The IPOX® Week, May 3rd, 2021

  • IPOX® Indexes record solid April 2021 gains.
    1. IPOX® 100 U.S. (FPX) rises +4.21%% to +4.73% YTD.
    2. IPOX® International (FPXI) gains +3.06% to -1.72% YTD.
    3. IPOX® 100 Europe (FPXE) surges +6.76% to +3.18% YTD.
  • IPOX® SPAC (SPAC) drops -0.65% to -1.84% YTD, sentiment recovers towards month-end.
  • 75 global IPOs launch during April, raising $26.1 billion. U.S. leads, while Europe plays big catch-up. More deals lined up.

Summary: Amid lower risk (VIX: -4.07%), firm U.S. bonds and solid earnings across Europe and the U.S. propelling the broad-based benchmarks relentlessly higher, most of the IPOX® Indexes gained strongly during April. In the U.S., e.g., the IPOX® 100 U.S. (ETF: FPX), benchmark for U.S. IPO performance, added +4.21% to +4.73% YTD, -97 bps. less when compared to the S&P 500 (SPX), benchmark for U.S. stocks. Gains extended to markets abroad with the IPOX® 100 Europe (ETF: FPXE) adding +6.76% to +3.18% YTD, a strong +250 bps. ahead of its benchmark, while a better showing in China-linked stocks helped to cut the YTD losses in the IPOX® International (ETF: FPXI).

IPOX® 100 Europe Index (ETF: FPXE) since 2004:

IPOX® StockWatch: Big winner of the month was Germany-based biotech, Covid-19 vaccine maker 10/2019 IPO BioNTech (BNTX US: +72.43%), a portfolio holding in the IPOX® International (ETF: FPXI) and IPOX® 100 Europe (ETF: FPXE), massively closing its valuation gap vs. U.S. counterpart NASDAQ 100 (NDX) member Moderna (MRNA US: +36.54%) during the month. Other IPOX® Holdings in focus included Saudi-Arabia based hospital operator Dr. Sulaiman Al-Habib (SULAIMAN AB: +22.50%), Russian online recruitment serves platform operator Headhunter Group (HHR US: +21.14%) and U.S. based SPAC pretzel maker Utz (UTZ US: +18.43%). Amid increasing corporate actions activity in the IPOX® Universe, we also note the takeover of IPOX® 100 U.S. (ETF: FPX) holding medical research services provider PPD (PPD US: +22.09%) by U.S. life sciences company Thermo Fisher (TMO US: +3.04%). Companies recording significant losses on the month included U.S. biotech Revolution Medicines (RVMD US: -27.66%), Korean online marketplace Coupang (CPNG US: -15.10%) and Chinese online music streaming provider Tencent Music (TME US: -14.98%).

Select IPOX® Indexes Price Returns (%) 2020 April 2021 YTD
IPOX® Indexes: Global/International
IPOX® Global Super Liquid (IPGL50) (USD) 66.63 1.38 2.70
IPOX® International (IPXI) (USD) (ETF : FPXI) 72.15 3.06 -1.72
IPOX® Indexes: United States
IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX) 47.32 4.21 4.90
IPOX® ESG (IPXT) (USD) 42.29 4.27 4.73
IPOX® SPAC (SPAC) (USD)** 48.52 -0.65 -1.84
IPOX® Indexes: Europe/Nordic
IPOX® 100 Europe (IPOE) (USD) (ETF: FPXE) 35.14 6.76 3.18
IPOX® Nordic Core (IPND) (EUR) 59.89 4.91 12.72
IPOX® Indexes: Asia-Pacific/China
IPOX® Asia-Pacific (IPTA) (USD) 47.50 4.11 0.09
IPOX® China Core (CNI) (USD) 88.02 1.24 -4.96
IPOX® Japan (IPJP)(JPY) 25.75 0.47 0.03

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

The IPOX® SPAC Index (SPAC) fell -0.64% in April, rising +45.80% since its 7/30/2020 launch. SPAC activity slowed down sharply with 13 new SPACs raising $2.79 billion, with most deals efficiently priced (Median initial return [+0.10%]). Biotech-focused CM Life Science III (CMLTU US) was the largest (and initially best performing) deal. 3 SPACs completed mergers and began trading, including dMY Technology Group II (with UK-based sports betting data provider Genius Sports [GENI US)), New Providence (with space-based cellular broadband network AST SpaceMobile [ASTS US]), and Replay Acquisition (with mortgage lender Finance of America [FOA US]). 19 SPACs announced merger targets with some of high-profile firm including the world’s largest SPAC merger: SoftBank-backed Southeast Asia ride-hailing and food delivery giant Grab & Altimeter Growth.

IPO Deal-flow Review and Outlook: 75 accessible IPOs went public in April, raising ca. $26.1 billion, with the average (median) equally weighted IPO recording an initial return of +19.66% (+10.00%). IPOs in the U.S. accounted for most of global deal flow with 32 IPOs (42.67%) and over $13.3 billion in proceeds raised (50.95%). Brazil surpassed Hong Kong to be the 2nd most active IPO market in April. European mutual fund distributor Allfunds Group (ALLFG NA), mobile app developer AppLovin (APP US), and Bankinter spin-off Spanish car insurance company Línea Directa (LDA SM) ranked on top. Other notable deals include the Direct Listing of crypto exchange Coinbase (COIN US), robotic process automation unicorn UiPath (PATH US), Tencent-backed fintech Linklogis (9959 HK) and the biggest IPO since SoftBank in Tokyo HR firm Visional (4194 JP). Japanese micro-cap optical device manufacturer Oxide (6521 JP) scored the best on the first day. More IPOs in pipeline include Chinese e-commerce giant JD spin-off JD Logistic, German-based open-source software vendor SUSE, Canadian chip maker Alphawave, oat milk maker Oatly, and Jessica Alba’s baby and beauty products company Honest.

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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