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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 (07/16/2012): Amid Global Pick-up In ECM Deal Flow, U.S. In Focus !!!

    SUMMARY:

    Key equity indexes rose as weakness in China-linked markets and a higher dollar failed to materialize in downside volatility in European and U.S. equities and was subsequently met by big short covering towards week-end. Indonesia beats H.K. in last week's SE Asian IPO race. Big brand U.S. deals in focus.

    HIGHLIGHTS:

    · Key IPOX Indexes mixed, trail benchmarks: With key DM benchmarks such as the S&P 500 (SPX: +0.16%) or DAX (DAX: +2.29%) substantially beating Asian and China-linked exposure, the IPOX Global 50 (IPGL50) fell -1.42% to +7.88% YTD, underperforming benchmark MSCI World (MXWD) by 88 bps on bigger relative China-linked exposure. Weakness was spread amongst the IPOX Regional universe: In the United States (IPXO, IPXT), the IPOX U.S. 30 (IPXT) fell -0.19% to +13.51% YTD substantially beating the broader IPOX U.S. 100 (IPXO) on relative declines in the Russell 2000 (RUT: -0.76%). We note the big jump in electric car maker and IPOX U.S. 30 holding takeover candidate Tesla Inc. (TSLA: +10.52%) amid strong hopes for its Model S and as a 13th mall store opened. Recent IPOs traded most heavily on the notorious pre-IPO exchanges suffered more declines with Facebook (FB: -3.18%), Zynga (ZNGA: -8.58%) or Groupon Inc. (GRPN: -7.70%) slumping news amid relative NASDAQ (NDX: -1.05%) weakness. Key IPOX holding Phillips 66 (PSX: +4.70%), added in April 2012, became another top IPOX stock held by Berkshire Hathaway (BRK/A US). In Europe, big declines in Spanish Financial Bankia (BKIA SM: -23.32%) was mitigated by strength amongst some of the key German IPOs Brenntag (BNR GY: +4.41%) and Kabel Deutschland (KD8 GY: +5.89%). Global miner Glencore International (GLEN LN: +2.03%) continued to recover on Qatar/XStrata (XTA LN: +1.53%) optimism. Developed Asia-Pacific (IPTA) remained jittery on selling in high-end luxury stocks including fashion maker Prada (1913 HK: -4.52%) and key IPOX holding Japanese Financial Dai-Ichi Life (8750 JP: -9.33%). The IPOX Asia-Pacific 30 (IPTA) lost -3.02% to +11.25% YTD, 52 bps. more than benchmark MSCI Asia-Pacific (MXPC). Amid strong H.K. IPO deal flow - in China-linked markets (NYSE:CNI) - the IPOX China 20 maintained its YTD relative gain vs. benchmark Hang Seng Enterprise Index (HSCEI), dropping -4.60% to -1.05% YTD.

    · IPOX Long-only Strategy Returns YTD 12:

    Ticker (BBG/Reuters)WeekQ2 12YTD 12
    IPOX Global 50 (IPGL50) (NYSEARCA:USD)-1.42%-8.13%+7.88%
    MSCI World (MXWD)-0.54%-6.36%+3.30%
    IPOX U.S. 100 (IPXO-0.70%-5.23%+12.94%
    IPOX U.S. 30 (IPXT)-0.19%-3.67%+13.51%
    S&P 500 (SPX)+0.16%-3.29%+7.89%
    IPOX Europe50 (IPXUJPEU) (EUR)+0.64%-10.75%-4.22%
    IPOX Europe30 (IXTE) (EUR)+0.91%-12.33%-8.07%
    STOXX 50 (SX5P) (EUR)+0.68%-3.16%+2.97%
    IPOX Asia-Pacific 30 (IPTA)-3.02%-5.69%+11.25%
    MSCI Asia-Pacific (MXPC)-2.54%-6.89%+1.08%
    IPOX China 20-4.60%-8.97%-1.05%
    Hang Seng Enprs. (HSCEI)-4.57%-10.01%-7.04%

    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

    · The Week ahead - Big Brand U.S. deals :

    CompanyCodeCountryLead
    Durata Therapeutics IncDRTX USU.S.A.CS
    Fender Musical Instr.FNDR USU.S.A.William Blair
    Five Below IncFIVE USU.S.A.BARC, JEFF
    Kayak Software CorpKYAK USU.S.A.DB
    Mastercraft International8146 HKH.K.LUEN, WRLDSC
    Palo Alto Networks IncPANW US EU.S.A.CITI, GS

