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The IPOX® Week, September 25, 2017

  • IPOX 100 U.S. (IPXO) closes uneventful week at fresh all-time high. Fiat Chrysler (FCAU US) surges to record.
  • IPOX-linked ETF performance update: “FPX” gains to +18.03% YTD, “FPXI” consolidates to +38.52% YTD.
  • Global Deal-flow Review and Outlook: IPOs have strong week, more deals lined up across global regions.

IPOX 100 U.S. (IPXO) closes uneventful week at fresh all-time high. Fiat Chrysler (FCAU US: +7.74%) surges to record. Ahead of quarter-end, the IPOX Indexes closed the week well-supported, led by a good showing in the Apple Inc.-free (AAPL US: -5.00%) IPOX 100 U.S. (IPXO), which closed the week at a fresh all-time high. The IPOX 100 U.S. benefited from big strength in the lagging U.S. mid-and small-caps last week, with 60% of portfolio holdings finishing the week in positive territory. Most upside was recorded by hard-hit consumer data processor 06/2015 IPO Transunion (TRU US: +10.19%), rising in tandem with beleaguered Equifax (EFX US: +12.97%). With IPOX heavyweight car maker Fiat Chrysler (FCAU US) surging to a fresh record, strong gains were also recorded by recently added enterprise storage solutions provider Pure Storage (PSTG US: +6.54%), real estate website operator Redfin (RDFN US: +5.43%) or generic pharma maker Avexis (AVXS US: +4.58%), while health care services provider Teladoc (TDOC US: -9.04%) slumped. Performance amongst the most heavily weighted IPOX 100 U.S. holdings was clearly mixed: While drug maker IL-based Abbvie (ABBV US: +0.13%) managed to hold on to this year’s big gains, another week of gains for payment processor Paypal (PYPL US: +4.13%) was more than offset by renewed weakness in consumer staple Kraft Heinz (KHC US: -4.80%) slumping on fears of weak earnings. We note big moves in select exposure captured in the IPOX International (IPXI) last week including Financial China International Capital (3908 HK: +27.09%), E.ON (EONA GY: +1.68%)-Spin-off German utility Uniper (UN01 GY: +10.86%) or Hong Kong traded electronic components maker Fit Hon Teng (6088 HK: -19.34%).

IPOX-linked ETF performance update: “FPX” gains to +18.03% YTD, “FPXI” consolidates to +38.52% YTD. The respective IPOX-linked ETFs mirrored the performance of the underlying IPOX Indexes last week. For example, the USD million 864 First Trust U.S. Equity Opportunities ETF (FPX) added +0.66% to +18.03% YTD, while the USD million 23 First Trust International IPO ETF (FPXI) consolidated to +38.52% YTD. Both ETFs offer access to the “going public” effect in the largest and best performing global IPOs and Spin-offs, respectively.

IPOX Price Returns (%) Last Week Q2 2017 YTD 2017
Exposure: Global/International (xUS) (USD)
IPOX Global (IPGL50) 0.36 5.54 25.69
IPOX Global (IPGL30) 0.01 8.07 26.03
IPOX International (IPXI)* -0.05 9.24 36.10
Exposure: United States (USD)
IPOX Composite U.S. (IPXC)* 0.32 7.44 27.90
IPOX 100 U.S. (IPXO)* 0.57 3.86 17.40
IPOX 30 U.S. (IPXT) 1.00 4.62 19.38
Exposure: Europe/Nordic Region (EUR)
IPOX Europe (IXTE) 0.95 4.95 20.17
IPOX Nordic (IPND) 0.97 8.64 16.61
Exposure: Asia-Pacific/China Region (USD)
IPOX Asia-Pacific (IPTA) -0.20 2.99 15.68
IPOX China C. (IPXUCHCHP)* 0.20 10.06 32.66
IPOX China (CNI) -0.33 4.62 41.13

* 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: IPOs have strong week, more IPOs lined up across global regions: At least 11 accessible (non-China A shares and local India) firms commenced trading last week with the average (median) IPO adding +16.17% (+6.10%) based on the difference between the final offering price and the week’s close. The week’s largest deals, including South Africa based Steinhoff Africa Retail (SRR SJ: +6.10%), China-based logistics firm Alibaba-backed BEST Inc. (BSTI US: +20.50%) or Argentina domiciled travel website operator Tiger Global-backed Despegar.com (DESP US: +23.69%) all rose strongly, pointing to further positive IPO momentum to this week’s deals, including streaming video services provider CA-based Roku (ROKU US), China-based online insurance provider ZhongAn Online P&C Insurance (6060 HK) or educational services provider RYB Education (RYB US).

Select IPOs traded (week: September 18, 2017) Country
BEST Inc China
Celcuity Inc U.S.A
Despegar.com Corp Argentina
Kiddieland International Ltd Hong Kong
Krystal Biotech Inc U.S.A
Oasis Midstream Partners LP U.S.A
Sisram Medical Ltd Israel
Steinhoff Africa Retail Ltd S. Africa
Warehouse Reit PLC Britain
Zahrat Al Waha For Trading Co Saudi Arabia
Zai Lab Ltd China
IPOs set to debut (week: September 25, 2017) Country
Camil Alimentos SA Brazil
China Wan Tong Yuan Holdings Ltd China
Deciphera Pharmaceuticals Inc U.S.A
Infront ASA Norway
Nightstar Therapeutics PLC Britain
NuCana PLC Britain
PQ Group Holdings Inc U.S.A
Precision Tsugami China Corp Ltd China
Roku Inc U.S.A
RYB Education Inc China
Sigma Alimentos SA de CV Mexico
ZhongAn Online P&C Insurance Co Ltd China

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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