The IPOX® Week, May 21, 2018

  • IPOX 100 U.S. (IPXO) rises as U.S. small caps notch record. China-linked specialty exposure propels IPOX China (CNI) to big week.
  • IPO Deal-flow Review & Outlook: Vietnam’s record-breaking IPO falls on debut. U.S. IPOs set for busy week.

IPOX 100 U.S. (IPXO) rises as U.S. small caps notch record. China-linked biotech’s propel IPOX China (CNI). Amid higher U.S. rates, a rising dollar and gyrating U.S. Equity Indexes Spreads, the IPOX Indexes finished U.S. option expiration week well supported. E.g., the diversified IPOX 100 U.S. (IPXO) – benchmark for the performance of U.S. New Listings – added +0.16% to +4.56% YTD, outpacing the S&P 500 (SPX) by +70 bps. on the week, its second consecutive week of strong relative gains. Here, significant upside focus in individual portfolio holdings was on cable & satellite services provider Altice USA (ATUS US: +13.49%) or retail store operator Ollies Bargain Outlet (OLLI US: +5.58%), while the purchase of Sweden-based payment processor iZettle for USD billion 2.2 propelled IPOX heavyweight PayPal (PYPL US: +2.01%) towards the end of the week. Led by firms including online personal shopping services provider StichFix (SFIX US: -8.52%) or embattled consumer staple Kraft Heinz (KHC US: -4.14%), 46/100 IPOX 100 U.S. (IPXO) portfolio holdings fell last week, with the average (median) equally-weighted constituent adding +0.24% (+0.17%), in line with the applied market-cap weighted index. On the back of renewed gains in China-linked specialty small- and mid-cap exposure including Genscript Biotech (1548 HK: +14.05%), Beigene (BGNE US: +11.72%) or Baozun (BZUN US: +10.18%), the IPOX China (CNI) extended its YTD by +1.90% to +14.07%.

IPOX-linked ETFs (FPX, FPXI) mirror gains in underlying IPOX Indexes: The USD billion 1.11 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) added +0.28% to +4.79% YTD. Linked to the IPOX International (IPXI), the First Trust International IPO ETF (FPXI), dropped to +3.78% YTD. “FPX” and “FPXI” provide a turnkey solution to access the “going public” associated with U.S. (FPX) and International (FPXI) New Listings, often a pure proxy for innovation and economic growth.

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) -1.04 28.59 3.48
IPOX International (IPXI)* -1.44 37.80 2.94
Exposure: United States (USD) (Price)
IPOX Composite U.S. (IPXC)* 0.01 33.64 5.96
IPOX 100 U.S. (IPXO)* 0.16 26.04 4.56
IPOX 30 U.S. (IPXT) -0.20 26.63 1.89
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe (IXTE) -1.04 19.27 5.02
IPOX Nordic (IPND) 1.28 17.91 1.81
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) -0.39 23.30 2.79
IPOX China (CNI) 1.90 37.67 14.07

* 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: Vietnam’s record-breaking IPO falls on debut. U.S. IPOs set for busy week. At least 12 notable (non-China A shares and non-local India) firms debuted last week, with the average (median) equally-weighted firm adding/losing +6.28% (-0.84%) based on the difference between the final offering price and Friday’s close. The largest Vietnamese listing in history, the IPO of real estate developer Vinhomes (VHM VN: -3.66%), closed its first week of trading in negative territory, while hospital operator Royal Prima (PRIM IJ: +63.00%) performed best. Having priced above range, Utah-based online learning company Pluralsight (PS US: +39.20%) marked another strong open for a U.S. tech unicorn. Focus this week is on deals taking place in the U.S., with at least 5 IPOs lined up, including online lending fintech company GreenSky (GSKY US) and more small-cap biopharmaceutical companies.

Select IPOs traded (week: 05/14/2018) Country
Arabia Falcon Insurance Co SAOG Oman
BSR Real Estate Investment Trust Canada
Evans Dixon Ltd Australia
Medikalika Hermina Tbk PT Indonesia
Ovzon AB Sweden
Pluralsight Inc United States
Polyphor AG Switzerland
Royal Prima Tbk PT Indonesia
Sok Mark etler Ticaret AS Turkey
Somec SpA Italy
Surya Pertiwi Tbk PT Indonesia
Vinhomes JSC Vietnam
Select IPOs expected (week: 05/21/2018) Country
Dontnod Entertainment France
Evo Payment Inc United States
GreenSky Inc United States
Iterum Therapeutics Plc Ireland
Kiniksa Pharmaceuticals Ltd United States
Sarimelati Kencana PT Indonesia
Scholar Rocks Holdings Corp United States
Team17 Group Ltd British

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.

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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