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Josef Schuster
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Josef Schuster is the founder of IPOX Schuster LLC, a data driven financial technology firm specializing in Financial Products Design related to global IPOs and spin-offs (www.ipoxschuster.com). Our philosophy involves the classification of global IPOs ans spin-offs as a separate asset class.... More
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  • The IPOX Week (11/04/11): Groupon beats the CME, How value-conscious investors play social networking !!!
    SUMMARY:

    Global equities consolidated last week on Greeks political Zick-Zack and the MF Global bankruptcy. With domestic China catching a bid, the IPOX Strategies mostly outperformed. Key IPOs debuted successfully, underlining the positive global IPO sentiment. Gree's the best play. Small-cap IPOs lined up.

    HIGHLIGHTS:

    ·         Greek's political Zick-Zackand the MF Global bankruptcy motivated a broad-based consolidation in equities. Stronger domestic China and moderately positive U.S. employment numbers supported.
    ·         The IPOX Global Strategy portfoliosoutperformed for a second week, generally beating the benchmarks. E.g., the broader IPOX Global 50 (IPGL50) shed -2.62% to -5.18% YTD, beating the MSCI World (MXWD) by a large 129 bps. Korea Life (088350 KS: +14.87%) surged on back-back.  
    ·         Performance was solid within the IPOX Regional Strategies Portfolios. In the United States, the broad IPOX U.S. 100 (IPXO) shed -2.39% to +2.36% YTD, broadly in line with the S&P 500 (SPX) with big weakness in IPOX heavyweight General Motors (GM: -10.74%) on auto sales contributing to the big pull-back after the recent run-up. IPOX member and 2011 IPO Dunkin' Brands (DNKN: -6.71%) announced better-than-expected earnings alongside a secondary offering and fell on profit taking. With Germany's DAX Index (DAX: -5.99%) suffering big losses, the IPOX Europe Strategy Portfolio declined in line with the benchmark with Germany's Wacker Chemie AG (WCH GY: -10.12%) falling anew on declining prices of polysilicon. Upside focus on the week remained on the IPOX Asia-Pacific Universewith the IPOX Asia-Pacific 30 Strategy Portfolio (IPTA: -1.18% to +1.57% YTD) beating benchmark MSCI Asia-Pacific (MXPC) by a massive +398 bps. With the Macau-casino complex (Wynn Resorts, Sands China and SJM Holdings) trading supported, select Australian-traded exposure rose, including AUD 2.5bn Treasury Wine Estates (TWE: +1.55%). IPOX's long-run pick Japans Social Network Service Gree Inc. (3632 JP: +11.88% to +169.02% YTD)  rose t o a  post-IPO  high  on speculation of an overseas (US) listing, new product initiatives and Groupon's initial IPO valuation. At a P/E multiple of 34.77 and the potential for a China-linked growth spurt, IPOX member Gree Inc. (3632 JP) is far the best accessible and liquid global social networking/gaming stock.

    Key IPOX Strategy Returns YTD:
    Ticker (BBG/Reuters)
    Return
    Week
    Return
    YTD
    Name
    IPGLC (NYSEARCA:USD)
    -2.77%
    -11.29%
    IPOX Global Comp
    IPGL100 (USD)
    -3.17%
    -5.65%
    IPOX Global 100
    IPGL50 (USD)
    -2.62%
    -5.18%
    IPOX Global 50
    IPGL30 (USD)
    -3.73%
    -4.57%
    IPOX Global 30
    IPXO (USD)
    -2.39%
    +2.36%
    IPOX U.S. 100
    IPXT (USD)
    -2.97%
    +2.45%
    IPOX U.S. 30
    IXTE (EUR)
    -3.31%
    -15.43%
    IPOX Europe 30
    IPTA (USD)
    -1.18%
    +1.57%
    IPOX Asia-Pac. 30
    IPXUEM (USD)
    -2.64%
    -18.47%
    IPOX Emerging Mkts.
    IPXUBRIC (USD)
    -4.01%
    -24.03%
    IPOX BRIC 25
    IPXUCHCP (USD)
    -1.15%
    -18.04%
    China IPOX Comp.
    CNI (USD)
    -2.79%
    -18.95%
    China IPOX 20
    IPXUCAUP (USD)
    +2.60%
    -11.85%
    China IPOX Comp.
    IPXULATT (USD)
    -4.38%
    -16.69%
    IPOX LatAm 20
    IPXK30K (KRW)
    +3.06%
    +5.07%
    IPOX Korea 30

    Most significant IPOs launched (Week 10/31/2011):  

    Company
    Ticker
    Return / IPO
    Groupon Inc                                                                    
    GRPN US
    +30.55%
    Parkson Retail Asia Ltd
    PRA SP
    +34.04%
    ·    
    A total of 14 global IPOs commenced trading last week with the average (median) equally-weighted IPO gaining a strong +37.77% (32.30%). All significant accessible deals recorded strong gains. At its first trade, Groupon's (NASDAQ:GRPN) market-cap exceeded exchange operator CME Group (NASDAQ:CME), a 2002 IPO. Confidence is supported by the powerful return in 10/06 Hong Kong IPO USD 22bn Financial CITIC Securities (6030 HK) which extended its post-IPO gain to +23.76%.

