The IPOX® Week, May 17th, 2021

  • IPOX® Indexes struggle anew as broader benchmarks catch up to volatility in growth stocks, weak China. Amid big U.S. gains towards the week-end, May expiration lined up.
  • IPOX® SPAC (SPAC) bid well as sentiment improves.
  • Market volatility takes toll on IPOs as deals cancel. Chinese microcap (EJH US) stuns with 12-fold increase on first day of U.S. trading.

Summary: Rising yields and risk (VIX: +12.70%) amid substantiated U.S. inflation fears triggered profit taking across the diversified benchmarks ahead of U.S. Option expiration week with the growth focused IPOX® Indexes recording declines anew. Weak China and big volatility in select U.S. and European portfolio holdings after earnings continued to weigh on IPOX® sentiment. Despite strong gains towards week-end, the IPOX® U.S. (ETF: FPX), e.g, benchmark for U.S. IPO performance, shed -2.91% to -3.45% YTD, lagging the S&P 500 (ETF: SPY), benchmark for U.S. stocks. Declines extended to markets abroad with the IPOX® International (ETF: FPXI) and IPOX® Europe (ETF: FPXE) all recording losses.

IPOX® U.S. Investing (ETF: FPXI) since 2006:

IPOX® StockWatch:  Select high growth stocks reporting earnings ranking towards the bottom of the weekly IPOX® performance rankings included marketplace operator 06/2019 IPO The RealReal (REAL US: -36.58%), insurance broker 05/2020 IPO Selectquote (SLQT US: -26.95%) and dating platform operator 02/2021 IPO Bumble (BMBL US: -26.16%), while regulatory overhang continued to pressure IPOX® International (ETF: FPXI) heavyweights Chinese  e-commerce platform operators 09/2018 IPO Meituan (3690 HK: -13.72%) and 07/2018 IPO Pinduoduo (PDD US: -11.56%). We note gains across select IPOX® Holdings linked to corporate actions including IPO M&A British investment services provider M&G (MNG LN: +8.55%, takeover target) and animal health care firm Elanco (ELAN US: +5.84%, activist investor interest). Ahead of more IPO activity in the region, IPOX® International (ETF: FPXI) portfolio holding 12/2017 IPO Abu Dhabi National Oil Company for Distribution PJSC (ADNOCDIS UH: +2.95%) closed at a fresh post-IPO high.

Select IPOX® Indexes Price Returns (%) 2020 Last Week YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 -3.95 -6.16
IPOX® International (IPXI) (USD) (ETF : FPXI) 72.15 -3.99 -7.51
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 -2.91 -3.45
IPOX® ESG (IPXT) (USD) 42.29 -1.99 -4.37
IPOX® SPAC (SPAC) (USD) 48.52 -0.29 -3.64
IPOX® Indexes: Europe/Nordic
IPOX® Europe (IPOE) (USD) (ETF: FPXE) 35.14 -4.04 -1.59
IPOX® Nordic Core (IPND) (EUR) 59.89 -5.41 5.78
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 -5.15 -7.00
IPOX® China Core (CNI) (USD) 88.02 -4.19 -13.14
IPOX® Japan (IPJP)(JPY) 25.75 -3.36 -3.55

* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOM1).

The IPOX® SPAC (SPAC) Index fell -0.29% last week to -3.64% YTD and +43.13% since its 7/30/2020 launch. SPAC news include: 1) 8 SPACs Announced Merger Agreements include (partially): a) Switchback II with e-scooter Bird;  b) Aurora with mortgage lender Better; c) Austerlitz II with casino games app Wynn Interactive, and d) Hennessy Capital V with self-driving truck Plus. 2) SPACs reportedly in talks include: a) travel booking app Omio; b) German content management platform Contentful and c) German conglomerate Thyssenkrupp’s hydrogen unit. 3) 4 new SPACs launched last week globally.

IPO Deal-flow Review and Outlook:   At least 12 IPOs launched across the global markets last week with the average (median) equally weighted deal adding +94.80% (+4.65%) based on the final offering price and respective Friday’s close. Three one-billion-dollar IPOs traded mixed with Korean SK Innovation’s battery material unit spin-off SK IE Technology (361610 KS: +34.29%) and one of the largest Thai IPO, CVC-backed microfinance company Ngern Tid Lor (TIDLOR TB: +10.96%) gaining, while Canadian chip maker Alphaware (AWE LN: -7.32%) fell in London. Chinese microcap E-Home Household Services (EJH US: +1100.00%) stunned with a twelve-fold initial gain. Multiple IPOs postponed across board amid market volatility including PE-backed German online car marketplace Meinauto, Brazilian hospital operator Athena Saúde, and Genworth’s mortgage insurance unit spin-off Enact (ACT US). Oat milk maker Oatly (OTLY US), EQT-backed German software developer SUSE (SUSE GR) and website designer Squarespace (SQSP US/Direct Listing) are lined up for this week. Other IPO news include: 1) personal finance startup Nerdwallet and Brookfield-owned car battery manufacturer Clarios file confidentially for a U.S. IPO; 2) French supermarkets operator Casino mulls IPO for its renewable unit spin-off GreenYellow; 3) commodities broker Marex plans IPO in London; and 4) Swedish car maker Volvo explores listing in Stockholm.

Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.

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