The IPOX® Week, December 24, 2018

  • IPOX Indexes plunge with Markets. More corporate actions in IPOX Europe (IXTE, IPOE) propel select stocks.
  • IPOX Market Neutral surges to all-time high.
  • IPO Deal-flow Review & Outlook: SoftBank Corp (9434 JP) finishes week below offer, bounces big from early lows. Few deals lined up towards year end.
  • Merry Christmas from the IPOX Team.

IPOX Indexes plunge with Markets. More corporate actions in IPOX Europe (IXTE, IPOE) propel select stocks. On the back of uncertainty over the FED, global trade and U.S. politics, indiscriminate year-end position winding-down, and quarterly U.S. Futures & Option expiration, the IPOX Indexes followed the steep declines in other global equities ahead of the shortened trading week. In the U.S., e.g., the IPOX 100 U.S. (IPXO) – gauge for the performance of U.S. New Listings (IPOs, Spin-offs and IPO M&A) – slumped by -7.98% to -13.21% YTD, better than U.S. Technology stocks (NDX) and U.S. small- and mid-caps (RTY and MID), but lagging the S&P 500 (SPX), benchmark for U.S. large-caps. Here, just 3% of exposure rose, with the average (median) equally-weighted IPOX 100 U.S. Index (IPXO) portfolio holding shedding a massive -938 bps. IPOX Indexes focusing on other global markets recorded declines which were less than in the U.S. market with select exposure performing significantly better than incumbent benchmarks. Across Asia-Pacific, e.g., the IPOX Asia-Pacific (IPTA) extended its YTD performance lead vs. the local benchmark to +1007 bps., while the IPOX International (IPXI) rose to +282 bps. YTD.

In individual stocks, a few bright spots remained: Most notable is another good week for select China-linked IPOX stocks including infrastructure play 8/8/18 IPO China Tower (788 HK: +8.15%), e-commerce firm Uxin (UXIN US: +12.53%) or Hong Kong property developer Jiayuan (2768 HK: +7.10%). We also note big corporate actions in the European food ordering space, benefiting the IPOX Europe (IXTE, IPOE), including Fridays buy-out proposal of 06/17 IPO Germany’s Delivery Hero (DHER GY: -1.61%) by Dutch-based 09/16 IPO Takeaway.com (TKWY NA: +27.86%).

IPOX Market Neutral surges to all-time weekly high. Amid IPOX’s Alternative Strategies offerings, beneficiary of the continued gyrations in global equities continued to be IPOX Market Neutral which provides defined semi-active exposure to spread relationships in liquid global New Listings and trades with a low correlation to other asset classes. Sourced from a basket of 5000 stocks trading in the world’s accessible regions, all live strategy legs surged last week to close at a fresh all-time high, with the IPOX Global MN adding +2.22% to +12.97% YTD, led by IPOX MN Europe, IPOX MN Asia-Pacific and IPOX MN U.S.

Select IPOX-linked (long-only) investment products performance: Amid the substantial declines in global equities, the IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) fell to -12.85% YTD last week, while the IPOX International (IPXI)-linked “FPXI” ETF fell to -14.64% YTD. Amongst the range of actively managed IPOX-linked long-only products, the Catalyst IPOX® Allocation Fund (OIPAX) is now -11.00% lower YTD.

Select IPOX® Indexes Returns (%) Last Week 2017 2018 YTD
IPOX® Long-Only: Global/International
IPOX® Global (IPGL50) (USD) -5.61 28.59 -14.31
IPOX® International (IPXI)* (USD) -2.96 37.80 -14.43
IPOX® Long-Only: United States
IPOX® Composite U.S. (IPXC)* -7.74 33.64 -11.72
IPOX® 100 U.S. (IPXO)* -7.98 26.04 -13.21
IPOX® 30 U.S. (IPXT) -7.33 26.63 -13.83
IPOX® Long-Only: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -2.60 19.27 -14.08
IPOX® Nordic (IPND) (EUR) -4.21 17.91 -16.66
IPOX® 100 Europe (IPOE)* (USD) -2.29 41.77 -17.86
IPOX® Long-Only: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -3.07 23.30 -5.45
IPOX® China (CNI) (USD) -6.52 37.67 -23.32
IPOX® Japan (IPJP) (JPY) -6.40 N/A N/A
IPOX® Market Neutral (Long-Short)
Beta Neutral Strategy: Yes Week
IPOX® Market Neutral Asia-Pacific** X 2.33 12.25
IPOX® Market Neutral Europe** X 2.30 21.51
IPOX® Market Neutral U.S.** X 2.12 10.51
IPOX® Market Neutral Global** X 2.22 12.97

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures [Symbol: IPOZ8]. ** Live since 03/18.

IPO Deal-flow Review & Outlook: SoftBank Corp (9434 JP) finishes week below offer, bounces big from early lows. Few deals lined up towards year end. 13 firms debuted last week across accessible global regions, with the average (median) equally-weighted frim losing -1.27% (0.00%) based on the difference between the final offering price and Friday’s close. SoftBank’s telecom unit (9434 JP: -12.27%) carried out its fixed price mega-listing with robust demand yet, finished the week with disappointing result, however, significantly above the 2nd day listings lows. Recent market turmoil and adverse company specific news weighted on the IPO including a nationwide mobile service outage just weeks ahead of the listing, its relationship with Chinese telecom equipment company Huawei, and SBI’s error during the IPO shares allocation process. The $23.5 billion IPO made SoftBank Corp the largest IPO in Japan’s history and the 2nd biggest global offering ever. Global IPO activity is set to seasonally slow down in the U.S. and Europe over the new few weeks, while the Hong Kong is about to embrace three more new listings for the week, including another Chinese biotech startup unicorn Shanghai Junshi Biosciences (1877 HK). This follows on strong sentiment for respective listings, including IPOX International holdings Wuxi Biologics (2269 HK: +16.7% YTD) and 10/18 IPO Innovent Biologics (1801 HK: +26.21% since first close).

Select IPOs traded (week: 12/17/2018) Domicile
Softbank Corp Japan
Select IPOs expected (week: 12/24/2018) Domicile
Shanghai Junshi Biosciences Co Ltd China

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 provided by any of the above service providers and any service used to execute any trading strategies are solely based on the independent analysis of the user.

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