The IPOX® Week, February 24, 2020

  • Spreads move in favor of IPOX during U.S. option expiration week: IPOX Indexes record big relative performance jump.
  • Nordic the place to be as IPOX Nordic jumps +4.49%.
  • IPO Deal-flow Review & Outlook: Thailand’s retail giant Central Retail launched the country’s biggest-ever IPO. Light deal flow expected towards month end.

Spreads move in favor of IPOX during U.S. option expiration week: IPOX Indexes record big relative performance jump. The IPOX Indexes topped the weekly global equity indexes performance rankings last week, less affected than the benchmarks by the increasing COVID-19 containment fears rallying U.S. bonds and spiking U.S. equity risk (VIX: +24.85%). In the U.S., e.g., the FANG-free, broad-based IPOX 100 U.S. (ETF: FPX) shed just -0.13% to +7.71% YTD, extending the YTD lead vs. the S&P 500 (SPX)- benchmark for U.S. equities – by +113 bps. to +440 bps. YTD. Big

IPOX® 100 U.S. ETF (ticker: FPX) Investing since 04/2006:

relative gains extended to the IPOX International (ETF: FPXI) and IPOX Europe (ETF: FPXE). We also note a fresh weekly all-time high in the IPOX Nordic (IPND) which surged +4.49% to +14.99% YTD, pushed higher by a big rally in portfolio holdings application software maker Sinch AB (SINCH SS: +28.44%), real estate developer Samhallsbyggnadsbolaget i Norden AB (SBBB SS: +20.80%) and global toys and games maker Embracer Group AB (EMBRACB SS: +16.42%). Portfolio returns were more evenly distributed in the IPOX 100 U.S. (ETF: FPX). Here, 67/100 holdings closed last week in negative territory, with the average (median) equally-weighted constituent dropping by -0.97% (-1.22%), significantly more than when compared to the applied market-cap weighted IPOX 100 U.S. (ETF: FPX). Amid the big declines in mega-cap U.S. technology stocks (NDX: -1.84%), the sharp drop in application software maker Appian (APPN US: -18.67%), biotech Apellis Pharma (APLS US: -12.17%) and Chicago-based consumer staple Conagra (CAG US: -9.48%) after reporting weak earnings were almost offset by the surge in IPOX 100 U.S. (ETF: FPX) portfolio holdings car vending machine operator Carvana (CVNA US: +24.23%), electric car maker IPO M&A’s Tesla (TSLA US: +12.62%) and grocery retailer Kroger (KR US: +7.37%) which got a boost from news that Warren Buffetts Berkshire Hathaway (BRK/B US: +1.04%) initiated a stake in the firm during Q4/2019.

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 0.75 27.93 9.11
IPOX® International (IPXI)* (USD) 0.26 31.37 6.55
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) -0.13 29.60 7.71
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.99 34.55 10.54
IPOX® Nordic (IPND) 4.49 38.52 14.99
IPOX® 100 Europe (IPOE)* (USD) 0.69 30.97 3.67
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -1.04 4.41 1.65
IPOX® China (CNI) (USD) 0.32 26.31 6.58
IPOX® Japan (IPJP)** (JPY) -2.34 7.91 -2.57

* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOH0). Source: Bloomberg L.P.

IPOX ETFs 2020 YTD Returns: IPOX 100 U.S. (ETF: FPX): +7.97%; IPOX International (ETF: FPXI): +5.64%; IPOX 100 Europe (ETF: FPXE): +3.37%.

IPO Deal-flow Review and Outlook: Thailand’s retail giant Central Retail launched the country’s biggest-ever IPO. Light deal flow expected towards month end. 5 firms commenced trading across the global regions last week with the average (median) equally-weighted deal adding (losing) +11.18% (-0.12%) based on the difference between the final offering price and Friday’s close. What has been the country’s largest IPO, Thai’s retailer Central Retail (CRC TB: -1.79%) debuted poorly amid uncertainty over retail sales due to COVID-19, while E&P spin-off BW Energy (BWE NO: -0.12%) closed below its final offering price on the week and Brazilian construction engineering firm Priner (PRNR3 BZ: +49.30%) recorded big initial strength. Coming this week, Airtel Africa is set to spin off Airtel Malawi on the local exchange, PE-backed eyewear frames maker Inspecs (SPEC LN) joins the post-Brexit pipeline and Preclinical genetic medicine firm Passage Bio (PASG US) is added to the long list of “hot” biotech IPOs in the U.S. Other IPO News include: 1) Brazil state bank Caixa readies for its insurance unit IPO Caixa Seguridade; 2) more Brazilian upcoming IPOs include Carlyle-backed education unicorn Uniasselvi, shopping mall Almeida Junior and truck fleet BBM Logistica; 3) Investec confirms to spin off asset management unit Ninety One in mid-March; 4) Fortive’s industrial tech unit Vontier and Pfizer-backed biopharma startup IMARA joins U.S. pipeline.
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