The IPOX® Week, May 07, 2018

  • IPOX Indexes steady as IPOX Europe (IXTE) surges to highest since Financial Crises.
  • IPO Deal-flow Review & Outlook: Ping An Good Doctor (1833 HK) debuts flat/Chinese smartphone maker Xiaomi filed for World’s largest IPO since 2014/AXA Equitable (EQH US), Springer Nature (SPG GF) lined up.

IPOX Indexes steady as IPOX Europe (IXTE) surges to highest since Financial Crises. Weakness amongst select U.S. traded exposure after earnings and incumbent effects weighted on the otherwise strongly performing IPOX Indexes last week. E.g., while the IPOX 100 U.S. (IPXO) shed -0.15% to +0.77% YTD – slightly ahead of the S&P 500 (SPX) – good earnings and momentum drove the IPOX Europe (IXTE) to its highest level since the Financial Crises and the IPOX Indexes focusing on Emerging (CNI) and Developed Asia-Pacific (IPTA) traded well supported. Returns amongst individual portfolio holdings continued to be widely distributed: In the IPOX 100 U.S. (IPXO), e.g., big losses in dating website operator Match Group (MTCH US: -26.10%) on Facebook’s (FB US: +1.74%) entry into the space or desolate social networker Snap (SNAP US: -24.70%) were almost offset by surging online furniture retailer Wayfair (W US: +28.62%) or optical products maker Lumentum (LITE US: +16.85%), while beleaguered consumer staple Spin-off Kraft Heinz (KHC US: +2.89%) staged a late-week rally after earnings. Ahead of a busy week for European IPOs, the story of the week belongs to the IPOX Europe (IXTE) as gains in Italian luxury car maker Ferrari (RACE IM: +11.51%), London-traded discount airline Wizz Air (WIZZ LN: +6.32%) or recent IPO Spin-off Siemens Healthineers (SHL GY: +3.27%) propelled IPOX’s relative 5-year performance lead vs. the European market to a massive +4044 bps.

IPOX-linked ETFs (FPX, FPXI) steady after last weeks’ declines. The IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) shed -0.07% to +0.96% YTD. Linked to the IPOX International (IPXI), the First Trust International IPO ETF (FPXI) climbed to +4.22% YTD. “FPX” and “FPXI” offer investors a turnkey solution to the “going public” effect associated with the largest U.S. (FPX) and International (FPXI) New Listings, often a pure proxy for economic growth and innovation.

IPOX® 100 U.S. – Investing with the “FPX” ETF since 2006

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (USD) (Price)
IPOX Global (IPGL50) -0.30 28.59 2.20
IPOX International (IPXI)* 0.40 37.80 2.90
Exposure: United States (USD) (Price)
IPOX Composite U.S. (IPXC)* 0.04 33.64 3.13
IPOX 100 U.S. (IPXO)* -0.15 26.04 0.77
IPOX 30 U.S. (IPXT) -0.94 26.63 -1.44
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe (IXTE) 2.04 19.27 5.11
IPOX Nordic (IPND) -0.20 17.91 -1.29
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) 0.72 23.30 1.67
IPOX China (CNI) 1.49 37.67 9.57

* 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: Ping An Good Doctor debuts flat / AXA Equitable, Springer Nature lined up. At least 11 notable (non-China A shares and non-local India) firms debuted last week, with the average (median) equally-weighted firm +9.57% (+4.05%) based on the difference between the final offering price and Friday’s close. While the week’s largest deal, the IPO of Hong Kong-traded Ping An Healthcare and Technology (1833 HK: +0.00%) closed flat amid frenzied demand, select U.S. deals continued to record significant initial returns including small-cap biotech Inspire Medical System (INSP US: +52.94%) or cybersecurity firm Carbon Black (CBLK US: +26.00%). In the U.S., focus this week is on French insurance giant AXA’s U.S. unit IPO AXA Equitable (EQH US), the largest U.S. listing since the debut of Alibaba (BABA US: +6.62%) in 2014. Focus in Europe is on specialist publisher Springer Nature (SPG GR), the third largest listing in Germany this year, while the IPO of consumer staple Libstar Holdings (LBR SJ) extends the list of recent New Listings on the African continent.

Select IPOs traded (week: 04/30/2018) Country
Carbon Black Inc United States
Ceva Logistics AG Switzerland
CI Capital Holding Co SAE Egypt
Construction Partners Inc United States
Inspire Medical Systems Inc United States
Ping An Healthcare and Technology Co Ltd China
UNITY Biotechnology Inc United States
Vivo Energy PLC Britain
Select IPOs expected (week: 05/07/2018) Country
AXA Equitable Holdings Inc United States
Azora Altus SA Spain
Evelo Biosciences Inc United States
HUYA Inc China
Libstar Holdings Ltd South Africa
NFON AG Germany
Origin Bancorp Inc United States
Springer Nature AG & Co KGaA Germany

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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