The IPOX® Week, September 10, 2018

  • Weak U.S. Technology, Emerging Markets pressure IPOX Indexes during shortened U.S. trading week.
  • IPO Deal-flow Review & Outlook: 5 firms set to go public in the U.S. as Chinese electric vehicle maker NIO (NIO US) sets to re-open U.S. IPO window.

Weak U.S. Technology, Emerging Markets pressure IPOX Indexes during shortened U.S. trading week. Continued uncertainty about global trade amid weakness in U.S. Technology and a larger then expected rise in U.S. wages reported Friday pressured the IPOX Indexes last week. In the U.S., for example, the diversified FAANG-free IPOX 100 U.S. – benchmark for the performance of U.S. New Listings – declined by -205 bps. to +8.68% YTD last week, lagging the S&P 500 (SPX) and Russell 2000 (RUT) (by between -101 and -94 bps.), while leading the Nasdaq 100 (NDX) (by +73 bps). Weakness extended across the IPOX Indexes Universe to Europe (IXTE, IPND), Developed Asia-Pacific (IPTA, IPJP) and China (CNI). Amongst IPOX 100 U.S. (IPXO) portfolio holdings, declines were broad-based across size and industries with companies including U.S. social networkers Twitter (TWTR US: -13.33%) and Snap (SNAP US: -8.81%), communications equipment maker Arista Networks (ANET US: -10.67%) and recently issued signature solutions provider DocuSign (DOCU US: -8.81%) or infrastructure software maker Zuora (ZUO US: -7.36%) lagging significantly. IPOX holdings recording significant upside on the week included specialty exposure such as online personal shopping platform operator Stitch Fix (SFIX US: +10.25%), applications software maker Coupa Software (COUP US: +8.79%) or IPOX Europe (IXTE) heavyweight Dutch payments processor Adyen (ADYEN NA: +6.75%).

Select IPOX-linked Investment Products Performance Update: The USD billion 1.2 IPOX 100 U.S. (IPXO)-linked First Trust U.S. Equity Opportunities ETF (FPX) fell to +8.99% YTD last week, while its international counterpart (FPXI) declined to -3.71% YTD. Amongst the range of actively managed IPOX-linked long-only products, the Catalyst IPOX® Allocation Fund (OIPAX) fell to +14.25% YTD.

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) -2.60 28.59 2.02
IPOX International (IPXI)* -3.07 37.80 -4.60
Exposure: United States (USD) (Price)
IPOX U.S. Composite (IPXC)* -2.51 33.64 7.33
IPOX 100 U.S. (IPXO)* -2.05 26.04 8.68
IPOX 30 U.S. (IPXT) -1.95 26.63 4.63
Exposure: Europe/Nordic Region (EUR) (Price)
IPOX Europe 30 (IXTE) -2.12 19.27 2.26
IPOX Nordic (IPND) -1.28 17.91 0.55
Exposure: Asia-Pacific/China Region (USD) (Price)
IPOX Asia-Pacific (IPTA) -2.77 23.30 -0.37
IPOX China (CNI) -4.53 37.67 -6.17
IPOX Japan (IPJP) -4.18 N/A N/A

* 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: IPOU8].

IPO Deal-flow Review & Outlook: 5 firms set to go public in the U.S. as Chinese electric vehicle maker NIO (NIO US) sets to re-open U.S. IPO window. Only three (non-China A shares and non-local India) companies debuted last week across accessible global regions, with the average (median) equally-weighted firm declining by -5.99% (-8.16%) based on the difference between the final offering price and Friday’s close. While the first telecommunication company listed and the largest IPO ever in Ghana – USD million 696 Scancom/MTN Ghana (MTNGH GN: 0.00%) – traded flat after the launch, the two Japanese IPOs finished the week below final offer, suffering from generally weak market sentiment and a big spike in risk for Japanese micro/small-caps after the plunge in IPO incumbents such as real estate services providers Tateru (1435 JP: -68.74%) or Katitas (8919 JP: -19.72%). At least 8 firms are set to commence trading this week, with most focus on Shanghai-based NYSE-traded U.S. Chinese electric vehicle producer NIO (NIO US). The Goldman Sachs led, Tencent-backed EV startup – known as the Chinese Tesla (TSLA US: -12.74%) – seeks an initial valuation above USD billion 8 billion. Other China-linked deals of the week include Nasdaq-listed online pharmacy 111 Inc. (YI US), online entertainment content provider Nasdaq-listed Outoutia (QTT US), while Hong Kong listed deals include China Chunlai Education Group (1969 HK) and drug developer Hua Medicine (2552 HK).

Select IPOs traded (week: 09/03/2018) Domicile
Itochu Advance Logistics Investment Corp Japan
Narumiya International Co Ltd Japan
Scancom PLC Ghana
Select IPOs expected (week: 09/10/2018) Domicile
111 Inc China
NIO Inc China
China Chunlai Education Group China
Hua Medicine China
Navios Maritime Containers Inc Greece
Qutoutiao Inc China

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