The IPOX® Week, May 28, 2018

  • Ahead of shortened U.S. trading week, IPOX China (CNI), IPOX Asia-Pacific (IPTA) lead otherwise lagging IPOX Indexes.
  • IPO Deal-flow Review & Outlook: Evo Payment (EVOP US) tops U.S. rankings / Deals in Asia-Pacific in focus.

Ahead of shortened U.S. trading week, IPOX China (CNI), IPOX Asia-Pacific (IPTA) lead otherwise lagging IPOX Indexes. Amid continued strength in the U.S. dollar and (perceived) weak earnings amongst select IPOX heavyweights, the IPOX Indexes traded mixed last week: For example, while the IPOX 100 U.S. (IPXO) gave up some of its relative gains vs. the S&P 500 (SPX) from the previous two weeks to decline by -1.12% to +3.39% YTD, the IPOX Europe (IXTE) fell in line with the weak European market, while strong gains in Japan-traded specialty exposure propelled the IPOX Asia-Pacific (IPTA) and the IPOX China (CNI) closed near a multi-year high. In the weak IPOX 100 U.S. (IPXO), significant downside was recorded by select heavyweights Spin-offs hardware maker Hewlett Packard Enterprise (HPE US: -11.62%), IT services and solutions provider DXC Technology (DXC US: -6.01%) or IL-based drug maker AbbVie (ABBV US: -4.62%), while we note renewed gains amongst U.S. Specialty Financials including Houlihan Lokey (HLI US: +3.42%) or Moelis & Co. (MC US: +2.31%). Following the recent aggressive pre-IPO acquisition of jobs websites Canadian-domiciled Workopolis or U.S. based Glassdoor, we note a fresh post-IPO high in USD billion 47.1 Tokyo-traded Recruit (6098 JP: +4.66%), joining a good week for other Japan-traded specialty exposure including biopharma Peptidream (4587 JP: +5.09%) or logistics firm 12/2017 IPO SG Holdings (9143 JP: +4.14%).

IPOX-linked ETFs (FPX, FPXI) mirror gains in underlying IPOX Indexes: The USD billion 1.1 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) fell -1.16% to +3.57% YTD. Linked to the IPOX International (IPXI), the First Trust International IPO ETF (FPXI), dropped to +3.56% 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 2.42
IPOX International (IPXI)* -0.35 37.80 2.59
Exposure: United States (USD) (Price)
IPOX Composite U.S. (IPXC)* 0.27 33.64 6.25
IPOX 100 U.S. (IPXO)* -1.12 26.04 3.39
IPOX 30 U.S. (IPXT) -1.38 26.63 0.49
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe (IXTE) -1.27 19.27 3.68
IPOX Nordic (IPND) -0.35 17.91 1.45
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) 0.60 23.30 3.40
IPOX China (CNI) 0.82 37.67 15.01

* 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: Evo Payment (EVOP US) tops U.S. rankings / Deals in Asia-Pacific in focus. At least 9 notable (non-China A shares and non-local India) companies debuted last week, with the average (median) equally-weighted firm adding +14.28% (+7.83%) based on the difference between the final offering price and Friday’s close. Priced at the top of the initial range, payment solutions provider Evo Payment (EVOP US: +24.25%) led another good week for U.S. specialty IPOs, with initial IPO sentiment benefiting from “red hot” pre-IPO sentiment for payment processors, after iZettle’s acquisition and ahead of the IPO of Europe’s Adyen. Amongst foreign domiciled IPOs in the U.S., UK video game developer Team17 (TM17 LN: +40.91%) ranked as the best performing IPO last week, while upsized Ireland-based pharmaceutical company Iterum Therapeutics (ITRM US: -1.15%) finished the week below its final offering price. Amid the shortened U.S. trading week, no IPOs are lined up to take place in the U.S. Focus is on deals across Asia-Pacific, including Tokyo-based online printing and delivery startup “Uber for printing” Raksul (4383 JP).

Select IPOs traded (week: 05/21/2018) Country
Archimede SpA/Milano Italy
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 Britain
Select IPOs expected (week: 05/28/2018) Country
Asuransi Tugu Pratama Indonesia Indonesia
China 21st Century Education Group Ltd China
Horizon Housing Reit Britain
LH Group Ltd Hong Kong
Raksul Inc Japan
Sejong Medical Co Ltd South Korea
Voluntis SA France

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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