: +14.89%, IPO of U.S. business following Donald Trump’s election victory), embattled cruise line operator Norwegian Cruise Lines (NCLH US: +13.29%, approval to start Cuba cruises), web platform operator 03/2015 IPO GoDaddy (GDDY US: +10.30%, acquisition of Host Europe Group). Amid a volatile week for U.S. healthcare, related IPOX heavyweights IL-based drug maker Abbvie (ABBV US: +3.55%) and Shire (SHRD US: -4.48%) traded mixed.

IPOX Returns (%) (P) Week Q3 16 YTD 16
Exposure: Global/International (xUS) (USD)
IPOX Global 50 (IPGL50) 2.51 8.91 -0.85
IPOX Global 30 (IPGL30) 2.75 9.85 3.04
IPOX Intern. (IPXI)* 2.06 11.01 -2.40
Exposure: United States
IPOX Composite U.S. (IPXC)* 3.28 11.33 9.47
IPOX 100 U.S. (IPXO)* 3.25 7.16 6.66
IPOX 30 U.S. (IPXT) 3.30 8.41 8.80
Exposure: Europe/Nordic Region
IPOX Europe (IXTE) 4.78 12.02 -2.32
IPOX Nordic (IPND) 2.09 7.45 -4.66
Exposure: Asia-Pacific/China Region
IPOX Asia-Pacific (IPTA) 0.83 5.28 1.15
IPOX China C. (IPXUCHCHP)* 0.59 16.94 0.23
IPOX China (CNI) -0.54 11.59 -5.82

* Basis for Exchange-Traded Products (e.g. FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT) and CME Futures (e-mini IPOX 100 U.S. Index Futures [IPOZ6]).

Forbes features IPOX: We note the feature of IPOX founder Josef Schuster in Forbes by Prof. Jay Ritter, Forbes Contributor and eminent scholar at the University of Florida:

http://www.forbes.com/sites/jayritter/2016/12/05/investing-in-recent-ipos-with-etfs/#7bfdbec67ce7

The respective IPOX 100 U.S. Index (IPXO) – underlying for the USD million 620 First Trust U.S. IPO ETF (FPX US, FPX LN) – closed the week +3.25% higher, outpacing the S&P 500 Index (SPX), main gauge for U.S. stocks. Ahead of Friday’s quarterly re-balancing event, 73/99 stocks in the IPOX 100 U.S. Index (IPXO) closed higher, with the average (median) equally-weighted holding gaining +3.32% (+3.63%), in line with the applied market-cap weighted index.

Traded IPOs (week of 12/06/2016) Country
 Athene Holding Ltd  Bermuda
 ByggPartner I Dalarna Holding AB  Sweden
 Creo Medical Group plc  Britain
 CSC Financial Co Ltd  China
 Entrust Inc  Japan
 Gudou Holdings Ltd  China
 Ichor Holdings Ltd  United States
 Polar Power Inc  United States
 Progressive Path Group Holdings Ltd  Hong Kong
 Skeljungur HF  Iceland
 Smart Eye AB  Sweden
 Varia US Properties Aktiengesellschaft  Switzerland
Upcoming IPOs (week of 12/12/2016) Country
 The Agricultural Development Bank Ltd  Ghana
 Aino Health AB  Sweden
 Anacle Systems Pte Ltd  Singapore
 Hanbo Enterprises Holdings Ltd  Hong Kong
 KNK Holdings Ltd  Hong Kong
 Matching Service Japan Co Ltd  Japan
 Megalogic Technology Holdings Ltd  Hong Kong
 Mirai Corp  Japan
 Nanfang Communication Holdings Ltd  China
 Sanmenxia Tianyuan Aluminum Co Ltd  China
 Shakeys Pizza Asia Ventures Inc  Philippines
 TiGenix NV  Belgium
 travel BV (Trivago)  Germany
 WildHorse Resource Development Corp  United States

Global IPO window wide open. Weekly IPO focus on tech firms Trivago (TRVG US) and Meitu (1357 HK): At least 12 notable IPOs commenced trading last week, with the average (median) equally-weighted deal closing the week +11.85% (+9.34%) above offer. U.S focus was on Bermuda-domiciled Financial P/E-backed USD billion 8.3 Athene Holdings (ATH US: +10.13%), third largest U.S. deal YTD. Amid continued weakness in NY/Tokyo-traded app maker 07/2016 IPO Line (LN US: -6.20%), we note the H.K. IPO of Chinese app maker Meitu (1357 HK), which raised USD million 629 at the low end of the range. U.S. focus is on the IPO of German-domiciled, Nasdaq listed online travel website operator Travel (TRVG US), operator of popular trivago.com. Another significant U.S. deal involves the USD million 578 IPO of oil & gas explorer WildHorse Resource Development (WRD US).

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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