    IPOs on the mainland China market remained well received: 6 companies commencing trading with the average (median) IPO gaining a strong 49.63% (44.07%).

    Week ahead – small/micro-caps lined up:
    Company
    Code
    Country
    Lead Manager
    Atlas Res.
    0231453Z IJ 
    Indonesia
    INDO, UBS
    Avigilon Corp
    AVO CN
    Canada
    Rmd. James
    Imperva Inc
    IMPV US
    U.S.A.
    DB, JPM
    NewLink Gen.
    NLNK US 
    U.S.A.
    CGC, SNW
    Lifetech Scientific
    8122 HK 
    Hong Kong
    PIPER

    Global micro/Small Caps are lined up for debut. We believe that Groupon (GRPN) paves the way for a successful debut of U.S. application Software maker Imperva (IMPV US) and biopharmaceutical company/cancer drug maker NewLink Genetics (NLNK US). China-based medical products maker Lifetech Scientific (8122 HK) is the only company set to debut in the Hong Kong market.
    Nov 07 12:33 PM | Link | Comment!
  • The IPOX Week (10/31/2011): Surge leaves IPOX Global on Top, Groupon set to debut !!!
    SUMMARY:

    Following positive China and Europe related news flow, foreign markets caught up to the positive U.S. equity sentiment in one of the biggest rallies in recent history. Plunging risk and a sliding dollar left the IPOX Global Indexes on Top. Significant global IPO deal flow expected for the upcoming week.

    HIGHLIGHTS:

    ·         Foreign markets caught upto positive U.S. sentiment in one of the most violent upside moves in recent history on positive China- and European news flow. Hardest-hit markets rose most with China-linked exposure the main beneficiary. Positive sentiment for U.S. stocks remained supported by good micro (earnings) and macro (U.S. economic) data. Amid plunging equity risk, the Dollar dropped significantly (worrying) and U.S. yields rose.
    ·         Notable U.S. index spread moves: Notable are big moves in U.S. Index spreads towards month end: The spread between the best performing Nasdaq-100 (NDX) - now trading at huge technical break-out levels - and worst performing Russell 2000 (RUT) moved 402 bps. in favor of the Russell 2000 (RUT) as investors flocked to risk.
    ·         The IPOX Global Indexes were the biggest beneficiaries, significantly beating the benchmarks. For example, the IPOX Global 30 Index (IPGL30) - capturing the performance of the largest and most liquid global IPOs and spin-offs over a four-year rotational cycle - rose +7.49% to -0.87% YTD, leaving the index 259 bps. YTD ahead of benchmark MSCI World (MXWD). The broader IPOX Global Indexes surged more with the IPOX Global 50 (IPGL50) gaining +7.92% to -2.62% YTD. IPOX Global benefited from the re-bound in emerging markets linked exposure with Brazil's Banco Santander (BSBR: 12.34%) or China's Evergrande (3333 HK: +40.00%) in focus. General Motors (GM: +8.62%) had another great week. 

    ·         Performance was solid within the IPOX Regional Indexes Group:  The IPOX U.S. Indexes traded in line to lower vs. benchmarks with the IPOX U.S. 30 (IPXT) extending its gains to +5.58% YTD. A big fall in 2011 IPO online vacation rental firm HomeAway (AWAY: -7.24%) on earnings dampened sentiment ahead of LinkedIn (NYSE:LNKD) earnings numbers. While the IPOX Europe universe traded in line with benchmarks, the IPOX Developed Asia-Pacific universe gaining a record +12.73% to +2.78% YTD. The index now trades a massive +1134 bps. and +1587 bps. YTD ahead of benchmarks MSCI Asia-Pacific (MXPC) and Hong Kong's Hang Send Index (HSI). While the index benefited from the big rise in the Macau-traded casino complex with Wynn Macau (1128 HK: +20.63%) and Sands China (1928 HK: +27.44%) in focus, we note the rebound in beleaguered IPOX heavyweight and 2010 Japan IPO Dai-Ichi Life (8750 JT: +16.73%) on a rating affirmation. The key IPOX Emerging Markets Strategy Indexes (IPOX China, IPOX BRIC, IPOX Latin America) all closed with gains larger than when compared to the benchmarks, while the IPOX Korea and IPOX China A Shares universe underperformed.

