Last Week In Global IPOs: Strong Earnings Push IPOX U.S. Further Into Uncharted Territory

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Includes: FPX, GM, IWV, KORS, RAX
by: Josef Schuster

Summary

The IPOX Strategy Indexes rose last week, driven by big momentum in the IPOX U.S. IPO and spin-off universe, which continued its surge in uncharted territory. The Global value of corporate spinoffs set to increase to $400 billion in 2012, an increase of 92% from $200 billion in 2011.

Weekly Highlights

The IPOX Strategy Indexes extended the relative gains:The IPOX Strategy Indexes closed out the week with strong gains with the IPOX Global 50 ((IPGL50)) rising by +1.96% to +14.81% Year-To-Date, extending the relative YTD gain vs. benchmark MSCI World (MXWD) by +44 bps. to +501 bps. Performance within the IPOX Regional Strategy universe continued to diverge: In the United States, the IPOX U.S. IPO and spin-off ETF (TICKER: FPX surged +2.60% to +16.23% YTD and extended its relative gain vs. benchmark Russell 3000 (ETF: IWV to a massive +687 bps. YTD. Performance within the IPOX Europe universe was disappointing: The relaxation of short-selling constraints on Spanish banks put pressure on the IPOX Europe 50 (IPXUJPEU), which retreated by -0.31% to +9.06% YTD, lagging benchmark Stoxx 50 (SX5P). The IPOX Asia-Pacific 30 (IPTA) rose +2.69% to +14.88% YTD, outperforming the MSCI Asia-Pacific (MXPC) by +1.18%. Upside focus within IPOX Emerging Markets remained on the huge relative momentum in the IPOX Latin America universe (IPXULATT: +4.04% to +26.52% YTD) with the portfolio extending its relative gain vs. benchmark MSCI Latin America (MXLA) to +888 bps.

The continued big surge in the key U.S. and Latin America-domiciled IPOX heavyweights drove some of the outperformance with Columbia's Ecopetrol (EC: +8.11%) and U.S. carmaker General Motors (NYSE:GM) +7.22%, amongst the top performers. Red-Hot Cloud company Rackspace Hosting (NYSE:RAX) +9.11%, and Dec. 2011 IPO and hedge-fund heavy Michael Kors (NYSE:KORS) +24.95%, surged on strong corporate reports. Spanish bank Bankia (BKIA SM: -12.75%) fell to a fresh post-IPO low.

Key IPOX Strategy Indexes Returns YTD 2012:

Ticker (BBG/Reuters) Return

Week (%)

YTD 2012 (%) Name
IPGLC (USD) +2.00 +15.10 IPOX Global Comp
IPGL100 +2.36 +14.92 IPOX Global 100
IPGL50 +1.96 +14.81 IPOX Global 50
IPGL30 +1.72 +13.28 IPOX Global 30
IPXO +2.60 +16.00 IPOX U.S. 100
IPXT +2.16 +13.31 IPOX U.S. 30
IXTE (EUR) -0.52 +7.31 IPOX Europe 30
IPXUJPEU (EUR) -0.31 +9.06 IPOX Europe 50
IPTA +2.69 +14.83 IPOX Asia-Pac. 30
IPXUEM +2.62 +18.51 IPOX Emerging Mkts.
IPXUBRIC +2.94 +21.50 IPOX BRIC 25
IPXUCHCP +2.30 +17.27 Chin IPOX Comp.
CNI +2.36 +15.23 China IPOX 20
IPXUCAUP +1.19 +7.72 China IPOX Comp.
IPXULATT +4.04 +26.52 IPOX LatAm 20
IPXK30K (KRW) +1.63 +2.78 IPOX Korea 30
Click to enlarge

Most significant IPOs launched (week 02/13/2012)

Company Ticker Return / IPO (%)
Adocia SAS ADOC FP -2.46%
Beijing Leadman Biochemistry 300289 CH 20.62%
Brightcove Inc BCOV US 30.00%
Bringspring Science and Tech 300290 CH 59.05%
EOS Imaging SA EOSI FP -8.30%
Hexa Byte XABYT TU 90.00%
Inside Secure SA INSD FP 10.84%
Longmaster IT 300288 CH 92.60%
Neuros Co Ltd 126870 KS 31.76%
Ozak Gayrimenkul Yatirim OZKGY TI -1.20%
Shandong Gettop Acoustic Co 002655 CH 39.09%
Shantou Dongfeng Printing Co 601515 CH 19.77%
Shenzhen Mason Technologies 002654 CH 38.25%
Universal Scientific Industrial 601231 CH 53.03%
Click to enlarge

14 global IPO launched last week with the average (median) deal rising a strong +33.79% (+30.88%) based on the final offering price on the week. After much seasonally motivated delay, domestic China A Share activity picked up with 6 deals priced and each rising strongly above offering. Notable is the launch of 3 small-cap French IPOs, a potential sign of a pick-up in the European ECM deal flow.

Week Ahead (02/20/2012): Global deal flow

Company Code Country Lead Manager
SaraminHR Co Ltd 143240 KS Korea Hyundai
Maxvalu Kyushu Co 3171 JP Japan Nomura
MCExchange India MCX IN India C, MSIN
Bazaarvoice Inc BV US U.S.A. CS, DB
Christine Intern. 1210 HK China BNP, DBSA
Proto Labs Inc PRLB US U.S.A. Piper Jaffray
Sentoria Group SNT MK Malaysia AMINVB
Xiwang Special 1266 HK China CITI, JPM
Ceres Inc CERE US U.S.A. Barclays
China Stationery CSL MK Malaysia M&A Securities
Click to enlarge

A diversified mix of global IPOs are in this week's global IPO line-up. Amongst the stand-outs are fast-growing Bazaarvoice (BV US), the internationally focused U.S. domiciled internet software maker and Christine International Inc. (1210 HK), the operator of a chain of European style bakeries on the Chinese mainland. Citi/JPM-led China-based steel producer Xiwang Special Steel (1266 HK) priced its $200m IPO at the low end of the range.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.