Ahead of quarter-end, select IPOX Indexes close at fresh all-time highs: On the back of gains in big pharma and China-linked technology, e.g., select IPOX Indexes surged to close the week at fresh records with the IPOX Global (IPGL50) adding +1.61% to +16.70% YTD last week, +143 bps. more than when compared to the global market. Within the IPOX Regional Indexes Universe, notable upside was recorded by the IPOX 100 U.S. (IPXO) which added +1.51% to +11.64% YTD. Moreover, while international markets fell, the IPOX International (IPXI) added a further +1.49% to +24.16% YTD. Upside focus amongst IPOX holdings domiciled in the U.S. was on U.S. pharma/biotech stocks with strong upside recorded by IPOX heavyweights dividend heavy Abbvie (ABBV US: +2.24%) and Shire (SHPG US: +5.01%), while biotech Kite Pharma (KITE US: +14.58%) was the best performing IPOX 100 U.S. holding. Amongst non U.S.-domiciled exposure tracked by the IPOX International (IPXI), specialty consumer/technology stocks traded well, including travel website operator Trivago (TRVG US: +13.99%), China-linked online direct sales firm JD.com (JD US: +12.52%) or Israel-based website developer Wix.com (WIX US: +11.12%). In the aftermath of the Whole Foods Market (WFM US: +0.62%)/Amazon.com (AMZN +1.62%) buy-out news, stocks including retail store operator Burlington (BURL US: -10.21%) and a slew of consumer staples including US Foods Holdings (USFD US: -6.39%) continued to trade under pressure. In that respect, we note with interest Wednesday’s announcement by IPOX heavyweight Chinese e-commerce behemoth Alibaba Group (BABA US: +6.04%) to sell U.S. beef from IPOX holding Tyson Foods (TSN US: +1.92%) on its Tmall virtual shopping mall for Chinese consumers.
IPOX ETFs mirror big gains in underlying indexes: Last week, the US-focused USD million 837 First Trust U.S. Equity Opportunities ETF (FPX) added +1.60% to +12.08% YTD, while the internationally-focused First Trust International IPO ETF (FPXI) added +1.72% to +26.47% YTD.
|IPOX Price Returns (%)||Last Week||Q1 2017||YTD 2017|
|Exposure: Global/International (xUS) (USD)|
|IPOX Global (IPGL50)||1.61||8.33||16.70|
|IPOX Global (IPGL30)||1.98||7.37||18.53|
|IPOX International (IPXI)*||1.49||11.49||24.16|
|Exposure: United States|
|IPOX Composite U.S. (IPXC)*||2.71||9.26||18.88|
|IPOX 100 U.S. (IPXO)*||1.51||6.12||11.64|
|IPOX 30 U.S. (IPXT)||1.92||5.90||12.53|
|Exposure: Europe/Nordic Region|
|IPOX Europe (IXTE)||-1.10||9.03||17.66|
|IPOX Nordic (IPND)||-0.30||3.84||14.60|
|Exposure: Asia-Pacific/China Region|
|IPOX Asia-Pacific (IPTA)||-0.06||8.32||12.25|
|IPOX China C. (IPXUCHCHP)*||3.08||11.44||24.68|
|IPOX China (CNI)||2.62||11.52||18.89|
* 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: IPOU7]).
Global deal-flow review and outlook: Week’s largest deal rises strongly, flurry of deals lines up. At least 8 notable accessible global (non-China A shares) firms debuted last week with the average (median) equally-weighted stock adding +2.76% (+1.20%) based on the difference between the final offering price and the week’s. Similar to the previous week, the week’s largest deal (ATUS US: +14.33%) also ranked as the week’s best performing. More IPOs firms are expected across global regions, including Allied Irish Bank (ALBK LN), Germany’s food ordering platform operator Delivery Hero (DHER GR) or restaurant group Vapiano (VAO GR). In the United States, notable deals include meal-kit delivery service Blue Apron (APRN US), infrastructure software developer Tintri (TNTU US) or IL-based Byline Bancorp (BY US), amongst others.
|Traded IPOs (week of 06/19/2017)||Country|
|Altice USA Inc||United States|
|Bone Support AB||Sweden|
|Fastighets AB Trianon||Sweden|
|Granite Point Mortgage Trust Inc||United States|
|Guangzhou Rural Commercial Bank Co Ltd||China|
|PCGH ZDP PLC||Britain|
|Safety Income and Growth Inc||United States|
|Upcoming IPOs (week of 06/26/2017)||Country|
|Akcea Therapeutics Inc.||United States|
|Aileron Therapeutics Inc.||United States|
|Allied Irish Banks PLC||Ireland|
|Blue Apron Holdings Inc.||United States|
|Byline Bancorp Inc.||United States|
|Delivery Hero AG||Germany|
|Dova Pharmaceutics Inc.||United States|
|Eris Lifesciences Ltd.||India|
|FFI Holdings PLC||Britain|
|Mersana Therapeutics Inc.||United States|
|Tintri Inc.||United States|
|Vodacom Tanzania Ltd.||Tanzania|
|Unicaja Banco SA||Spain|
|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.