The IPOX® Week, June 19, 2017

  • IPOX Indexes trade mixed during expiration/FED week.
  • IPOX 100 U.S. (IPXO) dodges big weakness in Nasdaq, Russell 2000; rises on week. IPOX Nordic (IPND) sets fresh record.
  • Global deal-flow review and outlook: Week’s largest deal surges, significant global deal flow lined up.

IPOX Indexes trade mixed during expiration/FED week: The IPOX Indexes traded mixed for a second week in a row with the IPOX Global (IPGL50) – the global IPO and Spin-off benchmark which currently pools USD trillion 1.2 of market capitalization tied to the largest, most liquid and best performing global IPOs and Spin-offs using the IPOX Indexes Technology – declining by -0.26% to +14.86% YTD, -11 bps. more than when compared to the global market. Within the IPOX Regional Indexes universe, most notable upside was recorded by the IPOX Nordic (IPND) which added +1.55% to +14.85 YTD, pushed higher by highly liquid Denmark-based alternative energy firm 06/16 IPO Dong Energy (DENERG DC: +3.92%), for example. In the U.S., the IPOX 100 U.S. (IPXO) rose, while U.S. Technology (Nasdaq) and U.S. small-caps (Russell 2000) declined more than 1% each, as hard-to-value growth stocks including online retail platform operator Wayfair (W US: +8.71%) or applications software maker Paycom (PAYC US: +5.80%) rose to fresh all-time highs and gains in heavyweights including Tim Horton/Burger King tie-up Restaurant Brands International (QSR US: +5.96%) and IL-based drug maker AbbVie (ABBV US: +1.98%) outweighed weak energy, for example. In all, 55% of IPOX 100 U.S. Index (IPXO) stocks rose on the week with the average (median) equally-weighted portfolio holding adding +0.02% (+0.26%), in line with the applied market-cap weighted IPOX 100 U.S. Index (IPXO).

IPOX-linked select ETF performance update: The 11-year, USD million 828, IPOX 100 U.S. Index (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) added +0.22% to +10.31% YTD last week, while the First Trust International IPO ETF (FPXI) broke its winning streak, declining -0.51% to +24.39% YTD. The “FPXI” ETF is tied to the IPOX International (IPXI) and currently pools USD trillion 1.10 of market cap tied to the largest 50 IPOs domiciled outside the U.S. and trading on an accessible global stock exchange.

IPOX Price Returns (%) Last Week Q1 2017 YTD 2017
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -0.26 8.33 14.86
IPOX Global (IPGL30) -0.25 7.37 16.23
IPOX International (IPXI)* -0.74 11.49 22.33
Exposure: United States
IPOX Composite U.S. (IPXC)* -0.60 9.26 15.75
IPOX 100 U.S. (IPXO)* 0.03 6.12 9.97
IPOX 30 U.S. (IPXT) 0.18 5.90 10.42
Exposure: Europe/Nordic Region
IPOX Europe (IXTE) -0.45 9.03 18.96
IPOX Nordic (IPND) 1.55 3.84 14.95
Exposure: Asia-Pacific/China Region
IPOX Asia-Pacific (IPTA) 0.59 8.32 12.31
IPOX China C. (IPXUCHCHP)* -2.01 11.44 20.96
IPOX China (CNI) -2.17 11.52 15.86

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT) and CME Futures (e-mini IPOX 100 U.S. Index Futures [commodity trading symbol: IPOM7]).

Global deal-flow review and outlook: Week’s largest deal surges, significant global deal flow lined up. At least 12 notable accessible global (non-China A shares) firms debuted last week with the average (median) equally-weighted stock adding +7.82% (+1.51%) based on the difference between the final offering price and the week’s close. While European IPOs traded mostly flat, we note the successful debut on China-linked specialty pharma stock Wuxi Biologics (2269 HK: +35.19%), the week’s largest deal. Large deals lined up for the upcoming week include Patrick Drahis U.S. cable services provider Altice USA (ATUS US), China-linked Financial Guangzhou Rural Commercial Bank (1551 HK) and Irish privatization offering Allied Irish Banks (ALBK LN), the U.K. largest IPO YTD. Amid the surge in the IPOX Nordic (IPND), we note the IPO of Norway’s Evry AS (EVRY NO) in Oslo, the week’s only significant IPO of a technology company.

Traded IPOs (week of 06/12/2017) Country
ALD SA France
Athenex Inc United States
Balta Group NV Belgium
Boston Omaha Corp United States
G & M Holdings Ltd Hong Kong
GreenMobility A/S Denmark
HRnetgroup Ltd Singapore
Kin Shing Holdings Ltd Hong Kong
Mavi Jeans Turkey
Sparebank 1 Oestlandet Norway
TCG BDC Inc United States
Wuxi Biologics Cayman Inc China
Upcoming IPOs (week of 06/19/2017) Country
Allied Irish Banks PLC Ireland
Altice USA Inc United States
Bone Support AB Sweden
Evry AS Norway
Four Springs Capital Trust United States
Granite Point Mortgage Trust Inc United States
Guangzhou Rural Commercial Bank Co Ltd China
Orient UNB Takaful PJSC UAE
PCGH ZDP PLC Britain
Safety Income and Growth Inc United States
Xin Point Holdings Ltd China

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.

This article is provided for educational purposes only and is not considered to be a recommendation or endorsement of any trading strategy. The author is not affiliated with Lightspeed Trading and the content and perspective is solely attributed to the author.

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