U.S./Europe recovered as a positive FED and U.S earnings outweighed weakness in Asia/Emerging Markets. With the IPOX Strategies mixed and IPOX U.S. celebrating its 6th anniversary with top returns, a large number of IPOs went public. More IPOs of U.S. private equity firms in the pipeline.
HIGHLIGHTS:
· IPOX Strategies mixed, ex-Asia rises:Contrary to last week, relative weakness amongst China-linked (IPXUCHCP) and developed Asia-Pacific (IPTA) exposure was mitigated by strength in IPOX U.S. and IPOX Europe. On the global level, the IPOX Global 50 (IPGL50) rose +0.20% to +18.25% YTD, underperforming benchmark MSCI World (MXWD) by 93 bps., remaining +831 bps. ahead YTD.
The regional IPOX Strategies diverged sharply: After celebrating the ETFs 6th anniversary, the IPOX-linked U.S. IPO and spin-off ETF (FPX) gained +1.85% to +19.77% YTD. The ETF has a five star Morningstar rating, and ranks within the top 10% of best performing ETFs YTD and on a 1,3 and 5-year basis according to Bloomberg.
New all-time highs in the hedge-fund heavy members including Philip Morris International (PM), Rackspace (RAX) and Visa International (V) contributed to the good showing. Recent non-IPOX stocks in "hot" sectors suffered, including U.S. social gamer Zynga (ZNGA) after earnings. The IPOX Europe Universe bounced against weak European benchmarks with the IPOX Europe 30 (IXTE) gaining +2.27% with Spain's Amadeus IT Holdings (AMS SM) reaching an all-time high. The IPOX Strategies focusing on Developed Asia-Pacific (IPTA) fell by -1.20% to +21.59% YTD. Weakness in 2010 IPO Japanese Financial Dai-Ichi Life (8750 JP) contributed to the decline. Notable is the big divergence in the Macau-based casino operators: While Wynn Macau (1128 HK) closed near post-IPO highs, Sands China (1928 HK) slumped on weak earnings. Against weakness in U.S. gamer Zynga, Japanese gamer and 12/2011 IPO Nexon (3659 JP) closed the week near a new post-IPO high.
Key IPOX Strategies Returns YTD 2012:
| Ticker (BBG/Reuters) | Return 5-day | YTD 2012 | Name |
| IPGLC (USD) | 0.77 | 14.33 | IPOX Global Comp |
| IPGL100 | 1.11 | 14.66 | IPOX Global 100 |
| IPGL50 | 0.20 | 18.25 | IPOX Global 50 |
| IPGL30 | 0.13 | 15.80 | IPOX Global 30 |
| IPXO | 1.85 | 19.26 | IPOX U.S. 100 |
| IPXT | 1.69 | 17.93 | IPOX U.S. 30 |
| IXTE (EUR) | 2.27 | 1.94 | IPOX Europe 30 |
| IPXUJPEU (EUR) | 1.87 | 4.83 | IPOX Europe 50 |
| IPXUEM | -0.33 | 14.63 | IPOX Emerging Mkts. |
| IPTA | -1.20 | 21.59 | IPOX Asia-Pacific 30 |
| IPXUBRIC | 0.04 | 13.25 | IPOX BRIC 25 |
| IPXUCHCP | -1.16 | 13.96 | Chin IPOX Comp. |
| CNI | 0.02 | 13.01 | China IPOX 20 |
| IPXUCAUP | 0.37 | 12.58 | China IPOX Comp. |
| IPXULATT | 1.33 | 13.41 | IPOX LatAm 20 |
| IPXK30K (KRW) | -2.04 | -4.83 | IPOX Korea 30 |
| 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: Index Technology § Best in Practice: Support and Research |
· Most significant IPOs launched (Week 04/24/12):
| Company | Ticker | Return / IPO (%) |
| Acquity Group Ltd | AQ US | -4.17% |
| Alpek SAB de CV | ALPEKA MM | 4.47% |
| Branding China Group Ltd | 8219 HK | 4.04% |
| Brunello Cucinelli SpA | BC IM | 49.68% |
| BTG Pactual Participations Ltd | BBTG11 BZ | 0.00% |
| Charm Care Corp KK | 6062 JP | 26.32% |
| China Zhongsheng Resources | 2623 HK | 0.00% |
| Cia de Locacao das Americas | LCAM3 BZ | -0.67% |
| ClearSign Combustion Corp | CLIR US | 7.00% |
| Edgen Group Inc | EDG US | -13.64% |
| Envivio Inc | ENVI US | 2.22% |
| Ginko International Co Ltd | 8406 TT | 12.88% |
| Haitong Securities Co Ltd | 6837 HK | 0.00% |
| People.cn Co Ltd | 603000 CH | 73.60% |
| UNICASA Industria de Moveis | UCAS3 BZ | 9.71% |
During the busiest ECM week YTD, the average (median) IPO gained +10.48% (+3.4%) based on the difference between the week's close and the final offering price. Amongst the accessible deals, upside focus was on Italian Luxury fashion maker big-brand Brunello Cucinelli (BC IM). Brazilian Investment bank BTG Pactual, a BSBR-like unit offering, had a disappointing debut. U.S. IPOs started mixed to lower with no love for China-linked IPOs in the U.S. (AQ). In the powerful A-Share IPO market, People.Cn (603000 CH), the website of the website of the China Communist Party newspaper The People's Daily, surged in huge volume
· The Week ahead - U.S. IPOs back to dominate:
| Company | Code | Country | Lead Manager |
| Carlyle Group | CG US | U.S.A. | GS, CITI, UBS |
| EverBank Fin. | EVER US | U.S.A. | BAML, CS |
| Pacific Coast Oil | ROYT US | U.S.A. | BAML, CITI |
| PetroLogistics LP | PDH US | U.S.A. | CITI, UBSINV |
| Tilly's Inc | TLYS US | U.S.A. | GS, BAML, PJC |
IPOs of U.S. domiciled deals are back in the spotlight during the upcoming week: Carlyle Group (CG), the U.S. private equity firm, offers non-voting units to the masses. It follows incumbents Blackstone (BX), Fortress Investment Group (FIG), recent OakTree Capital (OAK: -7.42%), Apollo Global (APO) or Och-Ziff (OZM). With no proceeds going to growth, apparel maker/distributor Tilly's Inc. (TLSY) pursues a capital structure event by selling a big 29.63% of the firm. Terms imply a valuation of 0.75-0.91 of 12-month sales, a 12-25% discount to listed Abercombie&Fitch (ANF).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
