The IPOX® Week, March 26, 2018

  • Ahead of quarter-end, IPOX® Indexes follow global markets sharply lower. IPOX Europe outperforms anew.
  • IPO Deal-flow Review & Outlook: Key IPOs debut with strong gains; Amid shortened trading week, more IPOs line up across global regions.

Ahead of quarter-end, IPOX® Indexes follow global markets sharply lower: The IPOX Indexes followed the steep losses in global markets last week, with the IPOX® Global 50 (IPGL50) – benchmark for the performance of the largest, most liquid and best performing global New Listings using the IPOX® Indexes Technology – declining -4.02% to +1.64% YTD, outperforming the global market by +40 bps. on the week. Losses were broad-based and extended across regions, size brackets and sectors. While the IPOX U.S. (IPXC, IPXO, IPXT) fell in lockstep with the S&P 500 (SPX) – benchmark for U.S. stocks – notable relative gains were again recorded by the IPOX Europe (IXTE), which extended its lead vs. the European market by +119 bps. to +612 bps. YTD on big strength in recently added IPOX heavyweight German healthcare firm Spin-off EUR billion 31.6 Siemens Healtineers (SHL GR: +2.60%). Losses in individual securities otherwise were steep with U.S. trade sanctions and the Facebook (FB US: -13.89%) fall-out heavily affecting China-linked exposure including ecommerce behemoth Alibaba (BABA US: -9.53%) and social media platform operators Weibo (WB US: -7.71%) or Twitter (TWTR US: -12.79%).

IPOX® 100 U.S. Index investing with the “FPX” ETF:

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) -4.02 28.59 1.64
IPOX International (IPXI)* -3.28 37.80 3.23
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* -5.87 33.64 1.33
IPOX 100 U.S. (IPXO)* -5.97 26.04 -0.44
IPOX 30 U.S. (IPXT) -6.24 26.63 -1.85
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) -2.22 19.27 -1.22
IPOX Nordic (IPND) -4.37 17.91 -4.38
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) -2.21 23.30 1.75
IPOX® China Comp. (IPXUCHCP) -6.43 42.57 2.40
IPOX China (CNI) -5.04 37.67 7.64

* 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: Key IPOs debut with strong gains; Amid shortened trading week, more IPOs line up across global regions. At least 20 notable (non-China A shares and non-local India) firms debuted last week, with the average (median) equally-weighted firm adding +6.33% (+0.01%) based on the difference between the final offering price and Friday’s close. After pricing its low-float IPO atop the elevated initial range, San Francisco-based cloud storage and file sharing platform developer Dropbox (DBX US: +35.62%) managed to buck the market weakness, making it the largest U.S. tech IPO in more than a year and ranking as the best New Listing performer of last week. Amid more weakness in European stocks, initial reception to European IPOs was notably mixed with initial gains in Deutsche Bank (DBK GY: -11.87%) asset manager Spin-off DWS (DWS GY: +1.78%) or Swiss semiconductor maker Sensirion (SENS SW: +26.33%) mitigated by initial weakness in Dutch Financial NIBC (NIBC NA: -2.88%), for example. At least 13 firms are set to debut during the shortened trading week with seven U.S. deals leading the way, including China-linked Netflix-(NFLX US: -5.50%) alike online entertainment platform and streaming services provider Bilibili (BILI US) and iQIYI (IQ US), set to become the largest Chinese IPO since the blockbuster 09/2014 IPO of Alibaba (BABA US). We also note the IPO of HNA Group affiliate airline catering firm Gategroup (GATE SW) on the Swiss Exchange, set to help to facilitate the liquidity crunch of the Chinese conglomerate.

Select IPOs traded (week: 03/19/2018)* Country
Aekyung Industrial Co Ltd South Korea
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
QB Net Holdings Co Ltd Japan
Sensirion Holding AG Switzerland
Sunlands Online Education Group China
Select IPOs expected (week: 03/26/2018)* Country
Bilibili Inc China
Bygghemma Group First AB Sweden
China Xinhua Education Group Ltd China
Derayah REIT Saudi Arabia
Gategroup Holding AG Switzerland
GreenTree Hospitality Group Ltd China
Homology Medicine Inc U.S.A.
IBEX Holdings Ltd U.S.A.
IQIYI Inc China
OneSmart International Education Group Ltd China
Ri Happy Brinquedos S/A Mexico
Sasseur REIT Singapore
Unum Therapeutics Inc U.S.A.

* 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.

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