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 ((NYSE:V): +4.45%) closed the week at a new post-IPO high, recent IPOX addition U.S. social networker Facebook ((NASDAQ:FB): -3.46%) slumped in sympathy with U.S. gamer Zynga ((NASDAQ:ZNGA): -12.52%) after a revenue warning. Notable is the big performance bounce in IPOX heavyweight U.S. carmaker General Motors ((NYSE:GM): +9.01%) after key U.S. hedge funds reconfirmed long positions in the stock, as well as Chicago-based IPOX member Groupon ((NASDAQ: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) (NYSEARCA: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 (NYSE: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 ((NYSE:FLTX) US), with IPO investors in GS-led LifeLock ((NYSE: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 ((NYSE:RLGY) US), which was bought by Apollo Group ((NYSE: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 ((NYSE: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 ((NASDAQ:ICPT) US) and KYTHERA Biotech ((NASDAQ:KYTH) US). Other IPOs in the U.S. include Diamondback Energy ((NASDAQ:FANG) US), oil and gas explorer Linn Co. (LNCO US), semiconductor maker Ambarella ((NASDAQ:AMBA) US) or Dubai-based Amira Nature Foods ((NYSE:ANFI) US).
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.