The IPOX® Week, June 06, 2016
June 13, 2016- IPOX U.S. Indexes rise for second week, beat market.
- Amid strong deal flow, IPOX European Indexes (IXTE, IPND) record strong relative gains.
- IPO deal flow momentum extends for another week.
IPOX U.S. Indexes rise for second week, beat market. A rise in risk on big currency woes amid weak U.S. employment data did little to stop the positive momentum in the IPOX U.S. Indexes last week, with the IPOX 100 U.S. (IPXO) – benchmark for the 5-star USD million 593 First Trust U.S. IPO ETF (FPX). – rising +0.60% to +1.65% YTD, its second week of performing significantly better than the S&P 500 (SPX), the most significant gauge for U.S. stocks. REITs and big pharma led the way, with IL-based drug maker Abbvie (ABBV US: +3.65%) and recently added REITs MGM Growth (MGP US: +5.30%), Communications S&L (CSAL US: +4.50%) or Spirit Realty (SPR US: +3.77%) in focus. 60/100 portfolio members rose, with the average (median) equally-weighted holding gaining +0.68% (+0.65%), in line with the applied market-cap weighting index.
IPOX-linked First Trust U.S. IPO ETF (FPX) since 2006:
Amid big deal flow, IPOX European Indexes (IXTE, IPND) record strong relative gains. Ahead of a slew of offering in the UK, Continental Europe and the Nordic region, we note strong relative performance in Europe, with the IPOX European Indexes (IXTE, IPND) extending the Y/Y performance differential vs. the European market to +400 bps. (IXTE) and a massive +1604 bps. (IPND), respectively.
| IPOX Returns (%) (P) | Week | 2015 | YTD 16 |
| Exposure: Global/International (xUS) (USD) | |||
| IPOX Global 50 (IPGL50) | 0.68 | 0.99 | -4.06 |
| IPOX Intern. (IPXI)* | 0.42 | -5.85 | -4.67 |
| Exposure: United States (USD) | |||
| IPOX US Comp. (IPXC) | 0.47 | -3.90 | 0.99 |
| IPOX 100 U.S. (IPXO)* | 0.60 | 1.57 | 1.65 |
| IPOX 30 U.S. (IPXT) | 0.52 | 4.91 | 1.77 |
| Exposure: Europe (EUR) | |||
| IPOX Europe (IXTE) | -0.45 | 14.41 | -6.25 |
| IPOX Nordic (IPND) | -0.21 | 23.88 | -2.23 |
| Exposure: Asia-Pacific (Developed) (USD) | |||
| IPOX Asia-Pacific (IPTA) | 1.99 | -2.32 | -1.94 |
| Exposure: China (USD) (x A-Shares) | |||
| IPOX China (CNI) | 1.92 | -9.10 | -12.73 |
*Basis for Exchange-Traded Products (ETPs)
IPO deal flow momentum extends for another week. At least 9 accessible global IPOs commenced trading last week, with the average (median) equally-weighted IPO gaining a strong +25.85% (+10.00%) based on the difference between the final offering price and the week’s close. Amid the shortened U.S. trading week, the largest deal belonged to companies domiciled outside the US, with focus on HK-traded aircraft leasing firm USD bn 4.0 BOC Aviation (2588 HK: -3.21%). Sydney-traded traffic news provider GTN (GTN AU: +10.00%), as well as Stockholm-based application software makers Paradox Interactive (PDX SS: +65.15%) and CA-based NantHealth (NH US: +32.43%) added to last week’s successful IPOs.
| IPOs (week of May 30): | Ticker | Return (%) |
| BOC Aviation Ltd | 2588 HK | -3.21 |
| Clearside Biomedical Inc | CLSD US | 0.86 |
| Ever Smart International | 8187 HK | -9.00 |
| GTN Ltd | GTN AU | 10.00 |
| Litium Affarskommunikation | LITI SS | 8.50 |
| MediNet Group Ltd | 8161 HK | 79.63 |
| Moleculin Biotech Inc | MBRX US | 48.33 |
| NantHealth Inc | NH US | 32.43 |
| Paradox Interactive AB | PDX SS | 65.15 |
Ahead of the Brexit vote, most focus during the week of June 6 is on IPOs on the European Continent (ASRNL NA, BFIT NA, LFDE FP) and the Nordic region (BTOH NO, LAUR SS, NWG SS, PIEZO SS). Steel maker Atkore International (ATKR US) is the only US IPO scheduled.
| IPOs (week of June 6): | Ticker | Sector |
| ASR Nederland NV | ASRNL NA | Financials |
| Atkore International Group | ATKR US | Materials |
| B2Holding AS | BTOH NO | Financials |
| Basic-Fit NV | BFIT NA | Consumer Dis. |
| Chuan Holdings Ltd | 1420 HK | Industrials |
| Frasers Logistics | FRAST SP | Financials |
| La Francaise de l’Energie | LFDE FP | Utilities |
| Lauritz.com Group A/S | LAUR SS | Consumer Dis. |
| Nordic Waterproofing | NWG SS | Materials |
| PiezoMotor Uppsala AB | PIEZO SS | 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.
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