The IPOX® Week, January 28, 2019

  • FANG-free diversified IPOX 100 U.S. (IPXO) records strong weekly gain, while S&P 500 (SPX) falls. IPOX heavyweight Paypal (PYPL US) hits all-time high.
  • Amid surging China-linked exposure, big strength extends to other IPOX Indexes.
  • Big week for IPOX 100 U.S. (IPXO) earnings.
  • IPO Deal-flow Review & Outlook: Little deal flow lined up as SEC set to re-open, Chinese New Year.

FANG-free diversified IPOX 100 U.S. (IPXO) records strong weekly gain, while S&P 500 (SPX) falls. IPOX heavyweight Paypal (PYPL US) hits all-time high. Ahead of key earnings, most IPOX Indexes continued to rise ahead of month-end, with the IPOX 100 U.S. (IPXO) unimpressed by temporary selling pressure affecting most U.S. equity indexes and notably trading the week at a negative correlation to the S&P 500 (SPX: -0.22%), benchmark for U.S. stocks. Amid further gains in corporate action linked exposure, big weakness in the red-hot biotechnology sector and a fresh all-time high in IPOX heavyweight payment processor Paypal (PYPL US: +3.47%) or software solutions provider Spin-off Keysight Technologies (KEYS US: +2.14%), e.g., the FANG-free, large-cap centric diversified IPOX 100 U.S. (IPXO) extended the previous week’s gains, adding +0.91% to +11.08% YTD, now a massive +478 bps. YTD ahead of the S&P 500 (SPX: -0.22%), benchmark for U.S. stocks. 58% of portfolio stock rose on the week, with the average (median) equally-weighted IPOX 100 U.S. (IPXO) holding adding +1.02% (+0.32), in line with the applied market-cap weighted index. We note big gains in a diversified list of China-linked large-cap exposure propelling the IPOX Global (IPGL50) and IPOX International (IPXI) to another strong week, including e-commerce platform operator Pinduoduo (PDD US: +18.05%), telecom towers operator China Tower (788 HK: +13.07%) or banking giant Postal Savings Bank of China (1658 HK: +8.11%).

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

IPOX-linked Products Performance Updates: The IPOX 100 U.S. (IPXO)-linked, 5-star (10 years) USD billion 1 First Trust U.S. Equity Opportunities ETF (FPX) added +0.94% to +11.13% YTD, while the IPOX International (IPXI)-linked “FPXI” and IPOX Europe (IPOE)-linked “FPXE” ETFs also rose to +9.47% YTD and +7.78% YTD, respectively. Amongst long-only actively managed IPOX-linked products, the Catalyst IPOX® Allocation Fund (OIPAX) finished the week at +9.28% YTD.

IPOX® Indexes Price Returns (%) (RT) Last Weerk 2018 2019 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 2.17 -11.37 9.54
IPOX® International (IPXI)* (USD) 2.88 -13.41 8.20
IPOX® Indexes: United States
IPOX® Comp. U.S. (IPXC)* 0.01 -7.59 8.76
IPOX® 100 U.S. (IPXO)* 0.91 -8.80 11.08
IPOX® 30 U.S. (IPXT) 0.70 -10.28 10.32
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 1.61 -13.46 8.43
IPOX® 100 Europe (IPOE)* (USD) -0.53 -16.60 6.10
IPOX® Nordic (IPND) (EUR) 1.44 -15.45 7.29
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -0.15 -3.21 2.92
IPOX® China (CNI) (USD) 3.74 -22.83 6.51
IPOX® Japan (IPJP)** (JPY) -0.73 -13.70 5.47

* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOZ8). ** Live since 07/18. Please contact [email protected] for other IPOX® Indexes.

Big week for IPOX 100 U.S. (IPXO) earnings: A 29.61% of IPOX 100 U.S. (IPXO) weight is expected to report earnings this week, promising more gyrations in IPOX 100 U.S. (IPXO) Index spreads. Companies lined up include a number recently consummated IPOX-held IPO/Spin-off M&As and conventional Spin-offs including medial products maker Stryker (SYK US: -1.07% / after close of 01/29), drug maker Shire/Baxalta acquirer Takeda (TAK US: +3.94% / after close of 02/01), candy maker Hershey (HSY US: -3.55% / after close of 01/31) consumer financial Santander Consumer (SC US: +0.63% / after close of 01/30), sports franchise operator Madison Square Garden (MSG US: +1.58% / after close of 01/30) or IPOX heavyweight Spin-off payment processor PayPal (PYPL US: +3.47% / after close of 01/30).

IPO Deal-flow Review & Outlook: Little deal flow lined up as SEC set to re-open, Chinese New Year. Only 2 firms debuted last week across accessible global regions, with the average equally-weighted firm adding a tepid +1.80% based on the difference between the final offering price and Friday’s close. Energy company New Fortress Energy (NFE US) failed to list last week. Amid the re-opening of the SEC, the firm is now expected to go public without SEC’s explicit green light along with cash-hungry biopharma Gossamer Bio (GOSS US) towards mid-February. Though the government is (temporarily) reopened, we expect the extensive backlog to significantly dampen the U.S. IPO market for the first quarter which will delay big-name unicorns to hit the market till Q2 2019. Amid the Chinese New Year, Hong Kong market is also expected to stay quiet for the week while Austria’s biopharma company Marinomed (MARI AV) resumed its IPO process and is expected to debut in Vienna at the end of the week.

Select IPOs expected (week: 01/28/2019) Domicile
Marinomed Biotech AG Austria

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