The IPOX® Week, June 30, 2017

  • All IPOX Indexes record big quarterly performance jump, profit taking caps gains into quarter-end.
  • Strong quarter for IPOX-linked ETFs.
  • Global deal-flow review and outlook: Europe leads the way in IPOs; U.S. deals struggle. Little deal flow seen.

All IPOX Indexes record big quarterly performance jump, profit taking caps gains into quarter-end: All IPOX Indexes recorded gains last quarter, but significant weakness in pockets of international equity (Nasdaq 100: -2.69%, DAX 30: -3.21%) driven by a resurging Euro (EURUSD: +2.07%), disappointing results by European car suppliers (SHA GY: -12.80%), rising global yields and risk (VIX: +11.58%) capped gains into quarter-end. On the global level, e.g., the IPOX Global (IPGL50) added +5.54% to +14.33% YTD last quarter, +215 bps. more than when compared to the global market. Strength was broad-based and extended across the IPOX Regional Universe with the biggest quarterly gains recorded by the IPOX China (IPXUCHP), IPOX International (IPXI) and IPOX Nordic (IPND). Most upside focus amongst individual IPOX Holdings was centered around high growth (China)-linked (consumer/ technology/health care) exposure, including online household goods seller Wayfair (W US: +89.87% [quarter]), real estate website operator Zillow (Z US: +45.56%), payment processors PayPal (PYPL US: +24.76%) and Jack Dorsey-led Square (SQ US: +35.76%) or China-domiciled, U.S.-traded e-commerce behemoth Alibaba (BABA US: +30.67%), online direct sales firm JD.com (JD US: +26.07%) or consumer staple restaurant operator Spin-off Yum China (YUMC US: +44.96%). The respective IPOX Portfolios counted energy firms and social networkers which had recently gone public including U.S.-traded Snap (SNAP US: -21.13%), Line (LN US: -9.57%), as well as Hong Kong-traded Meitu (1357 HK: -30.21%) as some of the worst performing portfolio holdings on the quarter.

Strong quarter for IPOX-linked ETFs: Last quarter, the U.S.-focused USD million 842 First Trust U.S. Equity Opportunities ETF (FPX) added +4.17% to +10.73% YTD, while the internationally-focused First Trust International IPO ETF (FPXI) added a large +9.81% to +23.53% YTD.

IPOX Price Returns (%) Last Week Q2 2017 YTD 2017
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -2.04 5.54 14.33
IPOX Global (IPGL30) -2.11 8.07 16.03
IPOX International (IPXI)* -1.90 9.24 21.80
Exposure: United States
IPOX Composite U.S. (IPXC)* -1.25 7.44 17.40
IPOX 100 U.S. (IPXO)* -1.27 3.86 10.22
IPOX 30 U.S. (IPXT) -1.55 4.62 10.79
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) -2.73 4.95 14.44
IPOX Nordic (IPND) -1.56 8.64 12.81
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) -0.60 2.99 11.57
IPOX China C. (IPXUCHCHP)* -1.63 10.06 22.65
IPOX China (CNI) -1.87 4.62 16.67

* 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: Europe leads the way in IPOs; U.S. deals struggle. Little deal flow seen: A massive notable 21 accessible global (non-China A shares) firms debuted last week with the average (median) equally-weighted stock adding +3.70% (+2.38%) based on the difference between the final offering price and the week’s close. European deals led the way in all respects (size and performance), including EUR billion 13.5 Allied Irish Banks (ALBK LN: +12.50%), Germany’s online food delivery firm EUR billion 4.8 Delivery Hero (DHER GR: +10.39%) or Spanish banking group EUR billion 1.8 Unicaja Banco (UNI SM: +6.36%). Larger U.S. deals traded mixed, including meal-kit delivery service Blue Apron (APRN US: -6.60%) – which saw its IPO range slashed by ca. 35% into its first day of trading – while firms including IL-based Byline Bancorp (BY US: +5.53%), clinical-stage pharma firm Dova (DOVA US: +31.12%) or Reg. A IPO ShiftyPixy (PIXY US: +28.33%) saw a good take-up. Little deal flow is expected for the shortened U.S. trading week.

Traded IPOs (week of 06/26/2017) Country
Aeronautics Ltd. Israel
Aileron Therapeutics Inc United States
Allied Irish Banks PLC Ireland
Avenue Therapeutics Inc United States
Blue Apron Holdings Inc United States
Byline Bancorp Inc United States
Delivery Hero AG Germany
Dova Pharmaceuticals Inc United States
DP Eurasia NV Netherlands
Eris Lifesciences Ltd India
Esquire Financial Holdings Inc United States
FFI Holdings PLC United States
Mersana Therapeutics Inc United States
Noratis AG Germany
Pakistan Stock Exchange Ltd Pakistan
Polyus PJSC Russia
ShiftPixy Inc United States
Tintri Inc United States
Unicaja Banco SA Spain
Vapiano SE Germany
Xin Point Holdings Ltd China
Upcoming IPOs (week of 07/03/2017) Country
Akcea Therapeutics Inc United States
Sheng Ye Capital Ltd Hong Kong
Tatton Asset Management PLC Britain
Waberer’s International Zrt Hungary
Zur Rose Group AG Switzerland

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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