The IPOX® Week, March 2, 2020

  • IPOX Indexes turn mixed during February, but outperform YTD as COVID-19 fears drive big selling wave in global equities.
  • IPOX China (CNI) adds +5.63% during last month.
  • IPO Deal-flow Review & Outlook: February concludes with solid deal flow and robust initial showing. GFL Environmental on track for its $1.5 billion IPO relaunch.

IPOX Indexes turn mixed February, but outperform YTD as COVID-19 fears drive big selling wave in global equities. IPOX China (CNI) the place to be as index adds +5.63% during February. Most IPOX Indexes lost ground during February, however, outperformed, as increasing fears over the impact of COVID-19 on economic growth drove massive selling in the derivates- and ETF-heavy global equity benchmarks towards month-end, while yields continued to plunge and equity risk spiked. On the global level, for example, the super-liquid, large-cap centric, diversified  IPOX Global (IPGL50) declined by -3.10% to -0.87% YTD last month, extending the relative lead vs. the global market to a large +831 bps. YTD. Big relative strength extended to the IPOX Indexes trading across other markets and regions, such as the IPOX International (ETF: FPXI, +961 bps.), IPOX 100 U.S. (ETF: FPX, +382 bps.) and IPOX 100 Europe (ETF: FPXE, +568 bps.). Notable was also the strong showing of the IPOX

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

China Core (CNI), which gained by +5.63% to +3.09% YTD last month, also significantly ahead of the local market. Here, big gains in little weighed small- and mid-caps centered around a core large-cap position drove the confoundingly strong showing, including medical devices maker AK Medical (1789 HK: +44.70% last month), property manager A-Living Services (3319 HK: +33.97%) and glass products maker Flat Glass (6865 HK: +33.87%). Amid the overall declines last month, notable upside recorded across other regions included online pet food retailer Chewy (CHWY US: +11.66%), electronic signature solutions provider Docusign (DOCU US: +9.94), HK-traded biotech Wuxi Biologics (2269 HK: +14.63%), photovoltaic technologies provider Solaredge (SEDG US: +27.45%), French lottery services provder FDJ (FDJ FP: +16.53%) and Sweden’s private equity firm EQT (EQT SS: +14.60%). Big monthly losses in online car seller Cargurus (CARG US: -28.50%), social media firm Snap (SNAP US: -22.91%), luxury car maker Aston Martin  (AML LN: -32.24%),  Brazil airline Azul (AZUL US: -28.92%) and 97% of all holdings in the IPOX Japan (IPJP: -11.36%), including Japan-traded revolving sushi restaurant chain operator Sushiro Global (3563 JP: -28.92%), weighed.

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) -3.10 27.93 -0.87
IPOX® International (IPXI)* (USD) -1.79 31.37 -1.26
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) -6.54 29.60 -4.74
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) -3.27 34.55 -0.66
IPOX® Nordic (IPND) -1.46 38.52 1.46
IPOX® 100 Europe (IPOE)* (USD) -6.17 30.97 -6.33
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) -5.48 4.41 -5.67
IPOX® China (CNI) (USD) 5.63 26.31 3.09
IPOX® Japan (IPJP)** (JPY) -11.36 37.91 -13.16

* 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): -4.63%; IPOX International (ETF: FPXI): -1.57%; IPOX 100 Europe (ETF: FPXE): -4.86%.

IPO Deal-flow Review and Outlook: February concludes with solid deal flow and robust initial showing. GFL Environmental on track for its $1.5 billion IPO relaunch. 3 firms commenced trading across the global regions last week with the average equally-weighted deal adding +20.73% based on the difference between the final offering price and Friday’s close. Airtel Africa’s spin-off Airtel Malawi (AIRTEL MW: +38.85%) broke the decade-long listing drought with the biggest ever IPO in Malawi, while PE-backed eyewear frame maker Inspecs (SPEC LN: 0.00%) closed flat and genetic therapy startup Passage Bio (PASG US: +23.33%) soared despite the U.S. market sell-off. The IPO pipeline remains steady during the first week of March with Canadian waste management firm GFL (GFL US), French games developer Bigben’s gaming business spin-off NACON (NACON FP), and British restructuring and insolvency specialist FRP Advisory (FRP LN) scheduled to debut. Other IPO News include: 1) German chemical giant BASF is set to continue with plans to IPO it’s oil & gas unit Wintershall’s during 2H IPO; 2) Lithuania prepares IPO of state-owned energy group Ignitis; 3) flash memory maker Kioxia (formerly Toshiba Memory) plans for $32 billion IPO in Japan by October;  4) SoftBank-backed food delivery firm DoorDash, Carlyle-backed B2B contact database ZoomInfo, Chinese bubble tea chain Naixue and African telecom group IHS Towers seek U.S. listing; and 5) K-pop group BTS’s label Big Hit Entertainment progresses toward IPO.
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