The IPOX® Week, November 05, 2018

  • IPOX Indexes surge in strong re-bound from October sell-off as risk plunges (VIX: -19.25%), U.S. rates rise on week.
  • October 2018 global IPO Deal Flow revisited: IPOs in the U.S. lead global IPO performance rankings.
  • IPO Deal-flow Review & Outlook: Innovent Biologics (1801 HK) soars after debuting in Hong Kong, November IPO slowdown seen.

IPOX Indexes surge in strong re-bound from October sell-off as risk plunges (VIX: -19.25%), U.S. rates rise on week. Amid a big short-covering rally in global equities and end-of-year positioning ahead U.S. mid-term elections and more trade talks, the IPOX Indexes staged a massive rally last week, with most of the portfolios exceeding the performance of the respective benchmarks. Most upside focus was on the oversold markets abroad, including the IPOX Europe (IXTE, IPOE, IPND) and IPOX Asia-Pacific/China (IPTA, CNI), which all significantly advanced. Big weakness in select IPOX heavyweights after earnings and adverse corporate events soured sentiment in the IPOX 100 U.S. (IPXO) somewhat towards the week-end. Across the IPOX Universe, individual firms with most upside focus included U.S. sportswear maker Under Armour (UAA US: +31.81%), Dutch-based U.S.-traded IPOX 100 Europe (ETF: FPXE) holding biotech Argenx (ARGX US: +30.09%), IPOX International (ETF: FPXI) holding anorak maker Canada Goose (GOOS US: +22.94%) or hardware maker IPOX 100 U.S. (ETF: FPX) holding Nutanix (NTNX US: +19.86%). Disappointment over earnings pressured IPOX heavyweight ketchup maker Kraft Heinz (KHC US: -7.17%) as well as payment processor private equity-backed First Data (FDC US: -13.19%) into the week-end, for example.

IPOX-linked funds rise sharply on the week: The USD billion 1.1 IPOX® 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) recovered to -0.13% YTD, its international version (FPXI) recovered to -8.97% YTD and the First Trust IPOX® Europe Equity Opportunities ETF (FPXE) added +4.49%. The actively managed Catalyst IPOX® Allocation Fund (OIPAX) added +2.72% to close +3.91% YTD higher.

October 2018 global IPO Deal Flow revisited. 42 global firms commenced trading during October, raising USD billion 15.6 in the process. While the majority of deals were U.S. based (45%), the largest deal belonged to German car braking systems maker Knorr Bremse (KBX GR). Based on final offer, IPOs in the U.S. also ranked as the best performers, including IT services provider Elastic (ESTC US) and biotech Guardant Health (GH US).

Select IPOX® Indexes Returns (%) Last Week 2017 2018 YTD
IPOX® Long-Only: Global/International
IPOX® Global (IPGL50) (USD) 3.70 28.59 -4.53
IPOX® International (IPXI)* (USD) 5.08 37.80 -9.63
IPOX® Long-Only: United States
IPOX® Composite U.S. (IPXC)* 3.23 33.64 -0.07
IPOX® 100 U.S. (IPXO)* 2.15 26.04 -0.43
IPOX® 30 U.S. (IPXT) 0.81 26.63 -3.32
IPOX® Long-Only: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 4.58 19.27 -5.35
IPOX® Nordic (IPND) (EUR) 6.82 17.91 -6.36
IPOX® 100 Europe (IPOE)* (USD) 4.74 41.77 -9.10
IPOX® Long-Only: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 3.94 23.30 -3.77
IPOX® China (CNI) (USD) 8.96 37.67 -14.22
IPOX® Japan (IPJP) (JPY) 3.75 N/A N/A

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures [Symbol: IPOZ8].

IPO Deal-flow Review & Outlook: Innovent Biologics (1801 HK) soars on Hong Kong debut. November IPO slowdown seen. 5 firms debuted last week across accessible global regions, with the average (median) equally-weighted company adding +8.08% (+0.47%) based on the difference between the final offering price and Friday’s close. Following big post-IPO gains in incumbents, including biotech IPOX International (ETF: FPXI) holding Wuxi Biologics Cayman (2269 HK: +14.67%) – Hong Kong’s largest biotech IPO YTD – Chinese antibody cancer drug company Innovent Biologics (1801 HK: +33.91%) – soared after debuting, indicating renewed positive momentum in the Hong Kong IPO market. Amid heightened risk, biotech’s going public in the U.S. had a generally lukewarm reception with upsized medical technology company, Irvine, CA-based Axonics Modulation (AXNX US: +0.47%), London-based, market-ready gene-therapy company Orchard Therapeutics (ORTX US: 0.00%) and synthetic DNA maker Twist Bioscience (TWST US: 0.00%) finishing the week relatively flat based on final offer. As the U.S. IPO market has entered the seasonally slow November period with less deals and smaller offering sizes expected, only one U.S. deal (CNF US) is expected for this week. Abroad, focus is on firms including Hong Kong property management firm Xinchengyue (1755 HK) and Austrian biotech Themis Bioscience.

Select IPOs traded (week: 10/29/2018) Domicile
Axonics Modulation Technologies Inc United States
Innovent Biologics Inc China
Orchard Therapeutics Britain
Praram 9 Hospital PLC Thailand
Twist Bioscience Co United States
Select IPOs expected (week: 11/05/2018) Domicile
CNFinance Holdings Ltd China
Themis Bioscience NV Austria
Xinchenyue Holdings Ltd China

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