The IPOX® Week, March 9, 2020

  • After week of steep drop, IPOX Indexes trade mixed. IPOX 100 U.S. (ETF: FPX) sheds -0.94% as sell-off extends to high-growth stocks. Gains in IPOX China Core (CNI) drives IPOX International (ETF: FPXI) to strong week.
  • IPO Deal-flow Review & Outlook: Canadian waste management firm GFL Environmental (GFL US) debuted. 3 deals expected this week as COVID-19 slows IPOs.

IPOX Indexes trade mixed: IPOX 100 U.S. (ETF: FPX) declines as sell-off extends to high-growth stocks; Gains in China-linked exposure drives IPOX International (ETF: FPXI) to strong week.  Amid widespread COVID-19 fears driving more historic buying in U.S. government bonds, higher U.S. equity risk (VIX: +4.56%) and a slump in the U.S. dollar, oil  and energy ahead of U.S. Futures and Options expiration, the IPOX Indexes traded mixed. While indiscriminate selling in high growth stocks pressured the IPOX 100 U.S. (ETF: FPX) by -0.94% to -5.63% YTD, all other IPOX Indexes rose. Most notable was another week of big (relative) gains for the IPOX China Core (CNI) which added +3.30% to +6.49% YTD, now a large +1002 bps. YTD ahead of its benchmark. Strong gains also extended to the IPOX International (ETF: FPXI) (see below Chart).

IPOX® International ETF (ticker: FPXI) Investing since 11/2015:

In individual portfolio holdings, significant declines in U.S. high-growth specialty stocks including car vending machine operator Carvana (CVNA US: -20.37%), security software maker Crowdstrike (CRWD US: -12.88%) and online advertising platform operator The Trade Desk (TTD US: -11.94%) weighed. Select Brazilian and European stocks also dropped sharply, including airline Azul (AZUL US: -16.41%), Financial XP (XP US: -10.56%), London-traded FOREX solution provider Finablr (FIN LN: -33.72%) and high-end car maker Aston Martin (AML LN: -21.33%). While the  IPOX 100 U.S (ETF: FPX) counted heavyweights IPO M&As grocery retail Kroger (KR US: +13.90%), chocolate maker Hershey (HSY US: +8.54%) and life science equipment maker Thermo Fisher (TMO US: +7.00%) as notable standouts last week, strong upside in hot pot restaurant chain Haidilao International (6862 HK: +8.32%) and seasonings maker Yihai International (1579 HK: +10.64%), Chinese logistics company ZTO Express (ZTO US: +13.38%), Nordic telecom Tele2 (TEL2B SS: +6.49%) and Singapore based software maker Sea (SE US: +11.74%) lifted sentiment in the IPOX International (ETF: FPXI).

Select IPOX® Indexes Price Returns (%) Last Week 2019 2020 YTD
IPOX® Indexes: Global/International
IPOX® Global (IPGL50) (USD) 1.02 27.93 0.14
IPOX® International (IPXI)* (USD) 2.78 31.37 1.48
IPOX® Indexes: United States
IPOX® Composite U.S. (USD) -0.26 24.64 -5.61
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) -0.94 29.60 -5.63
IPOX® Indexes: Europe/Nordic
IPOX® 30 Europe (IXTE) (EUR) 0.27 34.55 -0.40
IPOX® Nordic (IPND) 0.75 38.52 2.22
IPOX® 100 Europe (IPOE)* (USD) 1.73 30.97 -4.71
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 4.50 4.41 -1.42
IPOX® China (CNI) (USD) 3.30 26.31 6.49
IPOX® Japan (IPJP)** (JPY) 0.67 37.91 -12.58

* 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): -5.51%; IPOX International (ETF: FPXI): +1.16%; IPOX 100 Europe (ETF: FPXE): -4.21%.

IPO Deal-flow Review and Outlook: Canadian waste management firm GFL Environmental (GFL US) debuted. 3 deals expected this week as COVID-19 slows IPOs. 5 firms debuted trading across the global regions last week with the average (median) equally-weighted deal losing -3.95% (-0.36%) based on the difference between the final offering price and Friday’s close with Canadian waste hauler GFL (GFL US: -10.47%), French Bigben Interactive’s video game business NACON (NACON FP: -0.36%) and London-based corporate finance specialist FRP Advisory (FRP LN: 0.00%) closing at or below final offer. Only 3 firms are scheduled to IPO this week including Japanese staffing agency Forum Engineering (7088 JP), network service provider VisasQ (4490 JP) and US-based Pfizer-backed biopharma startup Imara (IMRA US). Other IPO News include: 1) music label Warner Music, shoemaker Cole Haan, science magazine publisher Springer Nature delay their IPOs amid market fears on coronavirus; 2) Tencent-backed online healthcare platform WeDoctor mulls $1 billion Hong Kong IPO on $10 billion valuation; 3) marketing software Zeta Global mulls IPO (again); 4) more Brazilian IPO filings include meatpacker Prima Foods, real estate company Alpahville Urbanismo, credit data provider Boa Vista SCPC, and parking lot operator Allpark. 5) Please also note the CME Group Special Executive Report re: the Reduction of the Minimum Price Increment of the E-mini IPOX 100 U.S. Index Futures Contract:

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