Apple-free (AAPL US: +11.43%) IPOX Indexes record big relative return gains during expiration week. Relative returns of the Apple-free IPOX Indexes soared last week, with the IPOX Global 30 (IPGL30) – USD trillion 1 performance gauge for the largest and most liquid global IPOs and Spin-offs – gaining +1.04% to +3.91% YTD, a massive +194 bps. ahead of the global market. Big relative performance jumps extended across the universe of IPOX Regional Indexes: In the U.S., e.g., the IPOX 100 Index (IPXO), benchmark for the 5-star USD million 571 First Trust U.S. IPO Fund (FPX), rose +1.59% to +4.83% YTD, outpacing the S&P 500 (SPX) by +103 bps. The IPOX Indexes focusing on IPO and Spin-off exposure across Europe traded similarly strong with the IPOX Europe (IXTE) and IPOX Nordic (IPND) extending the relative local market-adjusted YTD gain by +173 bps. to +421 bps. YTD and +113 bps. to +975 bps. YTD, respectively, while IPOX Developed Asia Pacific (IPTA) and IPOX China (CNI, IPXUCHCP) also traded firm. Big gains in Spin-off-related IPOX heavyweights drove some of the relative gains, including Baxalta/Shire combination drug maker USD billion 60 Shire (SHPG US: +8.32%), payment processor USD billion 49 PayPal (PYPL US: +7.08%) and IT firm USD billion 37 HPE Enterprises (HPE US: +6.41%). Amid weakness in the Chinese benchmarks, we also note YTD highs in Chinese e-commerce behemoth USD billion 261 Alibaba (BABA US: +5.04%). Gyrations in global yields continued to put pressure on the slew of high-yielding utilities IPOs across New Zealand, with Mercury NZ (MCY NZ: -7.48%) or Meridian Energy (MEL NZ: – 6.33%) falling sharply.
|IPOX Returns (%) (P)||Week||2015||YTD 16|
|Exposure: Global/International (xUS) (USD)|
|IPOX Global 50 (IPGL50)||0.30||0.99||-1.16|
|IPOX Global 30 (IPGL30)||1.04||-0.96||3.91|
|IPOX Intern. (IPXI)*||-0.94||-5.85||-0.65|
|Exposure: United States (USD)|
|IPOX US Composite (IPXC)||1.65||-3.90||9.23|
|IPOX 100 U.S. (IPXO)*||1.59||1.57||4.83|
|IPOX 30 U.S. (IPXT)||1.90||4.91||6.15|
|Exposure: Europe (EUR)|
|IPOX Europe (IXTE)||-0.76||14.41||-5.62|
|IPOX Nordic (IPND)||-0.66||23.88||0.13|
|Exposure: Asia-Pacific (Developed) (USD)|
|IPOX Asia-Pacific (IPTA)||-1.82||-2.32||2.57|
|Exposure: China (USD) (x A-Shares)|
|IPOX China C. (IPXUCHCHP)||0.50||-14.45||4.96|
|IPOX China (CNI)||-1.12||-9.10||-3.78|
U.S. IPOs strong week. China Postal (1658 HK) set to price. Big U.S. deal flow lined up: At least seven accessible IPOs commenced trading last week with the average (median) IPO gaining +10.67% (+9.21%) based on the difference between the final offerings price and Friday’s close. All IPOs in the U.S. debuted strongly, with most upside focus on small-cap applications software maker Everbridge (EVBG US: +27.08%). To IPO market returns to norm this week, with at least 12 deals lined up to commence trading across the global regions. Top of the list rank IPOs set in the U.S. market, with most focus on Ashland (ASH US) spin-off Valvoline (VVV US), a seller of automotive and industrial lubricants and operator of quick lube centers. Other U.S. deals include low-cost beauty products maker e.l.f. Beauty (EFL US), ad platform operator The Trade Desk (TTD US) or Andreessen Horowitz-backed software developer Apptio (APTI US). In markets outside the U.S., we note the tentative re-opening of the U.K. IPO market with bowling center operator Hollywood Bowl Group (BOWL LN) set to go public. Pricing for the long-awaiting IPO of Chinese Financial Postal Savings Bank of China (1658 HK) is set for Wednesday 09/21. The firm is expected to raise up to HKD billion 62.71 at the top end of the HKD 4.68-5.18 range with deal debuting 09/28.
|IPOs (week of Sep. 12):||Ticker||Return (%)|
|Ausupreme International||2031 HK||1.82|
|Bank of NT Butterfield & Son||NTB US||5.32|
|CROSSTEC Group Holdings Ltd||3893 HK||14.67|
|Echo Polska Properties NV||EPP SJ||-0.14|
|Everbridge Inc||EVBG US||27.08|
|FB Financial Corp||FBK US||9.21|
|Noble Midstream Partners LP||NBLX US||16.71|
|IPOs (week of Sep. 19):||Ticker||Sector|
|AzurRx BioPharma Inc||AZRX US||Health Care|
|Novan Inc||NOVN US||Health Care|
|Trade Desk Inc/The||TTD US||Info Technology|
|elf Beauty Inc||ELF US||C. Staples|
|Capstar Financial Holdings||CSTR US||Financials|
|Hollywood Bowl Group PLC||BOWL LN||C. Staples|
|Jacobson Pharma Corp Ltd||2633 HK||Health Care|
|AC Immune SA||ACIU US||Health Care|
|Full Spectrum Inc||FMAX US||Info Technology|
|Valvoline Inc||VVV US||Industrials|
|Gridsum Holding Inc||GSUM US||Info Technology|
|Apptio Inc||APTI US||Info Technology|
|AzurRx BioPharma Inc||AZRX US||Health Care|
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.
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