The IPOX® Week, November 27, 2017

  • IPOX 100 U.S. Index (IPXO) extends YTD gain to close week at fresh historic record, other IPOX Indexes enjoy solid gains as well.
  • Global Deal-flow Review and Outlook: Most deals rise, but biggest deal falls based on final offer / Pipeline light.

IPOX 100 U.S. Index (IPXO) extends YTD gain to close week at fresh historic record, other IPOX Indexes enjoy solid gains as well. The style box agnostic, large-cap centric IPOX 100 U.S. (IPXO) extended its previous week’s gains and closed out the shortened U.S. trading week at a fresh record, adding 1.18% to 24.44% YTD, 27 bps. ahead of the S&P 500 Index (SPX) – benchmark for U.S. stocks – last week. 70/100 IPOX 100 U.S. (IPXO) portfolio holdings finished the week in positive territory, with the average (median) equally-weighted stock adding 1.37% (0.73%). In the IPOX 100 U.S. (IPXO), stocks with most upside included small- and mid-caps such as health consultant Teladoc (TDOC US: 24.12%), Jack Dorsey-led payment processor Square (SQ US: 10.59%) and social networker Twitter (TWTR US: 8.00%), door- and window manufacturer Jeld-Wen (JELD US: 9.35%), social networker Tinder Owner Match (MTCH US: 7.25%) or Chicago-based online food delivery platform operator perceived corporate action play GrubHub (GRUB US: 6.00%), while the portfolio counted biotech Bioverativ (BIVV US: -9.87%), oil & gas explorer Antero Resources (AR US: -6.68%) and real estate website operator Redfin (RFIN US: -4.92%) as its worst performing index member on the week. Strength extended to the IPOX Indexes covering other global regions with the IPOX Global 50 (IPGL50) finishing the week at the highest level on record. In foreign exposure tracked by the IPOX International (IPXI), strong gains in Canadian ecommerce platform operator Shopify (SHOP US: 6.60%), Brazilian discount airline Azul (AZUL US: 5.51%) or WH Group (288 HK: 5.19%) – the world’s biggest pork producer- more than offset the negative impact of further declines in IPOX heavyweight (junk) debt-heavy French cable and satellite service provider Altice (ATC NA: -7.68%), which continued to be pressured by rumors about a pending corporate action/secondary share sale after a number of downgrades.

IPOX 100 U.S. Investing with the 5-star FPX ETF since 2006:

IPOX Price Returns (%) Last Week Q3 2017 YTD 2017
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) 1.18 8.63 28.84
IPOX International (IPXI)* 1.35 9.49 36.20
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* 1.44 8.86 34.07
IPOX 100 U.S. (IPXO)* 1.18 7.06 24.44
IPOX 30 U.S. (IPXT) 0.97 7.99 26.89
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) 0.98 5.59 17.05
IPOX Nordic (IPND) -0.02 5.17 15.91
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) 0.84 2.85 18.85
IPOX China C. (IPXUCHCHP)* 0.85 12.29 46.33
IPOX China (CNI) 0.46 9.59 37.63

* Basis for ETPs: FPX US, FPX LN, FPXU FP, FPXI US, TCIP110 IT) and CME Futures (e-mini IPOX 100 U.S. Index Futures [Commodity trading symbol: IPOZ7]).

Global Deal-flow Review and Outlook: Most deals rise, but biggest deal falls based on final offer / Pipeline light: At least 9 notable (non-China A shares and non-local India) firms commenced trading last week with the average (median) equally-weighted IPO adding 23.36% (6.69%) based on the difference between final offer and Friday’s close. With small-caps taking the lion’s share of deal flow, most initial upside was recorded by Korean drama producer Studio Dragon Corp (253450 KS: 105.1%), while Dubai’s real estate developer blue chip Emaar Development PJSC (EMAARDEV UH: -4.64%) – the week’s top deal and the biggest IPO in Dubai since 2014 – disappointed, finishing the week below final offer. We note the good initial take-up of specialty deals originated in the Australian and U.K. markets, including investment management services provider Netwealth (NWL AU: 45.95%), funeral services provider Propel Funeral Partners (PFP AU: 18.52%), online mobile payment services firm Boku (BOKU LN: 37.29%) or pub owner City Pub Group (CPC LN: 6.47%). No significant IPOs are scheduled to debut during this week.

Select IPOs traded (week: 11/20/2017) Country
Boku Inc U.S.A.
City Pub Group Plc Britain
Emaar Development PJSC U.A.E.
Equita Group SpA Italy
Netwealth Group Ltd Australia
Propel Funeral Partners Ltd Australia
PT PP Presisi Tbk Indonesia
Studio Dragon Corp South Korea
TCM Group A/S Denmark
Select IPOs expected (week: 11/27/2017) Country
Cromwell European Real Estate Investment Trust Singapore
Wijaya Karya Bangunan Gedung PT Indonesia
Becamex IDC Corp Vietnam

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.

This article is provided for educational purposes only and is not considered to be a recommendation or endorsement of any trading strategy. The author is not affiliated with Lightspeed Trading and the content and perspective is solely attributed to the author.

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