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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 (10/22/12): As U.S. Weakens, China IPOs Build Momentum !!!

    SUMMARY:

    Most IPOX Strategies rose during option expiration, with momentum in IPOX U.S. dented by the big underperformance in the Nasdaq-100 after weak earnings. Amid surging mid-caps and relative strength across Asia-Pacific markets, new China-linked IPOs rise strongly.

    HIGHLIGHTS:

    · Select IPOX Strategies rise, IPOX U.S. lags for third week: Amid continued relative strength in Asia-Pacific and China-linked markets, the IPOX Global 50 Strategy (IPGL50) rose +1.40% to +17.02% YTD, outperforming benchmark MSCI World (MXWD) by +19 bps. In the cross-section of the IPOX Strategies universe, the IPOX Asia-Pacific Strategy (IPTA) continued its record run, gaining +2.97% to +24.86% YTD. For another week, select IPOX mid-caps recorded fresh post-IPO highs, such as Japanese snack food maker USD 2.9bn Calbee (2220 JP: +2.49%), New Zealand's online marketplace USD 2.2bn Trade Me (TME NZ: +3.41%), USD 4.6bn French cosmetics group and 2010 Hong Kong IPO L'Occitaine International (973 HK: +3.86%) or USD 3.5bn 2011 spin-off Australian Treasury Wine Estates (TWE AU: +5.36%). With the USD 3bn IPO of Telefonica Deutschland (O2D GR) fully subscribed and recent IPOs RBS-linked Direct Line Insurance (DLG LN: +4.56%) trading well, the IPOX Europe Strategies (IXTE, IPXUJPEU) rose, but underperformed the benchmarks. 2011 Spanish spin-off USD 4.1bn Distribuidora Internacional (DIA SM: +2.41%) closed at a post-spin-off high. The big drop in U.S. mega-cap technology (MSFT, GOOG, INTC) after weak earnings with the Nasdaq-100 (NDX: -1.54%) falling sharply, pressured index spreads related to the S&P 500 (SPX) vs. the IPOX U.S. (IPXO, IPXT) for a third week: The IPOX U.S. 100 (ETF: FPX) lost -0.22% to +19.22% YTD, while the narrower and large-cap centric IPOX U.S. 30 (IPXT) gained +0.09%. Renewed weakness in IPOX heavyweight social networker Facebook Inc. (FB: -2.65%) and discount retailer USD 15.5bn Dollar General (DG: -4.22%) was mitigated by a good week in the U.S. refiners, including Phillips 66 (PSX: +1.64%) and Marathon Petroleum (MPC US: +1.18%). Amid weak tech earnings, we denote a high likelihood to the reversal of the multi-year Nasdaq-100 (NDX) leadership vs. the S&P 500 (SPX).

    · IPOX Strategy Returns YTD 2012:

    Ticker (BBG/Reuters)WeekQ3 12YTD 12
    IPOX Global 50 (IPGL50) (USD)+1.40%+7.31%+17.02%
    MSCI World (MXWD)+1.21%+6.24%+11.55%
    IPOX U.S. 100 (IPXO)-0.22%+7.09%+19.22%
    IPOX U.S. 30 (IPXT)+0.09%+5.39%+17.98%
    S&P 500 (SPX)+0.32%+5.76%+13.96%
    IPOX Europe50 (IPXUJPEU) (EUR)+1.26%+11.75%+6.75%
    IPOX Europe30 (IXTE) (EUR)+0.89%+11.76%+2.42%
    STOXX 50 (SX5P) (EUR)+1.85%+5.76%+8.57%
    IPOX Asia-Pacific 30 (IPTA)+2.97%+6.82%+24.86%
    MSCI Asia-Pacific (MXPC)+3.14%+2.56%+6.58%
    IPOX China 20 (CNI)+2.44%-1.96%+4.25%
    IPOX China Cp. (IPXUCHCP)+3.22%+3.18%+6.87%
    Hang Seng Enprs. (HSCEI)+3.27%+2.68%+7.52%

