Last Week In Global IPOs: IPOX-Linked ETF Extends Massive Rally - Global Deal Flow Strong

Includes: CG, FB, FPX, LPDX, TSLA
by: Josef Schuster

IPOX Indexes Weekly Summary

  • IPOX Indexes rise anew, led by the U.S. and Europe.
  • IPOX U.S. extends record run, broad rally in small/mid-caps on earnings.

Significant global deal flow lined up, U.S. in focus.

IPOX Returns, Notable Company Moves:

IPOX Indexes extend gains, IPOX U.S. at new record: The key IPOX Indexes continued to rally with particular focus on the IPOX U.S. and IPOX Europe universe, while select Emerging Markets exposure slumped.

On the global level, the IPOX Global 50 (IPGL50) - capturing USDbn 963 of global stock market cap of 50 large IPOs and Spin-offs over a four-year rotational cycle - rose +0.94% to +5.73% YTD, in line with benchmark MSCI World (MXWD). The narrower IPOX Global 30 (IPGL30) beat the broader IPGL50 by an unusually large margin (+81 bps.) on continued weakness amongst recent IPOs in Malaysia, last year's "hottest" global IPO market. IPGL50 counted USDbn 8.7 IHH Healthcare (IHH SP: -4.35%) or USD 16bn Petronas Chemicals (PCHEM MK: -3.50%) amongst its notable decliners.

Good earnings amongst the small- and mid-cap holdings propelled the IPOX-linked First Trust U.S. IPO Fund (ETF) to yet another record high (see Chart 1). Holdings with upside focus were 5/12 IPO Financial Carlyle Group (CG US: +10.92%) or electric carmaker 6/10 IPO Tesla Motors Inc. (TSLA US:+7.13%), both of which closed at a new weekly post-IPO high.

A good week in Facebook (FB US: +4.64%) ahead of earnings mitigated the impact of another weekly decline in U.S. carmaker General Motors (GM: -1.42%). The IPOX Europe universe (IPXUJPEU, IXTE) maintained its momentum on relative strength in 5/11 IPO global miner USDbn 44.1 Glencore International (GLEN LN: +3.36%).

IPOX Indexes Comparative Price Returns:

Ticker (BBG/Reuters) Week 2012 YTD 13
IPOX Global 50 (IPGL50) (NYSEARCA:USD) 0.94 24.17 5.73
IPOX Global 30 (IPGL30) 1.75 19.57 6.82
MSCI World (MXWD) 0.95 13.44 4.52
IPOX U.S. 100 (IPXO) 2.28 29.17 7.67
IPOX U.S. 30 (IPXT) 1.86 28.86 7.16
S&P 500 (SPX) 1.49 13.41 5.38
IPOX Europe 50 (IPXUJPEU) (EUR) 1.47 6.09 4.32
IPOX Europe 30 (IXTE) (EUR) 1.58 0.03 4.65
STOXX 50 (SX5P) (EUR) 0.97 8.78 3.17
IPOX Asia-Pacific 30 (IPTA) 0.39 28.77 3.99
MSCI Asia-Pacific (MXPC) -0.05 10.97 2.62
IPOX China 20 (CNI) -0.37 19.53 4.86
IPOX China Cp. (IPXUCHCP) -1.40 18.93 5.15
Hang Seng Enprs. (HSCEI) -0.86 15.09 4.95
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
IPXO Carlyle Group Mid +10.92 CG US
IPTA Nexon Inc. Mid +9.92 3659 JT
IPXT Michael Kors Large +9.46 KORS US
IPGL50 Facebook Large +4.64 FB US
CNI New China Life Large -8.94 1336 HK
IPTA Gree Inc. Mid -6.90 3632 JT
IPGL50 IHH Healthcare Large -4.35 IHH SP
IPGL50 Petronas Chemicals Large -3.50 PCHEM MK
IPGL50 General Motors Large -1.42 GM US

Significant IPOs Traded (Week: 01/18/2013)/Others:

Company Ticker Return/IPO/wk. (%)
Quali-Smart Holdings Ltd. 1348 HK 0.00
LipoScience Inc. LPDX US 16.11
Bright Horizons Family BFAM US 28.73

Just 3 notable IPOs started trading last week with the average (median) IPO gaining +14.95% (+16.11%). U.S IPOs continued to show most upside with USDbn 1.8 child and educational service provider Bright Horizons Family Solutions (BFAM US: +28.73%) in focus. China Vanke (200002 CH: +29.28%), Chinas largest real estate developer, surged after trading commenced on its B-to H-shares conversion announcement.

Upcoming global IPOs/Others:

Company Code Trading Comment
Stemline Therap. STML US 1/29 High risk biotech
KaloBios Pharma. KBIO US 1/29 High risk biotech
TRI Pointe Homes TPH US 1/30 1st Housing IPO in 8 years
Chinalco Mining 3668 HK 1/31 Priced at the Top
Zoetis Inc. ZTS US 2/1 Large, Strong Demand
Gladstone Land LAND US 2/1 CA Farmland IPO

We expect the respective U.S. deals (focus is on TPH US, ZTS US, LAND US) to continue to benefit from a high level of indiscriminate demand/positive feed-back trading for U.S. IPOs fueled by low risk and ample liquidity. In H.K., the IPO of Alumininum Corp. of China (2600 HK) spin-off Chinalco Mining (3668 HK) was priced at the upper end of the HKD 1.52-1.91 range, cementing the big change in the initial pricing sentiment for H.K. IPOs.

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.