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Summary:

Big moves in global index spreads in favor of developed markets characterized the trading week. Amid this big divergence and strong earnings in key IPOX components, the IPOX Indexes continued to record gains. In seasonally quiet IPO markets, small-cap South Korean IPOs were the highlight. IPOs in China plunged.

Key IPO Debuts (Week 04/25/2011) - Focus South Korea - IPOs in China plunge:

IPOX Indexes Highlights:

  • The IPOX Global Indexes finished the shortened trading week with muted gains, as big weakness in BRIC countries and respective exposure pressured global IPOX Indexes spreads versus the key global benchmarks.

  • The IPOX Global 100 Index (IPGL100), highly liquid semi-passive global IPO performance benchmark, gained +0.85%, underperforming benchmarks S&P 500 (SPX) and MSCI World (MXWD) by 111 and 87 bps., respectively.

  • 55/100 companies in IPGL100 closed positive, with the average (median) IPO gaining just +0.51% (+0.29%).

  • Amongst the IPOX Sub-Indexes, the IPOX U.S. (IPXO, IPXT) and IPOX Asia-Pacific universe (IPTA) continued to strongly outperform: While positive earnings surprises in Lorillard (LO: +7.35%), Mead Johnson (MJN: +9.96%) or spectacular Ancestry.com (ACOM: +41.79%) propelled the IPOX-100 Index (ETF Ticker: FPX) to new all-time highs, big moves in H.K. traded IT provider GCL-Poly (3800 HK: +15.87%) and Japan-traded social networker Gree Inc. (3632 JP: +10.29%) helped the developed markets focused IPOX-30 Asia Pacific (+1.24% to +16.03%) to mitigate big losses amongst the China-linked H.K domiciled property developers to trade at multi-year highs. IPOX Indexes solely focused on emerging markets exposure suffered along with the benchmarks: The IPOX China 20 (CNI) fell -3.09% to +7.05% and the IPOX China 30 A Shares Index (IPXUCAUP) declined -3.31% to -0.37% YTD.

  • Amid continued weakness in Brazil, the IPOX 20 Latin America Index (-3.31% to -0.37%) fell anew, driven by big weakness in the Batista-held OSX (OSXB3 BS: -10.20%) and OGX (OGXP3 BS: -6.17%).

IPOX Indexes (YTD Performance Stats):

Key IPOX Indexes

Return

Week (%)

2011 Return YTD (%)

+/- Benchmark YTD

IPGLC (USD)

+0.76

+8.53

IPGL100 (USD)

+0.85

+8.36

IPGL50 (USD)

+1.07

+8.56

IPGL30 (USD)

+1.10

+9.88

WTD (EUR)

+0.08

+0.45

IPXO (USD)

+2.27

+12.06

Significant +

IPXT (USD)

+2.40

+11.40

Significant +

IXTE (EUR)

+1.13

+7.00

Significant +

IPXUJPEU (EUR)

+1.11

+6.73

Significant +

IPTA (USD)

+1.23

+16.02

Significant +

IPXUAPUS (USD)

-0.93

+15.43

Significant +

IPXUEM (USD)

-0.32

+3.97

IPXUBRIC (USD)

-2.60

-0.74

IPXUCHCP (USD)

-1.89

+8.33

Significant +

CNI (USD)

-3.09

+7.05

Significant +

IPXUCHAP (USD)

-3.74

-0.34

IPXUCAUP (USD)

-3.31

-0.37

Significant -

IPXULATM (USD)

-0.49

-1.74

IPXULATT (USD)

-0.74

-1.47

Company

Ticker

Return over IPO (%)

Hui Xian Real Estate

87001 HK

-9.35

Focus Lumber Bhd

FLB MK

116.67

Korea Engineering

023350 KS

19.01

Franklin Financial

FRNK US

20.40

e-future Co Ltd

134060 KS

66.41

TK Chemical Corp

104480 KS

3.00

  • In seasonally slow developed markets, 18 global IPOs priced last with the average (median) IPO gaining +9.75% (+2.75%) based on the final offering price on the week. Upside focus was on small local deals in South Korea and Malaysia, which all recorded solid initial performance.

  • The disappointing debut of Hui Xian Real Estate (87001 HK: -9.35%), the first CNY denominated IPO on the Hong Stock exchange, underlines the current malaise for Hong Kong IPOs: Big subscription losses in recent IPOs fuel a negative feed-back effect which leads to losses amongst current IPOs as participants retreat. We expect this to eventually open venerable buying opportunities for respective IPOs seeking to get priced.

  • In the Chinese A Shares market, 6 China A Share IPOs debuted last week. Initial IPO performance deteriorated at historical proportions with the average (median) IPO closing the week -10.12% (-12.63%) lower.

Upcoming IPOs (Week: 05/02/2011) - Test for IPOs in the U.S.:

Company

Ticker

Day

Lead

Magazine Luiza

MGLU3 BZ

5/2

ITABBA, BTG

Boingo Wireless

WIFI US

5/3

CS, DB

RPX Corp

RPXC US

5/3

BCLY, GS

Renren Inc

RENN US

5/3

CS, DB, MS

Sevan Drilling AS

SEVDR NO

5/3

PARETO

NetQin Mobile Inc

NQ US

5/4

Piper

Thermon Group

THR US

5/4

BCLY, JEFF

Voc Energy Trust

VOC US

5/4

MS, RJA

  • While IPO sentiment in accessible Hong Kong, Europe and inaccessible mainland China has deteriorated sharply, the positive sentiment for the scheduled U.S. IPOs looks to continue with IPOs such as Boingo (NASDAQ:WIFI), RPX (NASDAQ:RPXC), Renren (NYSE:RENN) unaffected and solidly oversubscribed.

IPOX Corporate:

  • IPOX is pleased to announce the addition of Industrial and Commercial Bank of China (ICBC), the world’s largest bank, to its growing list of licensing partners for the IPOX Indexes.

Source: Last Week in Global IPOs: Renren, Boingo on Deck

Additional disclosure: The IPOX Indexes and associated IPOX-linked investment products may be long and/or short aforementioned companies.