Summary: Stable U.S. yields and falling U.S. risk (VIX: -16.82%) amid solid sector specific earnings provided the ideal backdrop for the IPOX® Indexes to move significantly higher across the board last week. In the U.S., e.g, the IPOX® 100 U.S. (ETF: FPX), gauge for the performance of a diversified group of 100 U.S. IPOs and Spin-offs, added +4.24% to +2.31% YTD, significantly ahead of the S&P 500 (SPX) and Nasdaq 100 (NDX). Gains extended to markets abroad with the IPOX® International (ETF: FPXI) and IPOX® Europe (ETF: FPXE) adding +1.98 and +2.84%, respectively. Weakness across select China-linked consumer and technology stocks further pressured the IPOX China (CNI).
U.S. IPO Investing with the “FPX” ETF since 2006:
IPOX® StockWatch: Biggest beneficiary from the drop in equity risk were some of the (recently after earnings) hard-hit IPOX® 100 (ETF: FPX) Holdings, including alternative meat producer Beyond Meat (BYND US: +36.43%), online dating platform operator Bumble (BMBL US: +17.97%) and luxury goods marketplace The RealReal (REAL US: +16.08%). We also note the continued relative strength in smaller-sized IPOs, with U.S. sporting goods retailer $3.4 billion Academy Sports & Outdoors (ASO US: +8.14%), U.S.-based power transmission equipment maker $5.2 billion Gates Industrial (GTES US: +4.49%), Danish information technology solutions provider $5.8 billion Netcompany (NETC DC: +2.82%), British electrical components maker $5.5 billion Nvent Electric (NVT US: +2.78%) and $15.2 billion Saudi-based health care services provider Dr. Sulaiman Al Habib Medical (SULAIMAN AB: +10.27%) closing the week at fresh post-IPO highs. A big corporate action ahead of MSCI’s emerging markets index inclusion pressured Abhu-Dhabi based refiner Abhu Dhabi National Oil Co. (ADNOCDIS DH: -8.06%).
|Select IPOX® Indexes Price Returns (%)||2020||Last Week||YTD|
|IPOX® Indexes: Global/International|
|IPOX® Global Super Liquid (IPGL50) (USD)||66.63||2.09||-1.38|
|IPOX® International (IPXI) (USD) (ETF : FPXI)||72.15||1.98||-2.66|
|IPOX® Indexes: United States|
|IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX)||47.32||4.24||2.31|
|IPOX® ESG (IPXT) (USD)||42.29||4.07||1.70|
|IPOX® SPAC (SPAC) (USD)||48.52||0.00||-2.93|
|IPOX® Indexes: Europe/Nordic|
|IPOX® Europe (IPOE) (USD) (ETF: FPXE)||35.14||2.84||3.44|
|IPOX® Nordic Core (IPND) (EUR)||59.89||3.41||13.64|
|IPOX® Indexes: Asia-Pacific/China|
|IPOX® Asia-Pacific (IPTA) (USD)||47.50||2.18||-1.22|
|IPOX® China Core (CNI) (USD)||88.02||0.63||-7.93|
|IPOX® Japan (IPJP)(JPY)||25.75||1.41||0.44|
* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOM1).
The IPOX® SPAC (SPAC) closed flat last week at -2.93% YTD and +44.19% since its 7/30/2020 live launch. SPAC news include: 1) 6 SPACs Announced Merger Agreements include (partially): a) Foresight Acquisition with health population management group P3 Health Partners; b) Pioneer Merger with investing app startup Acorns; and c) Decarbonization Plus II with EV charger maker Tritium. 2) 3 SPACs Completed Merger: a) Northern Star with dog toys subscription box BarkBox (BARK: 6/2); b) Social Capital Hedosophia V with fintech unicorn SoFi (SOFI: 6/1) and c) Big Rock Partners with pharmaceutical firm NeuroRx (NRXP). 3) Companies reportedly in talks to pursue a SPAC listing include: a) fintech unicorn Stash; and b) Australian fintech Finder. 4) 5 new SPACs launched last week.
IPO Deal-flow Review and Outlook: At least 21 IPOs launched across the global markets last week with the average (median) equally weighted deal adding +30.30% (+21.79%) based on the difference between the final offering price and respective Friday’s close. JD.com logistic unit JD Logistics (2618 HK: +3.32%) and Steinhoff’s discount retail unit Pepco Group (PCO PW: +11.61%) both gained on billion dollar offer spin-off IPOs, while online employment marketplace ZipRecruiter (ZIP US: +16.72%) rose on its direct listing and specialty IPOs (e.g, FIGS US, FLYW US and PAY US) all were very well received. Amid the long Memorial Day holiday weekend, focus will shift to deals abroad, including Lucky Me instant noodles maker Laguna, Philippines-based Monde Nissin (MONDE PM). Other IPO news include: Amazon-backed electric truck maker Rivian, Carlyle-backed Netherlands-based specialty chemicals firm Nouryon, insurtech Bright Health, Chinese “Uber-for-Truck” Full Truck Alliance, NetEase’s music streaming unit Cloud Village, Forever 21 owner, retail Conglomerate Authentic Brands, semiconductor maker GlobalFoundries, and GLP logistics asset REIT all weigh for IPO.
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