The IPOX® Week, June 04, 2018

  • IPOX 100 U.S. (IPXO) records strong weekly gain / IPOX China (CNI), IPOX Nordic (IPND) close week near multi-year highs.
  • IPO Deal-flow Review & Outlook: Raksul (4384 JP) cheers aftermarket investors / Deal flow pipeline light.

IPOX 100 U.S. (IPXO) records strong weekly gain / IPOX China (CNI), IPOX Nordic (IPND) close week near multi-year highs. Strong U.S. employment data propelled select IPOX Indexes towards the week-end, with the IPOX 100 U.S. (IPXO) capping the volatile trading week with a gain, adding +0.84% to +4.26% YTD, +35 bps. more than when compared to benchmark S&P 500 (SPX) – gauge for U.S. stocks – on the week. Big gains in select small- and mid-cap specialty exposure, however, including measurement instrument maker Keysight Technologies (KEYS US: +12.21%) or retailer Burlington Stores (BURL US: +10.22%) were again partially offset by weakness in select IPOX heavyweights including IT Services provider DXC Technology (DXC US: -11.47%) or drug maker AbbVie (ABBV US: -3.00%). Despite continued gyrations in individual portfolio holdings, the IPOX Indexes focusing on exposure domiciled in countries outside the U.S. performed notably well last week. Here, we note big relative strength in the sector-agnostic IPOX Nordic (IPND), as well as the IPOX China (CNI), with the IPOX Portfolios extending the relative Year/Year lead vs. the respective markets to a massive +1399 bps. (IPND) and +2490 bps (CNI) last week, and closing in on multi-year highs, respectively. Individual portfolio holdings with upside focus abroad included Sydney-traded flow & control products maker Reliance Worldwide (RWC AU: +23.03%) or biotech Wuxi Biologics (2269 HK: +9.55%), while high-end fashion maker Michael Kors (KORS US: -12.82%) and select Brazil-focused exposure fell sharply.

IPOX-linked Investment Products Update: The USD billion 1.1 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) added +0.88% to +4.48% YTD last week, while the IPOX International (IPXI)-linked First Trust International IPO ETF (FPXI) fell to +3.00% YTD. Amid its upcoming 3rd year trading anniversary, we note a fresh YTD-High in the IPOX-linked Catalyst IPOX® Allocation Fund (OIPAX: +1.51% to +7.59% YTD), an actively managed Mutual Fund.

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

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD) (Price)
IPOX Global (IPGL50) -0.32 28.59 2.09
IPOX International (IPXI)* -0.61 37.80 1.94
Exposure: United States (USD) (Price)
IPOX Composite U.S. (IPXC)* 1.32 33.64 7.65
IPOX 100 U.S. (IPXO)* 0.84 26.04 4.26
IPOX 30 U.S. (IPXT) 0.37 26.63 0.86
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe (IXTE) -1.08 19.27 2.56
IPOX Nordic (IPND) -1.03 17.91 2.50
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) -0.95 23.30 2.43
IPOX China (CNI) 1.41 37.67 16.63

* 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: IPOM8].

IPO Deal-flow Review & Outlook: Raksul (4384 JP) cheers aftermarket investors / Deal flow pipeline light. At least 8 notable (non-China A shares and non-local India) companies debuted last week, with the average (median) equally-weighted firm adding a strong +24.74% (+24.43%) based on the difference between the final offering price and Friday’s close. With no IPOs coming to market in the U.S. during in the shortened trading week, focus was on Tokyo-traded “Uber for Printing” Raksul (4383 JP: +48.13%). The stock performed a phenomenal two-day trading spurt after the company had commenced trading on Thursday at just +11.33% above final offer, indicating heavy positioning by non-syndicate participating aftermarket investors. Other deals in focus included Seoul-traded Korean medical equipment manufacturer Sejong Medical (258830 KS: +92.00%) – the week’s best performing global IPO based on final offer last week – or British video games maker Codemasters Group (CDM LN: +32.50%). Focus this week is on two deals in Europe, as well as on deals in Emerging Asia-Pacific, where Vietnam Techcombank (TCB VN), Vietnams largest private sector lender, is set to launch the second largest listing in Vietnam history.

Select IPOs traded (week: 05/28/2018) Country
Asuransi Tugu Pratama Indonesia Tbk PT Indonesia
China 21st Century Education Group Ltd China
Sejong Medical Co Ltd South Korea
Voluntis SA France
LH GROUP LTD Hong Kong
Raksul Inc Japan
STS Group AG Germany
Codemasters Group Holdings PLC Britain
Select IPOs expected (week: 06/04/2018) Country
MeiraGTx Holdings plc Britain
MNC Studios International Tbk Indonesia
NCAB Group AB Sweden
Prospa Group Ltd Australia
Vietnam Techcombank Vietnam

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.

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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