    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: Support and Research

    · Significant IPOs launched (Week: 10/15/2012 ):

    CompanyTickerReturn/IPO
    Astro Malaysia Holdings BhdASTRO MK0.00%
    EFG Financial Products AGFPHN SW4.70%
    Geo Energy Resources LtdGERL SP24.29%
    Religare Health TrustRHT SP-10.00%
    Borregaard ASABRG NO-2.86%
    Seadrill Partners LLCSDLP US10.77%
    Credito Real SAB de CVCREAL* MM-1.77%
    Sunley Holdings Ltd1240 HK30.68%
    Courts Asia LtdCOURTS SP-4.55%
    KFM Kingdom Holdings Ltd3816 HK22.06%

    13 companies debuted on the accessible markets with the average (median) IPO gaining +5.12% (0.00%) based on the difference between the week's close and final offering price. European IPOs Swiss small-cap Financial EFG Financial Products (FPHN SW: +4.70%) and Norway's specialized biochemical maker Borregaard (BRG NO: -2.86%) traded mixed. A surge in the small-cap Hong Kong IPOs including KFM Kingdom (2816 HK: +22.06%) and Sunley (1240 HK: +30.68%) cemented the improved momentum for China-linked IPOs whereby we continue to note the big momentum in the last China IPO listed in the U.S. online discount retail VIP Shop (VIPS US: +19.02%) which surged to a post-IPO high. While Russia's Promsvyazbank (14NZ LN) was cancelled, the largest IPO of the week, Astro Malaysia (ASTRO MK: +0.00%) debuted poorly.

    · Upcoming IPOs (Week: 10/22/2012):

    CompanyCodeDateLead
    AWA Paper Manu.3896 JP10/23Daiwa
    Coal AsiaCOAL PM10/23Abacus Capital
    HESS AGHEAG GR10/23Lbk BWberg
    Sanyo Trading3176 JP10/23Mitsubishi UFJ
    DecloutDLL SP10/24AMFR, CGC
    GaylinGHL SP10/25CIMB Bank
    Lehigh Gas PartnersLGP US10/25Raymond James
    Marathon PetroleumMPCX US10/25UBS
    WhiteWave FoodsWWAV US10/26BAML, CS

    A number of second-tier firms are set to debut during the upcoming week. Amongst the most notable deals rank three U.S. IPOs: With continued strong asset flows into the high-dividend paying Master Limited Partnerships (MLP) asset, Raymond James-led Lehigh Gas (LGP US) and Marathon Petroleum's (MPC) pipeline and processing unit (MPCX) are set to go public. USD 4bn U.S. food manufacturer Dean Foods (DF US) is listing some of its key brands via WhiteWave Foods (WWAV US), seeking to raise between USDm 280-320 for 100% of non-voting Class A Share ownership with proceeds going to pay down debt only.

    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.

    Oct 30 12:04 PM | Link | Comment!
  • The IPOX Q3 2012 Review: Amid Increasing Deal Flow, IPOX Strategies Beat Benchmarks !!!

    SUMMARY:

    All key IPOX Strategies outpaced the major benchmarks during Q3 2012, benefiting most from the central-bank induced policy to increase global risk appetite. With some landmark global IPOs successfully placed, Q4 global IPO activity is set at a solid pace with U.S. P/E backed IPOs in focus.

    HIGHLIGHTS:

