The IPOX Strategies rose on the week but traded mixed vs. the benchmarks on profit taking in some of the key names after the big-run up and continued relative weakness in U.S. small-caps. With U.S. IPO deal flow set to continue to dominate, U.S. IPO debuts are decidedly mixed.
Key IPOX Strategies mixed on the week, IPOX U.S. fails to continue record run: Amid weakness in key constituents, the IPOX Global 50 (IPGL50) gained +0.89% to +17.16% YTD, lagging benchmark MSCI World (MXWD) by -73 bps. In the cross-section of the IPOX Strategies universe, only the IPOX Asia-Pacific Strategy (IPTA) continued its record run, gaining +0.29% to +22.08% YTD, extending the YTD lead vs. the MSCI Asia -Pacific (MXPC) to a massive +1716 bps YTD. With action in the Macau-domiciled Casino complex including Sands China (1928 HK: -3.63%) and Wynn Macau (1128 HK: -0.48%) decidedly bearish, IPOX Asia-Pacific Strategy stocks closed at new post-IPO highs, including Australia's 2011 spin-off AUD 3.5bn Treasury Wine Estates (TWA AU: +6.36%), New Zealand's 2011 IPO AUD 1.3bn TradeMe (TME NZ:+2.00%) or AUD 1.9bn 2009 IPO and recent IPOX addition Australia's Carsales.com (CRZ AU: +2.58%).
Other IPOX Strategies traded unchanged to lower vs. the benchmarks, with the IPOX U.S. (IPXO, IPXT) underperforming the S&P 500 (SPX) by between -35 (IPXO) and -26 (IPXT) bps.
While key component payment processor Visa ((V): +4.45%) closed the week at a new post-IPO high, recent IPOX addition U.S. social networker Facebook ((FB): -3.46%) slumped in sympathy with U.S. gamer Zynga ((ZNGA): -12.52%) after a revenue warning. Notable is the big performance bounce in IPOX heavyweight U.S. carmaker General Motors ((GM): +9.01%) after key U.S. hedge funds reconfirmed long positions in the stock, as well as Chicago-based IPOX member Groupon ((GRPN): +10.18%). Despite a slump in IPOX heavyweight global miner Glencore (GLEN LN: -2.19%), the IPOX Europe universe (IPXUJPE, IXTE) rose in line with benchmarks, thanks to a new post-IPO high in Spain's Amadeus IT Holding (AMS SM: +5.76%). despite large secondary offering activity just two months ago.
IPOX Strategy Returns YTD 2012:
|Ticker (BBG/Reuters)||Week||Q3 12||YTD 12|
|IPOX Global 50 (IPGL50) (USD)||+0.89%||+7.31%||+17.16%|
|MSCI World (MXWD)||+1.62%||+6.24%||+12.50%|
|IPOX U.S. 100 (IPXO)||+1.06%||+7.09%||+22.65%|
|IPOX U.S. 30 (IPXT)||+1.14%||+5.39%||+21.24%|
|S&P 500 (SPX)||+1.41%||+5.76%||+16.17%|
|IPOX Europe50 (IPXUJPEU) (EUR)||+1.83%||+11.75%||+6.49%|
|IPOX Europe30 (IXTE) (EUR)||+1.80%||+11.76%||+2.52%|
|STOXX 50 (SX5P) (EUR)||+1.86%||+5.76%||+8.25%|
|IPOX Asia-Pacific 30 (IPTA)||+0.29%||+6.82%||+22.08%|
|MSCI Asia-Pacific (MXPC)||-0.26%||+2.56%||+4.92%|
|IPOX China 20 (CNI)||+3.03%||-1.96%||+0.48%|
|IPOX China Cp. (IPXUCHCP)||+1.08%||+3.18%||+3.29%|
|Hang Seng Enprs. (HSCEI)||+3.50%||+2.68%||+0.29%|
Significant IPOs launched (Week: 10/01/2012 ):
|Berry Plastics Group||BERY US||-6.25%|
|Inretail Peru||INRETC1 PE||+3.00%|
|JAVELIN Mortgage I||JMI US||-1.25%|
|Luxfer Holdings||LXFR US||+10.20%|
Significant IPOs launched (Week: 10/01/2012 ):
10 notable global IPO launched last week, with the average (median) IPO gaining just +1.54% (+3.18%). Despite the rising markets, all significant upside U.S. action focused on just one stock ((FLTX) US), with IPO investors in GS-led LifeLock ((LOCK) US) finishing the week with significant initial losses. Kraft's ((KRFT) US) international spin-off USD 49.4bn Mondelez (MDLZ US: +2.81%) rose on the week. Germany's Talanx AG (TLX GR) debuted successfully, hopefully paving the way for more IPO deals on the European continent.
Upcoming IPOs (Week: 10/08/2012)
|Ambarella||AMBA US||U.S.A.||DB, MS|
|Amira Nature Foods||ANFI US||U.S.A.||DB|
|Diamondback Energy||FANG US||U.S.A.||Credit Suisse|
|Intercept Pharma||ICPT US||U.S.A.||BAML|
|KYTHERA Biopharma||KYTH US||U.S.A.||GS|
|Linn Co LLC||LNCO US||U.S.A.||C, RBCCM|
|Provident Agro Tbk||PALM IJ||Indonesia||DBS|
|Realogy Holdings||RLGY US||U.S.A.||GS, CS, JPM|
|Shutterstock Inc||SSTK US||U.S.A.||DB, JEFF|
|Workday Inc||WDAY US||U.S.A.||GS|
Amid continued relative weakness in U.S. small-caps, 9 more U.S. IPOs are lined up: The largest deal belongs to ex-Cendant spin-off re-IPO real-estate information provider Realogy ((RLGY) US), which was bought by Apollo Group ((APO) US) in 2007 in a deal valued at USD 8.5bn. The company now seeks to sell a 30.73% stake to repay debt, valuing the firm at between USDbn 3-3.5bn. Other "hotter" deals include DB-led image provider Shutterstock ((SSTK) US) - for which we expect demand to be robust given the USD 3.3bn purchase of Getty Images by 2012 IPO Carlyle Group (CG US) - and software maker GS-led Workday (WDYA US). With U.S. biotech's at an all-time high, we note the IPO of Intercept Pharma ((ICPT) US) and KYTHERA Biotech ((KYTH) US). Other IPOs in the U.S. include Diamondback Energy ((FANG) US), oil and gas explorer Linn Co. (LNCO US), semiconductor maker Ambarella ((AMBA) US) or Dubai-based Amira Nature Foods ((ANFI) US).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.