Weekly Summary:
IPOX Strategies record massive relative gains. Best relative performance YTD 2012.
Gains linked to stock selection and APAC momentum.
Jump in volatility not set to disrupt strong week in global ECM deal flow.
IPOX Returns, IPOs Priced and Upcoming:
All IPOX Strategies record massive relative gains:Strong earnings and Asia-Pacific momentum propelled the IPOX Strategies to their best relative week YTD 2012: On the global level, the IPOX Global 50 (IPGL50) rose +0.11% to +17.16% YTD, extending the relative YTD gain vs. the MSCI World (MXWD) by +176 bps. to +745 bps. Performance was driven by the Asia-Pacific IPOX heavyweights including insurer AIA Group (1299 HK: +3.34%) or the Macau-based casino complex including Sands China (1928 HK: 4.17%). Stock selection helped, including a big week for 5/12 IPO U.S. social networker Facebook (FB: +15.67%), added by IPOX just in September. In the cross-section of the 2250 member strong IPOX universe, the IPOX Asia-Pacific (IPTA) led anew, rising +0.66% to +25.67% YTD. Select IPOX mid-caps in the region recorded more fresh post-IPO highs, such as Japanese snack food maker USD 3.0bn Calbee (2220 JP: +4.99%), New Zealand's online marketplace USD 2.2bn Trade Me (TME NZ: +3.54%) or French cosmetics group and 2010 Hong Kong IPO L'Occitaine International (973 HK: +3.28%). Australian Treasury Wine Estates (TWE AU: -11.09%) fell sharply on an earnings warning and subsequent downgrades. IPOX Europe (IXTE, IPXUJPEU) traded well, with the IPOX Europe 50 (IPXUJPEU) leading benchmark Stoxx 50 (SX5P) by +65 bps. The IPOX U.S. universe (IPXO, IPXT) reversed three weeks of underperforming with a big relative jump, closing the week only marginally lower. The broad USD 400bn IPOX U.S. 100 (ETF: FPX) universe now significantly leads key indexes such as the S&P 500 (SPX), Nasdaq-100 (NDX) or Russell 2000 (RUT). Highlights of the week included aforementioned Facebook (FB) and new post-IPO highs in software firm NetSuite (N: +9.24%) and Buffet-backed refiner Phillips 66 (PSX US: +6.41%). Hedge-fund heavy baby food maker Mead Johnson (MJN: -11.71%) slumped after substantially reducing its forecast.
IPOX Strategy Returns YTD 2012:
| Ticker (BBG/Reuters) | Week | Q3 12 | YTD 12 |
| IPOX Global 50 (IPGL50) (USD) | +0.11% | +7.31% | +17.16% |
| MSCI World (MXWD) | -1.65% | +6.24% | +9.71% |
| IPOX U.S. 100 (IPXO) | -0.12% | +7.09% | +19.08% |
| IPOX U.S. 30 (IPXT) | -0.01% | +5.39% | +17.98% |
| S&P 500 (SPX) | -1.48% | +5.76% | +12.27% |
| IPOX Europe50 (IPXUJPEU) (EUR) | -0.79% | +11.75% | +5.93% |
| IPOX Europe30 (IXTE) (EUR) | -0.90% | +11.76% | +1.52% |
| STOXX 50 (SX5P) (EUR) | -1.55% | +5.76% | +6.90% |
| IPOX Asia-Pacific 30 (IPTA) | +0.66% | +6.82% | +25.67% |
| MSCI Asia-Pacific (MXPC) | -1.64% | +2.56% | +4.83% |
| IPOX China 20 (CNI) | -1.35% | -1.96% | +2.84% |
| IPOX China Cp. (IPXUCHCP) | -0.29% | +3.18% | +6.56% |
| Hang Seng Enprs. (HSCEI) | -1.76% | +2.68% | +5.16% |
| 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: Portfolio Construction Technology § Best in Practice: Investment Management Mandates |
Significant IPOs launched (Week: 10/22/2012 ):
| Company | Ticker | Return/IPO |
| Coal Asia Holdings Inc | COAL PM | 50.00% |
| HESS AG | HEAG GR | 0.00% |
| Lehigh Gas Partners LP | LGP US | 4.20% |
| MPLX LP | MPLX US | 23.64% |
| WhiteWave Foods Co | WWAV US | -1.47% |
Just 7 IPOs commenced trading last week with the average (median) IPO gaining +9.32% (0.00%). While Dean Foods' (DF) US) carve-out WhiteWave (WWAV) US: -1.47%) disappointed, upside focus in the U.S. remained on the "red-hot" MLP-related issues benefiting from indiscriminant flow into the "MLP-asset".
Upcoming global IPOs (Week: 10/29/2012):
| Company | Code | Date | Lead |
| Shanghai Fosun Pharma | 2196 HK | 10/30/12 | DB, JPM, UBS |
| Southcross Energy | SXE US | 10/30/12 | JPM, WFS, BCLY |
| Telefonica Deutschland | O2D GR | 10/30/12 | BAML, C, HSBC |
| Zespol Elektrowni Patnow | N/A PW | 10/30/12 | CS, ING, JPM |
| Pegasus Entertainment | 8039 HK | 10/31/12 | CICCHK |
| Delek Logistics | DKL US | 11/01/12 | GS, WFS |
| Restoration Hardware | RSTO US | 11/01/12 | GS |
| Singulex | SGLX US | 11/01/12 | PIPER |
| Taylor & Martin | TMG US | 11/01/12 | Oppenheimer |
| Express Transindonesia | TAXI IJ | 11/02/12 | JPM |
The recent jump in volatility is not set to disrupt IPO deal flow as firms in all global regions are set to commence trading: The largest deal belongs to the EUR 1.5bn IPO of Telefonica Deutschland (O2D GR). With lead underwriters Morgan Stanley, Deutsche Bank or Goldman Sachs notably absent from the consortium, the Spanish parent is selling up to 23.17% of the moderately growing company at a price range between EUR 5.5 and EUR 6.0 at a firm value of EURbn 6.1 - 6.7 or 1.22x - 1.33x of '11 revenues. The H-share offering of USD 3.2bn drug maker Shanghai Fosun Pharma (2196 HK and 600196 CH) has been priced at the low end, making it the first significant H.K. IPO this month with proceeds earmarked for acquisitions. The IPO may prove attractive to foreign investors seeking access to a key mainland - yet volatile - drug maker. With most proceeds going to pay down debt, growing U.S. luxury home furniture retailer Restoration Hardware (RSTO US) seeks to raise USDm 124 for 13.97%, valuing the firm at around USDm 890. Other U.S. small/mid-caps include MLP Southcross Energy Partners (SXE US), energy logistics firms Delek Logistics (DKL US), biotech Singulex (SGLX US) or Taylor & Martin (TMG US), an operator of a marketplace for pre-owned assets seeking to sell an unusually large 48.39%
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