    · Key IPOX Strategies outpace benchmarks during Q3 2012: Amid the concerted central bank action during the quarter, the IPOX Global 50 (IPGL50), proxy for the performance of the largest and most significant global IPOs and spin-offs over a four-year rotational cycle, rose +7.31% to +16.13% YTD, +107 bps. ahead of benchmark MSCI World (MXWD). In the cross-section of the IPOX Strategies universe, the IPOX Europe Strategies (IPXUJPEU, IXTE) outpaced the market by most, as European Financials re-bounded sharply. For example, the IPOX Europe 50 (IPXUJPEU) gained +1175 bps, outpacing the STOXX 50 (SX5P) by +599 bps, but still trailing YTD. The Developed IPOX Asia-Pacific Strategies (IPTA) were the second best relative performer on the quarter, outpacing benchmark MSCI Asia-Pacific (MXPC) by +426 bps. to a massive +1654 bps YTD. The IPOX U.S. (IPXO, IPXT) followed, recovering more than the losses suffered during Q2 2012, and closing at the highest quarterly level since inception of the IPOX Strategy in August 2004. The IPOX Strategies focusing solely on emerging markets IPO and spin-off exposure, gained with the IPOX China Composite (IPXUCHCP) leading the way. Amongst the notable performance drivers during the quarter were the U.S. traded refinery spin-offs, such as April 2012 Buffet-backed and hedge-fund heavy USD 29bn Phillips 66 (PSX US: +40.19%) and June 2011 spin-off USD 19bn Marathon Petroleum (MPC US: +21.53%). Further notable stand-outs within the IPOX Strategy universe included Dec. 2012 IPO high-end fashion group USD 10bn Michael Kors (KORS: +27.10%), cloud hosting tech firm USD 9bn Rackspace (RAX: +50.41%), USD 3bn Nationstar Mortage Holdings (NSM US: +54.18%) and private equity backed consulting firm USD 2bn Booz Allen Hamilton (BAH: +40.32%). Ahead of the listing of Mondelez International (MDLZ US), Kraft's (KFT US) international snack-food unit, Japanese snack food maker and March 2011 IPO USD 3bn Calbee (2229 JT: +34.94%) closed the quarter at a new post-IPO high. Notable changes in the IPOX Asia-Pacific universe (IPTA) also included red-hot mid-caps New Zealand's Trade Me (TME NZ: +8.31%) and Australia's Carsales.com (CRZ AU: +30.07%). Gainers also included the slew of recent small-cap Korean IPOs including YG Entertainment (122870 KS: +81.87%), STX Metal (071970 KS: +69.16%) or iNtRON Biotech (048530 KS: +60.48%). Amid IPOX's addition of Facebook (FB US: -27.99%) as a Top Holding, other social networking/gaming IPOs fell sharply, including Nexon (3650 JP: -33.10%), Zynga (ZNGA: -48.16%) and Groupon (GRPN US: -54.93%).

    · IPOX Strategy Returns YTD 2012:

    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 (Q3 2012):

    CompanyTickerReturn/IPO
    Japan Airlines Inc.9201 JP-4.75%
    Banco Santander MexicoBSMX US+13.30%
    IHH Healthcare MalaysiaIHH SP+15.45%
    Palo Alto NetworksPANW US+48.36%
    CITIC Heavy Industries601608 CH-19.49%

    146 significant IPOs launched last quarter, adding USD 96.5bn to global stock market capitalization. The average (median) IPO gained +21.82% (+8.00%) based on the difference between the final offering price and first close. 44 IPOs took place on the domestic Chinese exchanges, adding USD 18bn to local stock market cap.

    · Q4 2012 Start: Strong IPO and spin-off deal flow

    CompanyCodeCountryLead
    Berry PlasticsBERY USU.S.A.BCLY, CITI, DB
    Dave & BusterPLAY USU.S.A.JEFF, PJC
    FleetmaticsFLTX USU.S.A.BAML
    Javelin MortgageJMI USU.S.A.BCLY, CITI, CS
    LifelockLOCK USU.S.A.GS, BAML, DB
    LuxferLXFR USU.S.A.JEFF
    MondelezMDLZ USU.S.A.Spin-Off
    Regulus TherapeuticsRGLS USU.S.A.BMO, COWEN
    TalanxN/A GRGermanyCITI, DB, JPM

    U.S. IPOs are set to continue to dominate the global IPO deal calendar. Well established P/E backed Berry Plastics (BERY US) is a capital structure deal, aiming to sell a 26% stake for USDm 470-530 while Entertainment group Dave & Buster (PLAY US) seeks USD 108m for a 28% stake. Other U.S. deals likely to be well-received are Ireland-domiciled computer services firm Fleetmatics (FLTX US), Javelin Mortgage (JMI US), security service provider LifeLock (LOCK) or miner Luxfer (LXFR US). Analysts also rate the spin-off of Mondelez (MDLZ US), Kraft's (KFT US) international snack-food unit, as attractive.