    Key IPOX Strategy Returns YTD:
    Ticker (BBG/Reuters)
    Return
    Week
    Return
    YTD
    Name
    IPGLC (NYSEARCA:USD)
    8.08%
    -8.76%
    IPOX Global Comp
    IPGL100 (USD)
    7.33%
    -2.56%
    IPOX Global 100
    IPGL50 (USD)
    7.92%
    -2.62%
    IPOX Global 50
    IPGL30 (USD)
    7.49%
    -0.87%
    IPOX Global 30
    IPXO (USD)
    4.20%
    4.87%
    IPOX U.S. 100
    IPXT (USD)
    2.98%
    5.58%
    IPOX U.S. 30
    IXTE (EUR)
    3.89%
    -12.53%
    IPOX Europe 30
    IPTA (USD)
    12.73%
    2.78%
    IPOX Asia-Pac. 30
    IPXUEM (USD)
    10.32%
    -16.26%
    IPOX Emerging Mkts.
    IPXUBRIC (USD)
    12.84%
    -20.86%
    IPOX BRIC 25
    IPXUCHCP (USD)
    17.23%
    -17.09%
    China IPOX Comp.
    CNI (USD)
    18.34%
    -16.62%
    China IPOX 20
    IPXUCAUP (USD)
    7.41%
    -14.09%
    China IPOX Comp.
    IPXULATT (USD)
    9.65%
    -12.88%
    IPOX LatAm 20
    IPXK30K (KRW)
    2.93%
    1.95%
    IPOX Korea 30

    ·      Most significant IPOs launched (Week 10/24/2011):   
    Company
    Ticker
    Return / IPO
    Polymetal International PLC
    POLY LN
    0.00%
    ·      Amid a large number of micro- and small-caps in Asia-Pacific, the most sizable accessible IPO belonged to Russia's gold and silver miner Polymetal (POLY LN) closing the week unchanged. In total, 18 IPOs debuted globally (including 3 in the China A shares market) with the average (median) IPO gaining a strong +31.55% (+17.63%). Micro-cap focus is on Ebook Initiative Japan (3658 JP: +130.00%), a seller of electronic books.

    ·      Week ahead – significant global deal flow:
    Company
    Code
    Country
    Lead Manager
    Atlas Res.
    0231453Z IJ
    Indonesia
    INDO, UBS
    Groupon Inc
    GRPN US
    U.S.A.
    CS, GS, MS
    Parkson Retail
    PRA SP  
    Singapore
     HSBC
    Rentech Nitro
    RNF US
    U.S.A.
    CS, MS
    A diversified and powerful mix of IPOs are set to benefit from the plunge in global risk which has left IPOX Global near unchanged YTD: Amid the huge "dispersion of opinion" over its valuation and offering characteristics able to elevate its price for the time being (discussed here), Chicago-based e-commerce company Groupon Inc. (GRPN US) is set to debut on Thursday, Nov 3rd. LA-based specialty chemicals company Rentech Nitro (NYSE:RNF) - a L.P. - rounds up the U.S. deal calendar. The IPOs of UBS-led Indonesia's Atlas Resources and Singapore-based Parkson Retail (PRA SP) provide further diversification opportunities to access Southeast Asian relative strength and consumer growth.
    Oct 31 11:35 AM | Link | Comment!
  • The IPOX Week (10/24/2011): Groupons historic low !!!

    SUMMARY:

    Global investors continued to flock to U.S. large caps at the expense of emerging markets during option expiration week on good earnings, another string of positive U.S. macro numbers and declining risk, hence a weaker U.S. dollar. Amid lackluster global IPO activity, IPOX U.S. continued to record big gains. Historic Low for Groupon.

    HIGHLIGHTS:

    ·         Global equities diverged sharply during U.S. option expiration week. In what appears safe haven, seasonally motivated asset allocation buying of U.S. large-cap and developed markets exposure with markets seemingly more insulated from European news flow, China-linked exposure underperformed by a big margin for another week. The IPOX portfolios traded mixed with IPOX Global Long/Short benefiting from another tumultuous week for China-linked consumer stocks as economic concerns weight on mainland and Hong Kong markets.

    ·         Much Ado about nothing – U.S. equities remain the place to be: The IPOX U.S. performed well with the IPOX U.S. 30 (IPXT) now trading well in positive territory YTD, gaining +0.94% to +2.51% YTD. The portfolio once again underlined its potential as it outperformed the Russell 2000 (RUT) and NASDAQ 100 (NDX) by between 94 bps and 246 bps. With heavyweight General Motors (GM: +0.94%) gaining for another week, top weight and dividend-heavy Kinder Morgan (KMI: +8.66%) rose after announcing a USD 21bn merger with El Paso Inc. (EP: +27.57%). Consumer staple Philip Morris (PM: +3.86%) helped to lift IPOX on better than expected earnings.
    ·         The IPOX Europe Portfolios lost some ground on continued relative weakness in key component global miner Glencore International (GLEN LN: -4.50%).