    Global IPO focus shifts from SE Asia to the U.S. this week as a number of key deals are lined up: William Blair-led leading guitar maker Fender Musical Instr. (FNDR US) seeks to raise USD 160m for a large 40.64% of the firm. Its distribution reliance on Guitar Centers, with its debt rating outlook recently cut to "negative" by S&P, is a concern. Specialty retailer Five Below Inc. (FIVE US) focuses on retailing merchandise for teen- and pre-teen customers. At the mid-point of the range, it seeks to raise USD 134m for an 17.82% stake in the company. Highly anticipated Kayak Software (KYAK US) is an operator of a travel website and should benefit from the strong performance of its stock market traded incumbents such as IPOX member Trip Advisors (TRIP US). Underwriters DB and MS structured the deal to rise sharply, initially. Small-float internet security company Palo Alto Networks (PANW US) should also benefit from the current indiscriminate initial demand for mid-cap specialty technology IPOs. Home furniture maker micro-cap Mastercraft (8146 HK) is the only H.K. deal lined up.

    Most significant IPOs traded (Week 07/09/12):

    CompanyTickerReturn / IPO (%)
    Bank Pembangunan Daerah JawaBJTM IJ3.49%
    Bolina Holding Co Ltd1190 HK7.91%
    China Putian Food Holdings Ltd1699 HK22.86%
    China Yongda Automobiles Services3669 HK0.00%
    Gading Development Tbk PTGAMA IJ51.43%
    Global Teleshop Tbk PTGLOB IJ8.70%
    HomeTrust Bancshares IncHTBI US20.00%
    Inner Mongolia Yitai Coal Co3948 HK-0.12%
    MNC Sky Vision Tbk PTMSKY IJ1.97%
    Qualipak International Holdings Ltd1332 HK-22.64%
    Sheen Tai Holdings Grp Co Ltd1335 HK13.33%
    Silverman Holdings Ltd1616 HK-0.91%
    Tri Banyan Tirta Tbk PTALTO IJ78.57%
    Wanguo International Mining Group3939 HK2.51%

    24 companies commenced trading last week, underlining the big-turnaround in the global IPO market since Facebook (NASDAQ:FB). The average (median) IPO rose a strong +25.61% (+10.35%). Initial IPO sentiment diverged sharply: While the average (median) H.K. deal rose +2.87% (+1.86%), the Indonesian counterpart soared +28.83% (+8.70%).

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 23 4:00 PM | Link | Comment!
  • The IPOX Week (7/9/12): Big Week For H.K./SE Asian IPOs

    SUMMARY:

    Indexes Global equities traded mixed as Asian strength was mitigated with renewed U.S. weakness and a surging Dollar after U.S. economic reports. Most of IPOX outperformed with focus on the big jump in the IPOX China. H.K. and Indonesian IPOs in focus during the upcoming week.

    HIGHLIGHTS:

    · Key IPOX Indexes rise, IPOX China 20 (NYSE:CNI) surges:The IPOX Global 50 (IPGL50), key gauge for the 'going public' effect of the most significant global IPO's and spin-offs over the past four years, rose for a second week, adding +1.19% to +9.51% YTD, outpacing benchmark MSCI World (MXWD) by a big +152 bps. Relative strength in IPOX U.S. (IPXT and IPXO) and the IPOX China 20 drove absolute and relative gains: Thanks to a big jump in the China-linked real estate developers including Evergrande Real Estate (3333 HK: +11.71%) or Longfor Properties (960 HK: +8.96%) on Chinas surprise interest rate cut as well as a big week for the Hong Kong traded Chinese car dealerships including China Zhengtong Auto (1728 HK: +9.07%), the IPOX China 20 outperformed benchmark Hang Seng Enterprise (HSCEI) by a massive +318 bps to +631 bps. YTD.

    · IPOX Long-only Strategy Returns YTD 12:

    · The Week ahead - Big week for H.K. IPOs:

    CompanyCodeCountryLead
    Bank PembangunanN/A IJIndonesiaBAHANA
    Bolina Holding Co Ltd1190 HKH.K.BOCI, CCB
    China Yongda Auto3669 HKH.K.BOCOM, HSBC
    FAST Casualwear AGFCA GRGermanyKepler Capital
    Fine Holdings Ltd1167 HKH.K.EVERBR, TY
    Gading DevelopmentGAMA IJIndonesiaAndalan Artha
    Global Teleshop Tbk PTGLOB IJIndonesiaEQUATO
    Inner Mongolia Yitai3948 HKH.K.BAML, BNP
    MNC Sky Vision Tbk PTMSKY IJIndonesiaDANREK, JPM
    Qualipak International1332 HKH.K.Haitong
    Revolymer PLCREVO LNU.KPanmure Gd
    Sheen Tai Holdings Grp1335 HKH.K.Haitong Sec.
    Silverman Holdings Ltd1616 HKH.K.FIRSHA
    Tri Banyan Tirta Tbk PTALTO IJIndonesiaValbury Asia

