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Amid rising equity risk, global equity benchmarks remained under pressure for the sixth consecutive week. The IPOX Indexes fell sharply as select individual names continued to plunge anew. Amid deal cancellations, global IPOs debuted mixed while key global specialty IPOs are lined up. Initial Sentiment for China A Share IPOs improved sharply.

IPOX Indexes:

  • The IPOX Global Indexes finished the week substantially lower, with the IPOX Global 100 Index (IPGL100) shedding 2.64% to +2.72% YTD, slightly more than the key global benchmarks. 76/100 index members fell, with the average (median) equally-weighted constituent losing 2.41% (-1.99%), 24 bps (65 bps) less than the applied market cap weighted index.
  • For yet another week, the index profile was characterized by big movements in the cross-section of the respective indexes on selling of long-only investor seemingly reducing equity risk exposure. The week’s biggest decliners included high-beta names such as U.S. based rare earth materials producer Molycorp (NYSE:MCP) after another secondary offering, 3D hardware maker RealD (NYSE:RLD) after strong earnings but “industry-fad fears” and unraveling UK’s retailer and “Super 2010 IPO” SuperGroup (OTC:SEPGF) . The continued plunge in China-related health care stocks is disconcerting, indicated by the steep decline in United Laboratories (3933 HK: -14.17%) and Sihuan Pharma (460 HK: -14.35%).
  • Most IPOX Regional Indexes traded in line to lower versus their respective benchmarks: While the IPOX U.S. universe (FPX: -3.12% to +4.39% YTD) traded higher vs. the Russell 2000 (RUT: -3.54%) and in line with the Nasdaq 100 Index (NDX: -3.11%), relative downside was in the red-hot IPOX Asia-Pacific 30 Index (IPTA: -2.99% to +7.92% YTD) as investors shift from risky assets. Strength
    in Gree Inc. (3236 JP: +4.57%), long-run IPOX pick and cheapest way to play global social networking, helped to mitigate the relative losses in the index. We note the week-end reports of a possible takeover of embattled IPOX key holding Eurasian National Resources (ENRC: -8.41%) by recent blockbuster IPO Glencore (GLEN LN).
Key IPO Debuts: (Week 06/06/2011):
Company
Ticker
Return / IPO (%)
Dragon Crown Co
935 HK
3.64%
Huaneng Renewables
958 HK
-2.80%
United Power
UP7 GR
-2.77%
Australis Seafoods SA
AUSTRALI CI
2.16%
Ericom Telekom
ERICO TI
25.35%
Fusion-io Inc
27.11%
Gibson Energy Inc
GEI CN
0.56%
Taomee Holdings Ltd
1.11%
  • 14 accessible global IPOs launched last week with the average (median) IPO gaining just 3.84% (+0.84%) based on the final offering price on the week. The cancellation of Australia’s ResourceHouse H.K. IPO and Atentos Spanish IPO as well as the disappointing debut of Huaneng Renewables (958 HK: -2.80%) underlines the increasing difficulty to bring larger deals to market and indicates the withdrawal of institutions from the IPO market. Interest for the small U.S. deals continued to gravitate towards IPOs with a dedicated U.S. domicile with Fusion-io Inc. (+27.11%) rising strongly, while Chinas Taomee Holdings (+1.11%) priced only after sharply revising its offering terms. Seven IPOs debuted in the Chinese A shares market with the average (median) IPO gaining +12.90% (+18.14%), a sharply positive turn in initial sentiment from the previous week.
Upcoming IPOs: (Week: 06/13/2011):
Company
Ticker
Day
Lead
Wanli International
900180 KS
6/13
Samsung Sec.
Leechem Co Ltd
131100 KS
6/14
SK Securities
Pandora Media Inc
P
6/14
CITI, JPM, MS
Adler Modemaerkte
ADD GR
6/16
Credit Agricole
Bankrate Inc
6/16
BAML, CITI, GS
Samsonite Intern.
1910 HK
6/16
GS, HSBC, MS
  • A number of unique global IPOs are lined up, with Pandora Media and private equity exit Bankrate notable U.S. domiciled small-caps. With private-equity backed luggage maker Samsonite (1910 HK) pricing at/near bottom of a revised range, we believe the difficulty to price larger global IPOs has the potential to adversely affect the upcoming H.K. IPO of “legacy IPO” Prada SpA, the fashion house, with a reduction of deal size and offering price being likely scenarios.
Key IPOX Indexes and Index Returns YTD:
Key IPOX Indexes
Return
Week (%)
2011 Return YTD (%)
+/- Benchmark YTD
IPGLC (usd)
-2.85
+1.52
IPGL100 (usd)
-2.64
+2.72
Significant+
IPGL50 (usd)
-3.05
+2.29
Significant+
IPGL30 (usd)
-3.10
+3.16
Significant+
WTD (eur)
-1.64
-2.10
IPXO (usd)
-3.12
+4.39
Significant +
IPXT (usd)
-3.17
+4.85
Significant +
IXTE (eur)
-1.97
+0.02
Significant +
IPXUJPEU (eur)
-2.31
-0.57
IPTA (usd)
-2.99
+7.92
Significant +
IPXUAPUS (usd)
-3.82
+6.99
Significant +
IPXUEM (usd)
-2.72
-2.63
IPXUBRIC (usd)
-3.23
-7.41
IPXUCHCP (usd)
-5.21
-2.82
Significant +
CNI (usd)
-4.40
-1.46
Significant +
IPXUCHAP (usd)
-0.72
-8.08
Significant -
IPXUCAUP (usd)
-0.97
-7.87
Significant -
IPXULATM (usd)
-2.96
-6.75
Significant -
IPXULATT (usd)
-3.09
-7.46
Significant -
Source: Last Week in Global IPOs: Will Markets Derail Prada?

Additional disclosure: The IPOX Indexes and associated investment vehicles may be long or short respective companies.