    ·         The IPOX Asia-Pacific 30 (IPTA: -3.71%) fell more than benchmarks HSI and (HSI: -2.57%) and the MSCI Asia Pacific Index (MXPC: -1.04%), reversing last weeks strong gains as the Macau-domiciled exposure suffered on news related to the cap in table numbers through 2013. Wynn Macau (1128 HK: -7.55%), Sands China (1928 HK: -3.23%) and SJM (880 HK: -13.82%) fell sharply.  

    Key IPOX Strategy Returns YTD:
    Ticker (BBG/Reuters)
    Return
    Week
    Return
    YTD
    Name
    IPGLC (NYSEARCA:USD)
    -0.96%
    -15.72%
    IPOX Global Comp
    IPGL100 (USD)
    -0.46%
    -9.25%
    IPOX Global 100
    IPGL50 (USD)
    -0.89%
    -9.85%
    IPOX Global 50
    IPGL30 (USD)
    -0.20%
    -7.79%
    IPOX Global 30
    IPXULSU (USD)
    1.95%
    -6.17%
    IPOX Global L/S
    IPXO (USD)
    0.90%
    0.64%
    IPOX U.S. 100
    IPXT (USD)
    0.94%
    2.51%
    IPOX U.S. 30
    IXTE (EUR)
    -0.90%
    -15.91%
    IPOX Europe 30
    IPTA (USD)
    -3.71%
    -9.02%
    IPOX Asia-Pac. 30
    IPXUEM (USD)
    -1.58%
    -24.45%
    IPOX Emerging Mkts.
    IPXUBRIC (USD)
    0.19%
    -29.81%
    IPOX BRIC 25
    IPXUCHCP (USD)
    -4.14%
    -30.36%
    China IPOX Comp.
    CNI (USD)
    -3.05%
    -30.38%
    China IPOX 20
    IPXUCAUP (USD)
    -5.49%
    -21.21%
    China IPOX Comp.
    IPXULATT (USD)
    -0.75%
    -20.69%
    IPOX LatAm 20
    IPXK30K (KRW)
    -1.24%
    -0.91%
    IPOX Korea 30

    ·      Amid big spread moves through the IPO life-cycle with “young” IPOs (e.g. Kinder Morgan) outperforming more seasoned IPOs (e.g. Wynn Macau, Sands China), the IPOX Global Long/Short strategy rose +1.95% while continuing to display negative correlation.
    ·      IPOX Emerging Markets (IPOX China, IPOX BRIC; IPOX Korea, IPOX Latin America)closed well supported versus the benchmarks with the IPOX China 20 (NYSE:CNI) and IPOX Latin America (IPXULATT) recording significant performance gains of between 75 bps. and 109 bps.
    ·      The mixed performance amongst the IPOX Regional Portfolios left the IPOX Global Portfolio slightly lower when compared to the global benchmarks: The IPOX Global 30,e.g,  (IPGL30: -0.20%) retreated slightly.

    Most significant IPOs launched (Week 10/17/2011):   
    Company
    Ticker
    Return / IPO
    Zeltiq Aesthetics Inc
    ZLTQ US
    20.15%
    ·      Just one significant deal launched last week with U.S. domiciled Zeltiq Aesthetics (ZLTQ US: +20.15%) in focus. The company specializing in non-invasive treatments to reduce body fat cut the initial IPO range and closed with a substantial gain (20.15%) from its final offering price.

    ·      Week ahead – Asian micro-caps lined up:
    Company
    Code
    Country
    Lead Manager
    3-D Matrix Ltd
    7777 JP
    Japan
    SMBC Nikko
    Korea Materials
    043290 KS
    Korea
    Hyundai Sec.
    Poletowin Pit
    3657 JP
    Japan
    Daiwa
    Technovator Int  
    1206 HK  
    Hong Kong
    PIPER
    Fornton Group  
    1152 HK  
    Hong Kong
    KINGST
    Kikuchi Seis.                                                            
    3444 JP  
    Japan
    Nomura  
    eBook Initiative                                                     
    3658 JP Equity
    Japan
    Daiwa  
    ·      With the exception of a slew of micro-caps hitting Asia, no deal flow is expected for The Americas and Europe.
    Historic Low for Groupon: We follow the filing of Groupon Inc. (NASDAQ:GRPN) to offer less than 5% of their equity in an IPO, a ratio amongst the lowest in U.S. IPO history. We expect pre-IPO investors to support the IPO by “averaging in” their exposure and expect this to be the new paradigm for (tech) IPOs leading up to the Facebook IPO with most upside going to pre-IPO investors.
    Oct 24 1:30 PM | Link | Comment!
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