    Focus remains on H.K./SE Asian IPOs during the upcoming week: Inner Mongolia Yitai Coal Co (3948 HK) is set to become the largest H.K. IPO during July, seeking to raise HKD 8.6bn for a 10% stake in the company in an H-share offering with proceeds earmarked to stay within the company. Greater China IPOs in the energy sector have been amongst the worst performers since 2008. With global investors recording average YTD losses of 25% in the continuously high-beta coal sector, a wait-and-see approach is warranted unless substantially discounted. Silverman Holdings (1616 HK) is a profitable and growing manufacturer of high-end textiles which seeks to raise HKD 211.9ml for a 20.97 stake with proceeds staying in the company. At a P/E between 4.4 and 5.2, the small-cap is an attractive portfolio additions. Its valuation may benefit if the company can enter luxury brand portfolios.

    · Greater China IPO outperformance drives increasing ECM activity in the H.K. marketplace:

    34 IPOs linked to Greater China went public in H.K., Singapore, Taiwan and U.S. YTD 2012, with the average equally-weighted IPO gaining +5.30% (+4.14%) based on the difference between the final offering price and the first close. Through the close of June 30 2012, the average IPO recorded a gain of +16.62% from its offering price, a substantial outperformance when compared to benchmarks FTSE Greater China (FTAW10) and Hang Seng Index (HSI), which produced an average loss of -4.51% and -7.55%, respectively. Top gainers included H.K. traded specialty chemicals producer Juda International (1329 HK: +143.75%) or Vision Fame (1335 HK: +135.71%), a services firms in the construction industry. U.S. traded e-commerce company Acquity Group (AQ: +62.50%) ranked as the best performing China IPO newly listed in the U.S.

    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 06/25/12):

    CompanyTickerReturn / IPO (%)
    Akdeniz Guvenlik Hizmetleri ASAKGUV TI10.55%
    China Aluminum International2068 HK-8.65%
    HaiTian Hydropower International8261 HK86.67%
    Kobexindo Tractors Tbk PTKOBX IJ13.75%
    Merry Garden Holdings Ltd1237 HK1.00%
    Ming Le Sports AGML2 GR-32.31%
    Toba Bara Sejahtra Tbk PTTOBA IJ11.84%
    Xiao Nan Guo Restaurants Holdings3666 HK-6.00%

    14 significant global IPOs commenced trading last week with the average (median) IPO gaining +19.70% (+11.20%) based on the difference between the final offering price and the last close. H.K. IPOs traded mixed with the weeks biggest IPOs (2068 HK and 3666 HK) closing below offer.

    Ticker (BBG/Reuters)WeekQ2 12YTD 12
    IPOX Global 50 (IPGL50) (NYSEARCA:USD)+1.19%-8.13%+9.51%
    MSCI World (MXWD)-0.33%-6.36%+3.86%
    IPOX U.S. 100 (IPXO+0.36%-5.23%+13.74%
    IPOX U.S. 30 (IPXT)-0.01%-3.67%+13.73%
    S&P 500 (SPX)-0.55%-3.29%+7.72%
    IPOX Europe50 (IPXUJPEU) (EUR)+1.69%-10.75%-4.84%
    IPOX Europe30 (IXTE) (EUR)+1.10%-12.33%-8.89%
    STOXX 50 (SX5P) (EUR)+1.78%-3.16%+2.27%
    IPOX Asia-Pacific 30 (IPTA)+0.66%-5.69%+14.71%
    MSCI Asia-Pacific (MXPC)+1.12%-6.89%+3.71%
    IPOX China 20+4.28%-8.97%+3.72%
    Hang Seng Enprs. (HSCEI)+1.09%-10.01%-2.59%

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 16 3:23 PM | Link | Comment!
  • The IPOX Week (6/18/12): Global IPO Market Springs Back To Life With Malaysian Privatization !!!

    SUMMARY:

    Stocks rose on continued short covering in global benchmarks during expiration week on signs of further global stimulus. IPOX traded well-supported while global IPO activity remained subdued. IPOX China exposure recorded another week of strong gains. Large Emerging markets IPO lined up.

