The IPOX® Week, March 19, 2018

  • IPOX® Indexes trade mixed during expiration week.
  • IPOX® International ETF (ticker: FPXI) rises, becomes first ETF to track Siemens Healthineers (SHL GR).
  • IPO Deal-flow Review & Outlook: Busy week for global deals, Dropbox (DBX US) in U.S. IPO pipeline.

IPOX® Indexes trade mixed during expiration week. The IPOX Indexes traded mixed last week, with the IPOX® Global 50 (IPGL50) – benchmark for the performance of the largest, most liquid and best performing global New Listings – declining -0.11% to +5.90% YTD, outpacing the global market by +46 bps. on the week. Within the IPOX Regional Indexes Universe, weakness in the IPOX U.S. (IPXC, IPXO, IPXT) and IPOX Europe (IXTE, was mitigated by big strength in the IPOX Asia-Pacific (IPTA) and IPOX China (IPXUCHCP, CNI).

IPOX® International ETF (ticker: FPXI) rises, becomes first ETF to track Siemens Healthineers (SHL GR). Strong upside in China- and Developed APAC-linked exposure including H.K.-traded biotech Wuxi Pharma (2269 HK: +9.29%), e-commerce behemoth Alibaba (BABA US: +5.11%), Financial CK Asset Management (1113 HK: +3.78%) or Japan-traded professional services firm Recruit Holdings (6098 JP: +5.36%) left the IPOX International (IPXI) well ahead on the week, gaining +0.78% to +6.72%, a massive +750 bps. ahead of the international market YTD. The index and respective ETF (ticker: FPXI) also became the first index/ETF to track Health Care Spin-off IPO Siemens Healthineers (SHL GR: +9.82%).

IPOX® International Investing with the 4-star “FPXI” ETF:

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -0.11 28.59 5.90
IPOX International (IPXI)* 0.78 37.80 6.72
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* -0.80 33.64 7.65
IPOX 100 U.S. (IPXO)* -1.36 26.04 5.89
IPOX 30 U.S. (IPXT) -1.60 26.63 4.69
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) -0.91 19.27 1.03
IPOX Nordic (IPND) -0.60 17.91 -0.01
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) 1.03 23.30 4.05
IPOX® China Comp. (IPXUCHCP) 2.01 42.57 9.45
IPOX China (CNI) 0.90 37.67 13.35

* 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: Busy week for global deals, Dropbox (DBX US) in U.S. IPO pipeline. At least 11 notable (non-China A shares and non-local India) firms debuted last week, with the average (median) equally-weighted firm adding +21.05% (+9.61%) based on the difference between the final offering price and Friday’s close. Aforementioned medical equipment unit spin-off Siemens Healthineers (SHL GR: +9.82%) marked the second largest IPO in Germany since 2000. Upsized Silicon Valley tech-unicorn cloud security company Zscaler (ZS US: +106.25%) priced above the already elevated range, skyrocketing after opening. Asian New Listings finished the week mixed with notable initial weakness in jewelry wholesaler CS Mall Group (1815 HK: -4.20%) and waste management company China Boqi Environmental (2377 HK: -0.83%). Deals in Japan rose, including chemical producer KNC Laboratories (6568 JP: +44.87%) and human resource firm Nisso (6569 JP: +23.08%). 17 companies are set to debut this week. In the U.S., top of the list ranks cloud-storage platform provider Dropbox (DBX US). Most focus is on Europe with 10 deals in the pipeline, including Deutsche Bank’s asset management unit Financial DWS Group (DWS GR), with the full deal size coverage valuing the company at EUR billion 7.

Select IPOs traded (week: 03/12/2018)* Country
Arcus Biosciences Inc U.S.A.
Bridgewater Bancshares Inc U.S.A.
China BoQi Environmental Holdings Co Ltd China
CSMall Group Ltd China
Energean Oil & Gas PLC Britain
JTC PLC Britain
KNC Laboratories Co Ltd Japan
Nisso Corp Japan
Siemens Healthineers AG Germany
Trimantium GrowthOps Ltd Australia
Zscaler Inc U.S.A.
Select IPOs expected (week: 03/19/2018)* Country
Alfen Beheer BV Netherland
Altia Oyj Finland
B&S Group Sarl Luxembourg
Dropbox Inc U.S.A.
DWS Group GmbH & Co KGaA Germany
Elkem AS Norway
NIBC Holding NV Netherland
PolyPid Ltd Israel
QB Net Holdings Co Ltd Japan
Sensirion Holding AG Switzerland
Sunlands Online Education Group China

* Company operates in Closed-end funds, Country funds-closed-end, Special Purpose Entity, or Specified Purpose Acquisition are excluded.

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 and the content and perspective is solely attributed to the author.

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