Last Week In Global IPOs: Sea Change In H.K. IPO Sentiment

by: Josef Schuster

IPOX Indexes Weekly Summary

· IPOX Indexes extend gains as global risk declines.

· IPOX U.S. and IPOX Asia-Pacific at all-time highs.

· Sea change in H.K. initial pricing sentiment.

Busy week ahead for U.S. IPOs.

IPOX Returns, Notable Company Moves:

· IPOX Indexes Comparative Price Returns:

Ticker (BBG/Reuters) Week 2012 YTD 13
IPOX Global 50 (IPGL50) (USD) 1.44 24.17 4.46
IPOX Global 30 (IPGL30) 1.89 19.57 5.16
MSCI World (MXWD) 0.69 13.44 3.04
IPOX U.S. 100 (IPXO) 1.34 29.17 4.48
IPOX U.S. 30 (IPXT) 1.27 28.86 4.45
S&P 500 (SPX) 0.38 13.41 3.22
IPOX Europe 50 (IPXUJPEU) (EUR) -0.21 6.09 2.76
IPOX Europe 30 (IXTE) (EUR) 0.12 0.03 2.79
STOXX 50 (SX5P) (EUR) -0.21 8.78 2.71
IPOX Asia-Pacific 30 (IPTA) 0.73 28.77 3.40
MSCI Asia-Pacific (MXPC) 0.23 10.97 2.05
IPOX China 20 (CNI) 1.39 19.53 5.40
IPOX China Cp. (IPXUCHCP) 1.13 18.93 5.46
Hang Seng Enprs. (HSCEI) -0.80 15.09 3.55
Why choose IPOX to close the IPO/spin-off asset allocation gap?
§ Proven: Real-time performance over market cycles

§ Scalable and Stable: Clearly defined Philosophy

§ Patented: Portfolio Construction Technology

§ Best in Practice: Investment Management Mandates

· Notable IPOX Indexes Movers:

IPOX Index Name Size Change (%) Ticker
IPXUCHCP Vipshop Small +19.89 (NYSE:VIPS) US
IPXUCHCP Trauson Small +19.17 325 HK
IXTE Delta Lloyd Mid +16.26 DL NA
IPGL50 PICC Group Large +13.69 1339 HK
IPXO Nationstar Mortgage Mid +13.69 (NYSE:NSM) US
IPUXJPEU African Barrick Mid -19.24 ABG LN
IPXO Fusion-IO Mid -9.70 (NYSE:FIO) US
IPGL50 Large -7.61 MAIL LI
IPXT QEP Resources Large -6.15 (NYSE:QEP) US
IPGL50 PHILLIPS 66 Large -4.82 (NYSE:PSX) US

· Significant IPOs Traded (Week: 01/07/2013):

Company Ticker Return/IPO (%)
Pelayaran Nasional Bina Buan BBRM IJ -13.48
Saraswate Griya Lestari HOTL IJ +3.78
Sarana Meditama Metropolitan SAME IJ +13.75

Ahead of a busy week for U.S. IPOs, three Indonesian small-caps commenced trading, with the average (median) deal closing the week just +1.35% (+3.78%) higher.

· Upcoming global IPOs (Week: 01/14/2013):

Company Code Day Comment
Golden Wheel Tiandi 1232 HK Wed. Priced near Top/Range
Norwegian Cruise Lines (NASDAQ:NCLH) US Fri. Capital Structure Deal
SunCoke Energy Prtns. (NYSE:SXCP) US Fri. Unit Offering, MLP
CVR Refining LP (NYSE:CVRR) US Fri. Unit Offering, MLP
USA Compression Prtns. (NYSE:USAC) US Fri. Unit Offering, MLP

Led by U.S. companies, global IPO activity is set to significantly pick up during the coming week: UBS/Barclays/GS-led private equity owned Norwegian Cruise Lines (NCLH US), a leading global cruise line operator, seeks to raise USD 423.53 m for 11.74% of the company in a capital structure deal involving swapping equity for debt. Amid a big run-up in the stock market traded incumbents, the slowly growing company is valued at between USDbn 3.2-3.6 or ca. 1.38-1.55 2012 Revenues, in between USDbn 30.4 Carnival Cruises (CCL US) and USDbn 7.7 Royal Caribbean Cruises (RCL US). As money flows into the MLP asset class unabated, the launch of three more high-dividend paying MLPs (SXCP US, CVRR US and USAC US) points to "cluster dynamics" in the MLP sector. Due to strong H.K retail demand, niche real-estate developer Golden Wheel Tiandi (1232 HK) managed to price its HKDm 756 IPO towards the upper end of the bookbuilding range, marking a significant turn in H.K. IPO pricing sentiment. Given strong markets across, we expect a good reception to all of the above IPOs.

· Key IPOX Indexes extend gains: The IPOX Indexes remained the biggest beneficiary of the plunge in global risk as the VIX CBOE SPX Volatility Index (VIX) extended its 9-trading-day decline to -58.80%. All IPOX Indexes across global exposure and regions traded in line or outperformed the benchmarks. On the global level, e.g., the IPOX Global 50 (IPGL50) - capturing USDbn 953 of global stock market cap of a set of 50 large IPOs and Spin-offs traded in the aftermarket - rose +1.44% to +4.46% YTD, beating benchmark MSCI World (MXWD) by +75 bps to +142 bps. YTD. Gains were driven by strong momentum in all IPOX Regional Indexes with a focus on the IPOX U.S. (ETF: FPX), IPOX Asia-Pacific (IPTA) and IPOX China , while IPOX Europe (IXTE) traded in line with the benchmarks. In the IPOX U.S. , a good week in IPOX heavyweights currently "S&P 500-free" Facebook (FB US: +10.29%) and General Motors (GM: +1.67%) helped to mitigate the impact of a big decline in the "red-hot" U.S. 2012 refinery spin-off Phillips 66 (PSX US: -4.82%). Despite weakness in the regional (mega-cap heavy) benchmarks such as the Hang Seng Enterprise Index (HSCEI), the IPOX China (CNI, IPXUCHCP), composed of Hong Kong and the U.S.-traded stocks, rose. Big movers included U.S.-traded e-tailor Vipshop (VIPS US: +19.89%), one of only two China-domiciled IPOs in the U.S. last year, while 12/2012 H.K. IPO mainland China insurer USDbn 26 PICC Group (1339 HK: +13.69%) continued its big post-IPO performance jump, contributing to a sea change in the H.K. initial IPO pricing sentiment. Corporate actions in orthopedic device maker H.K. traded Trauson (325 HK: +19.17%) and Dutch insurer hedge-fund heavy Delta Lloyd (DL NA: +16.26%) caused a jump in these respective IPOX members.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.