    HIGHLIGHTS:

    · Key IPOX Indexes firm as U.S., Asia lead rally in global equities, IPOX Europe lags anew:The IPOX Global 50 (IPGL50), key gauge for the performance of the most significant global IPO's and spin-offs over a four-year rotational cycle, rose +1.72% to +8.77% YTD, and remained +673 bps ahead YTD of global stocks as measured the MSCI World (MXWD) Index. Relative performance across the IPOX regional universe continued to diverge significantly with regions displaying active long-run IPO and spin-off deal flow activity (U.S., Asia-Pacific, and Emerging Markets) significantly outperforming markets with low long-run IPO activity (Europe). For example, the IPOX U.S. 30 (IPXT), benchmark for the performance of the largest and most significant 30 U.S. VC- and private-equity backed IPOs and spin-offs, rose +2.04% to +12.82% YTD, extending the relative gains vs. benchmark S&P 500 (SPX) to +604 bps. YTD. Relative gains were driven by big brand consumer stocks including IPOX heavyweight tobacco firm Phillip Morris International (PM: +4.48%) - after the announcement of a mammoth stock buy-back -, baby food maker Mead Johnson Nutrition (MJN: +4.75%) or retailer Dollar General (DG: +3.78%). Relative performance across the Developed Asia-Pacific universe (IPTA) remained strong: Relative weakness in the Hong Kong traded casino complex including Wynn Macau (1128 HK: - 4.71%) on big fund selling was mitigated by strength in Japanese social networker Gree (3632 JP: +25.46%), heavyweight Financial Dai-Ichi Life (8750 JP: +4.89%) or H.K. traded luxury goods maker Prada (1913 HK: +4.18%). The IPOX Asia-Pacific 30 (IPTA) rose +2.82% to +12.04% YTD, extending the YTD performance spread vs. benchmark MSCI Asia-Pacific (MXPC) to a massive +1319 bps. With its increasingly aging list of index members, the IPOX Europe universe (IPXUJPEU, IXTE) underperformed anew, closing slightly negative on the week, despite a strong week in the benchmarks. Weak miners weighed on sentiment with IPOX heavyweight 5/11 IPO Glencore International Plc (GLEN LN: -4.85%) trading new post-IPO lows on big overhang. Despite the jittery sentiment for Southern European exposure, 4/10 IPO Spanish travel reservation operator EUR 7bn Amadeus International (AMS SM: +2.33%) closed at a new all-time high after an upgrade of its debt. With benchmarks catching up to the positive sentiment showed during last week, the IPOX China (CNI: +3.93%) gained for a second week and remained well ahead of the benchmarks YTD.

    · Key IPOX Strategies Comparable Returns YTD 2012:

    Ticker (BBG/Reuters)Return

    5-day

    YTD 2012Name
    IPGL50 (NYSEARCA:USD)1.72%8.77%IPOX Global 50
    IPGL301.85%5.54%IPOX Global 30
    MXWD1.72%2.03%MSCI World
    IPXO1.67%12.02%IPOX U.S. 100
    IPXT2.04%12.82%IPOX U.S. 30
    SPX1.30%6.78%S&P 500
    IPXUJPEU (EUR)-0.27%-7.32%IPOX Europe 50
    IXTE (EUR)-0.36%-10.79%IPOX Europe 30
    SX5P (EUR)1.75%-2.08%STOXX 50
    IPTA2.82%12.04%IPOX Asia-Pacific 30
    MXPC2.39%-1.14%MSCI Asia-Pacific
    CNI3.93%4.38%IPOX China 20
    HSCEI4.19%-1.93%Hang Seng Enterprse

    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 06/11/12):

    CompanyTickerReturn / IPO (%)
    Dongwu Cement International695 HK+2.73%

    Mainland China cement producer Dongwu Cement International (695 HK: +2.73%) was the only notable accessible IPO last week. The company was not able to benefit from the big performance jump amongst some of the leading Chinese cement makers YTD, underlying the difficult pricing and trading sentiment in the current H.K. IPO market.

    · The Week ahead - Malaysia originates big IPO

    CompanyCodeCountryLead
    Felda Global Vtrs.FGV MKMalaysiaAll Major
    Xiezhong Internl.3663 HKH.K.Gjunan

    With statements from the Federal Reserve likely to underpin global equities, Malaysian Felda Global Ventures (FBV MK), the second largest global IPO YTD by funds raised, is set for its stock market debut. The privatization is the world's third largest palm oil producer and takes place on the eve of elections. Notable is the unusually large percentage of equity offered (63%) and the lackluster recent performance of 2011 Malaysian IPO Petronas Chemicals (PCHEM). We expect the muted sentiment for H.K. IPOs to continue to weight on H.K. deal flow, including China-domiciled auto parts maker small-cap Xiezhong International (3663 HK).

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Jul 09 1:29 PM | Link | Comment!
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