    Ticker (BBG/Reuters)WeekQ3 12YTD 12
    IPOX Global 50 (IPGL50) (USD)-1.85%+7.31%+16.13%
    MSCI World (MXWD)-1.79%+6.24%+10.71%
    IPOX U.S. 100 (IPXO)-2.40%+7.09%+21.36%
    IPOX U.S. 30 (IPXT)-2.64%+5.39%+19.87%
    S&P 500 (SPX)-1.33%+5.76%+14.56%
    IPOX Europe50 (IPXUJPEU) (EUR)-2.15%+11.75%+4.57%
    IPOX Europe30 (IXTE) (EUR)-2..27%+11.76%+0.72%
    STOXX 50 (SX5P) (EUR)-2.67%+5.76%+6.27%
    IPOX Asia-Pacific 30 (IPTA)+0.15%+6.82%+21.73%
    MSCI Asia-Pacific (MXPC)-1.65%+2.56%+5.19%
    IPOX China 20 (CNI)+1.03%-1.96%-2.48%
    IPOX China Cp. (IPXUCHCP)+1.01%+3.18%+2.20%
    Hang Seng Enprs. (HSCEI)+0.27%+2.68%-1.06%

    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.

    Oct 08 2:37 PM | Link | Comment!
  • The IPOX Week (9/3/12): IPOX Records Big Relative Performance Jump !!!

    SUMMARY:

    The IPOX Strategies recorded big relative gains across all global regions towards month-end as major benchmarks consolidated and China-linked exposure slumped anew. No significant IPOs priced, traded and upcoming. Japan Airlines (9201 JP) sets indicative price range for massive re-IPO.

    HIGHLIGHTS:

    · Key IPOX Strategies record big relative gains across all of the IPOX universe:Despite strong declines in over weighted China-linked exposure, the IPOX Global 50 (IPGL50), fell just -0.24% to +13.00% YTD on the week, outperforming benchmark MSCI World (MXWD) by another +44 bps to +544 bps. YTD. The IPOX Global 50 (IPGL50), key gauge for the performance of the largest and most successful global IPOs and spin-offs over a four-year rotational cycle, benefited from a great relative week in the IPOX U.S. (IPXO, IPXT), IPOX Europe (IXTE, IPXUJPEU) and IPOX Asia-Pacific (IPTA) universe. Through modified stock selection, the IPOX Strategies remained unaffected by the continued slump in social networker Facebook (FB: -6.96%) or H.K. jeweler Chow Tai Fook (-6.55%). The most recent key global IPO, hospital operator IHH Health Care (IHH MK: +2.56%) rose to near a post-IPO high after good earnings. Within the IPOX Regional universe (IPXO, IPXT), the IPOX U.S. 100 (ETF: FPX) was the best performing U.S. benchmark, gaining +0.83% to +17.19% YTD on strength the IPOX heavyweights, including car maker General Motors (GM: +0.80%), credit card processor Visa (V: +1.26%) and Buffett-backed stocks, including discount retailer Dollar General (DG: +2.84%), refiners Phillips 66 (PSX:+1.55%) and Marathon Petroleum (MPC: +6.15%) At the same time, the narrower and large-cap centric IPOX U.S. 30 (IPXT) recovered strongly, gaining +11 bps. vs. the IPOX U.S. 100 (IPXO) to +16.34% YTD. The IPOX Europe universe (IXTE, IPXUJPEU) rose anew, with the broad IPOX Europe 50 (IPXUJPEU: +0.50%) beating benchmark Stoxx 50 (SX5P: -0.96%). A big rise in global miner and IPOX heavyweight Glencore International (GLEN LN: +5.20%) on Qatar/Xstrata helped. Spanish exposure rose, with embattled Financial Bankia (+13.17%) in focus. Specialty IT Spanish travel reservation systems operator USD 9.8bn Amadeus IT Holdings (AMS SM: +2.66%) gained to levels not seen since pricing a private placement of 6.7% of its shares outstanding three weeks ago. Across the developed Asia-Pacific universe, the IPOX Asia-Pacific 30 (IPTA) extended the relative gains to a 5th consecutive week with the index spread vs. benchmark MSCI Asia-Pacific (MXPC) rising by a +140 bps. to a massive +1349 bps. YTD, underlying yet again the asset allocation potential of Asia-ex China aftermarket IPO/spin-off investing. Weakness across the high-beta H.K. traded casino group Wynn Macau (1128 HK: -5.92%) and embattled IPOX heavyweight Financial Dai-Ichi Life (8750 JP: -7.00%) was mitigated by a good relative week in Singapore's CapitaMalls (CMA SP: +0.30%), USD 19.2bn fashion group Prada (1913 HK: +3.02%) or semi-conductor maker Avago Technologies (AVGO: +1.44%). Japan's snack food maker USD 2.5bn Calbee (2229 JP: +5.63%) rose to a new post-IPO high. Mainland China markets remained under pressure with the Shanghai Composite (SHCOMP: -2.13% to -6.91% YTD) falling for another week on continued gloom over domestic economic prospects. China-linked IPOX exposure slumped as a consequence, but outperformed the benchmark for a second week in a row. For example, the IPOX China 20 (CNI: -3.56%) rose +52 to +0.91 bps YTD. vs. benchmark HSCEI Enterprise (HSCEI: -4.08%). Financials linked to the Chinese mainland suffered most, with USD 5.6bn Evergrande Real Estate Group (3333 HK: -10.03%) and heavyweight Agricultural Bank of China (1288 HK: -6.84%) in focus. Interesting is the resilience of the two latest U.S. traded China-IPOs with small-caps including consulting firm Acquity Group (AQ US: +7.86%) and online retailer VipShop (VIPS US: +20.48%) recording a big week.

