The IPOX® Week, July 18, 2016

  • IPOX Indexes rise with global markets. IPOX 100 U.S. (IPXO) lags during expiration week.
  • Large number of global IPOs price, key deals all get done and debut strongly. Upcoming week means focus on small- and mid-cap IPOs in the U.S.

IPOX Indexes rise with global markets. IPOX 100 U.S. (IPXO) lags during expiration week. The IPOX Indexes surged during U.S. option expiration week, joining the big rally in global equities as interest rates jumped and the S&P 500 (SPX) – key gauge of U.S. stocks –set fresh all-time records. In the U.S., e.g., the IPOX 100 U.S. (IPXO) rose anew, but lagged the market for the first time in three week. Ahead of key earnings, select small-caps fueled upside momentum, including movie theatre operator AMC Entertainment (AMC US: +11.02%), gaining on its bid for Britain’s Odeon & UFI. Arts & Crafts specialty retailer 06/14 IPO Michaels (MIK US: -6.55%) fell sharply after its private equity owners priced a secondary offering. In all, 30/100 firms in the IPOX U.S. 100 (IPXO) fell, with the average equally-weighted index holding rising +1.38% (+1.16%), ahead of the applied market-cap weighted index. Across the IPOX Indexes universe, we note significant upside in 12/14 IPO Chinese online consumer Financial Yirendai (YRD US: +29.01%) and global data solutions provider merger IHS Markit (INFO US: +9.77%).

IPOX 100 U.S. -linked Investing with FPX since April 2006:

Large number of global IPOs price, key deals all get done and debut strongly. Upcoming week means focus on small- and mid-cap IPOs in the U.S. At least 15 significant accessible (non Chinese A-Shares) deals commenced trading last week with the average (median) equally-weighted IPO gaining +22.96% (+8.73%) based on the difference between the final offering price and the week’s close. Most focus was on dual listing of messaging service Korean-run Tokyo/N.Y-traded Line (LN US: +20.74%), which gained strongly after pricing its deal at just 6.5 times 2015 revenues, while the solid debut of USD billion 1.9 sandwich maker AdvancePierre Foods (APFH US: +14.29%) helped to build momentum for U.S. domiciled deals. Respective IPOs in Australasia, including the slew of China-linked listings, also debuted with notable initial gains. Focus during the upcoming week is on a slew of small/mid-caps set to go public in the U.S., including specialty pharma stock Dutch domiciled Patheon (PTHN US), wind blade maker TPI Composites (TPIC US) or Impinj (PI US), Seattle/WA-based maker of radio-frequency identification solutions.

IPOX Returns (%) (P) Week 2015 YTD 16
Exposure: Global/International (xUS) (USD)
IPOX Global 50 (IPGL50) 2.26 0.99 -5.57
IPOX Intern. (IPXI)* 2.84 -5.85 -7.34
Exposure: United States (USD)
IPOX US Comp. (IPXC) 1.54 -3.90 2.71
IPOX 100 U.S. (IPXO)* 0.98 1.57 2.36
IPOX 30 U.S. (IPXT) 1.52 4.91 2.80
Exposure: Europe (EUR)
IPOX Europe (IXTE) 3.33 14.41 -12.39
IPOX Nordic (IPND) 2.50 23.88 -2.87
Exposure: Asia-Pacific (Developed) (USD)
IPOX Asia-Pacific (IPTA) 1.91 -2.32 0.44
Exposure: China (USD) (x A-Shares)
IPOX China (CNI) 2.14 -9.10 -13.54

*Basis for Exchange-Traded Products (ETPs)

IPOs (week of July 11): Ticker Return (%)
AdvancePierre Foods Holdings APFH US 14.29
China Development Bank 1606 HK -1.00
China Logistics Property 1589 HK 5.85
China Unienergy Group 1573 HK 133.33
Dar Es Salaam Stock Exchange DSE TZ 104.00
GenSight Biologics SA SIGHT FP 3.13
Greentown Service Group 2869 HK 23.12
Hailan Holdings 2278 HK 21.21
Investore Property IPL NZ 8.72
Korea Asset In Trust Co 123890 KS -3.88
LINE Corp LN US 20.74
Plover Bay Technologies 1523 HK -2.00
Scottish Pacific Group SCO AU 4.69
Vincent Medical Holdings 1612 HK 15.00
Yihai International Holding 1579 HK -2.73
IPOs (week of July 18): Ticker Sector
Audentes Therapeutics Inc BOLD US Health Care
Cemex Holdings Philippines CHP PM Materials
Impinj Inc PI US Info Tech
Lida Holdings Ltd/Tw 4552 TT Industrials
Patheon NV PTHN US Health Care
Prosper Construction 6816 HK Financials
TPI Composites Inc TPIC US Industrials

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 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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