The IPOX® Week, February 05, 2018

  • After the big run-up, IPOX Indexes suffer broad based profit taking as yields rise; Market catches up with weak U.S. small- and mid-caps.
  • IPO Deal-flow Review & Outlook: Mixed initial showing of deals, positive momentum set to extend into first full week of February trading.

After the big run-up, IPOX Indexes suffer broad based profit taking as yields rise; Market catches up with weak U.S. small- and mid-caps. The IPOX Indexes fell sharply last week on profit taking after the big run-up, as strong economic numbers triggered a further rise in yields and U.S. large-caps finally caught up with the relative weakness in U.S. small- and mid-caps. Declines within the IPOX Indexes Universe were broad-based with the IPOX Global 50 (IPGL50) shedding -4.02% to +6.34% YTD, lagging the global market by -56 bps. on the week. Amid the broad weakness across sectors, the IPOX Regional Portfolios recorded notable positive moves amongst individual portfolio holdings, including Finish telecom services provider DNA (DNA FH: +13.28%), 12/2017 IPO Japan-traded courier service SG Holdings (9143 JP: +9.09%), US social networker Twitter (TWTR US: +6.80%) or Italian sports car maker Ferrari (RACE US: +5.99%).

IPOX® 100 U.S. Investing with the 5-star “FPX” ETF since 2006

IPOX-linked ETFs mirrored the weakness in the underlying Indexes. For example, the NYSE-listed USD billion 1.05 First Trust U.S. Equity Opportunities ETF (FPX) – which tracks the IPOX® 100 U.S. (IPXO) – sank to +4.24% YTD, while the NASDAQ-listed First Trust International IPO ETF (FPXI) – which tracks the IPOX® International (IPXI) – declined to +8.19% YTD.

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -4.02 28.59 6.34
IPOX International (IPXI)* -2.91 37.80 8.43
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* -5.49 33.64 4.78
IPOX 100 U.S. (IPXO)* -4.63 26.04 4.26
IPOX 30 U.S. (IPXT) -4.99 26.63 4.76
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) -1.49 19.27 2.62
IPOX Nordic (IPND) -0.90 17.91 0.55
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) -1.32 23.30 6.72
IPOX China C. (IPXUCHCHP)* -5.14 42.57 7.84
IPOX China (CNI) -5.45 37.67 10.51

* 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: IPOH8].

IPO Deal-flow Review & Outlook: Mixed initial showing of deals, positive momentum set to extend into first full week of February trading. At least 7 notable (non-China A shares and non-local India) firms commenced trading last week with the average (median) equally-weighted firm adding +4.19% (+5.05%) based on the difference between the final offering price and Friday’s close. Upside focus was on Credit Suisse-led oil field services provider FTS International (FTSI US: +14.50%) and downsized, and below range offered Argentina Power generation company Central Puerto (CEPU US +7.94%), while Private Equity-backed travel concessions operators UK-domiciled Hudson (HUD US: -5.26%) and Luxembourg-based Corp America Airports (CAAP US: -2.35%) finished the first week of trading below final offer. The global IPO market is set to continue its positive momentum into the first full week of trading in February: Deals in focus this week include Spanish real estate developer Metrovacesa (MVC SM), one of the world’s largest quick service restaurants operators – Turkish leading electricity company TFI TAB (TFIG US), German energy giant E.ON affiliated Enerjisa Enerji (ENJSA TI), and Chinese smartphone maker Xiaomi’s strategic partner, smart wearable tech-device company Huami (HMI US).

Select IPOs traded (week: 01/29/2018) Country
Central Puerto S.A. Argentina
Corporación América Airports S.A. Luxembourg
FTS International Inc U.S.A.
Hudson Ltd U.S.A.
Sol-Gel Technologies Ltd Israel
Salmones Camanchaca S.A. Chile
VICI Properties Inc U.S.A.
Select IPOs expected (week: 02/05/2018) Country
 A-Living Service Co Ltd.  China
 Bioceres S.A.  Argentina
 Blau Farmacêutica SA  Brazil
 Cactus Inc. U.S.A.
 Cardlytics Inc.  U.S.A.
 CRE Logistics REIT Inc.  Japan
 Dermapharm Holding SE  Germany
 Enerjisa Enerji A.S.  Turkey
Huami Corp. China
IPSCO Tubular Inc. U.S.A.
Metrovacesa S.A. Spain
Pinnacle Renewable Holdings Inc. Canada
Power Generation Corp 3 Co Ltd Vietnam
Quintana Energy Services Inc. U.S.A.
TFI TAB Gıda Yatırımlarındx A.Ş. Turkey

Josef Schuster is the founder of IPOX Schuster LLC (, 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.

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are 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 or contracts. 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. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

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