    · IPOX Long-only Strategy Returns YTD 2012:

    Ticker (BBG/Reuters)WeekQ2 12YTD 12
    IPOX Global 50 (IPGL50) (USD)-0.24%-8.13%+13.00%
    MSCI World (MXWD)-0.68%-6.35%+7.56%
    IPOX U.S. 100 (IPXO+0.83%-5.23%+17.19%
    IPOX U.S. 30 (IPXT)+0.94%-3.67%+16.34%
    S&P 500 (SPX)-0.32%-3.29%+11.85%
    IPOX Europe50 (IPXUJPEU) (EUR)+0.50%-10.75%+2.56%
    IPOX Europe30 (IXTE) (EUR)+0.80%-12.33%-1.05%
    STOXX 50 (SX5P) (EUR)-0.96%-3.16%+5.88%
    IPOX Asia-Pacific 30 (IPTA)-0.86%-5.69%+16.55%
    MSCI Asia-Pacific (MXPC)-2.26%-6.89%+2.94%
    IPOX China 20 (CNI)-3.56%-8.97%-5.79%
    Hang Seng Enprs. (HSCEI)-4.08%-10.12%-6.60%

    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 traded (Week 08/27/12):

    CompanyTickerReturn / IPO (%)
    No significant IPOs priced and traded

    No significant IPOs priced and commenced traded during the last week.

    · Book Building in Japan Airlines (9201 JP) starts:

    CompanyCodeCountryLead
    No significant IPOs expected to priced and trade

    No significant global IPOs are lined up for the upcoming week. In what promises to be an active Q4 for global IPOs, Japan Airlines (9201 JP) starts book-building for its massive max. USD 8.44bn IPO at a tight indicative price range of JPY 3500- JPY3790. Amid a big valuation discount to its peer (9202 JP), all proceeds of the GM-style (GM: +0.80%) re-IPO go to the government, which bailed out the firm in 2010.

    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.

    Sep 10 2:18 PM | Link | Comment!
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