The IPOX® Week, October 15, 2018

  • IPOX 100 U.S Index (IPXO) falls with markets, holds key 3000 Index level anew.
  • IPOX Developed Asia-Pacific (IPTA) gains in relative strength.
  • IPO Deal-flow Review & Outlook: Amid soaring risk, sentiment for IPOs turns to mixed/selective.

IPOX 100 U.S Index (IPXO) falls with markets, holds key 3000 Index level anew. The IPOX Indexes continued to trade significantly lower across the board for a 2nd week in a row, as U.S. yields rose anew and U.S. equities finally played catch-up with Europe and Asia-Pacific, forcing more indiscriminate selling in select equities, many of them unseasoned companies with relatively little beta history. Ahead of earnings, the IPOX 100 U.S. (IPXO), e.g., declined by -4.75% to +1.06% YTD, in line with the performance of the major benchmarks. We note the strong technical bounce off the key 3000 Index level towards the week-end. Just 8/100 IPOX 100 U.S. (IPXO) holdings closed the week higher, with the average (median) equally-weighted stock shedding -5.32% (-4.53%). Big declines in high-beta exposure on profit taking ahead of earnings exacerbated losses, including payment processor Square (SQ US: -21.40%), car vending machine operator Carvana (CVNA US: -12.94%) or application software maker Blackline (BL US: -11.99%), while clothing retail store operator Burlington Stores (BURL US: +2.06%) or restaurant chain Wingstop (WING US: +0.91%) rose against the trend.

IPOX 100 U.S. (IPXO) reconfirms 3000-3400 trading range:

IPOX Developed Asia-Pacific (IPTA) gains relative strength. We note another strong relative week in the IPOX Developed Asia-Pacific Index (IPTA) which extended its relative YTD gains vs. its local benchmark to +477 bps. The portfolio is composed of a mix of mid- and large-caps with a developed Asia-Pacific domicile trading on an accessible global market.

Select IPOX-linked Investment Products Performance Update: Amid global market sell-off, the USD billion 1.1 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) fell to +1.46% YTD last week, while its international counterpart (FPXI) declined to -8.78% YTD and the First Trust IPOX® Europe Equity Opportunities ETF (FPXE) fell to -3.28% YTD. Amongst the range of actively managed IPOX-linked long-only products, the Catalyst IPOX® Allocation Fund (OIPAX) fell to +4.92% YTD.

IPOX Price Returns (%) Last Week 2017 2018 YTD
Exposure: Global/International (xUS) (Price)
IPOX® Global (IPGL50) (USD) -5.03 28.59 -3.71
IPOX® International (IPXI)* (USD) -4.48 37.80 -9.90
Exposure: United States (Price)
IPOX® U.S. Composite (IPXC)* (USD) -4.40 33.64 0.90
IPOX® 100 U.S. (IPXO)* (USD) -4.75 26.04 1.06
IPOX® 30 U.S. (IPXT) (USD) -4.56 26.63 -1.06
Exposure: Europe/Nordic Region (Price)
IPOX® Europe 30 (IXTE) (EUR) -7.06 19.27 -6.17
IPOX® Nordic (IPND) (EUR) -3.98 17.91 -5.73
IPOX® 100 Europe (IPOE)* (USD) -5.50 41.77 -8.66
Exposure: Asia-Pacific/China Region (Price)
IPOX® Asia-Pacific (IPTA) (USD) -2.68 23.30 -0.90
IPOX® China (CNI) (USD) -4.42 37.67 -15.04
IPOX® Japan (IPJP) (JPY) -3.47 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. Index Futures [Symbol: IPOZ8].

IPO Deal-flow Review & Outlook: Amid soaring risk, sentiment for IPOs turns to mixed/selective. 12 firms debuted last week across accessible global regions, with the average (median) equally-weighted firm adding +15.04% (+0.77%) based on the difference between the final offering price and Friday’s close. Amid soaring risk (VIX: +43.79%), U.S. IPOs held up well with high-profile planning software company Anaplan (PLAN US: +42.42%) and former Kite Pharma executives’ new biotech startup Allogene (ALLO US: +48.94%) leaving a combined USD million 295.5 “on the table”, defined as the difference between the week’s close and final offering price based on initial number of shares issued. Sentiment abroad was more mixed with German brake system maker Knorr-Bremse (KBX GR: +1.55%) and Rocket Internet backed online furniture retailer Westwing (WEW GR: -9.73%), as well as Indonesian food and beverage company Garudafood (GOOD IJ: +112.62%) going public. Another 12 accessible firms are set to commence trading this week including Texas-based IT management software company SolarWinds (SWI US) and Tesla’s partner, French renewable energy firm Neoen (NEOEN FP). We also note that three highly anticipated IPOs including Dutch car leasing company LeasePlan, Portugal’s food retailer Sonae MC and Chinese music streaming giant Tencent Music all postponed their listings plan amid adverse market conditions.

Select IPOs traded (week: 10/08/2018) Domicile
Allogene Therapeutics Inc United States
Anaplan Inc United States
Knorr-Bremse AG Germany
Livent Corp United States
Midea Real Estate Holding Ltd China
Westwing Group AG Germany
Select IPOs expected (week: 10/15/2018) Domicile
 Grupo Financiero Mifel  Mexico
 Neoen S.A.  France
 Niu Technologies  China
 Shurgard Self Storage  Belgium
 SolarWinds  United States

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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