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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 (4/23/12): What To Expect From Hyped U.S. IPOs, BTG Pactual And BSBR !!!

    SUMMARY:

    Global equities rallied last week on a good week in China-linked exposure and U.S. earnings. The IPOX Strategies traded mixed with a notable drop in the IPOX U.S., which had led markets higher for much of YTD. Shift in global deal flow to China-linked and IPOs in Brazil.

    HIGHLIGHTS:

    · Key IPOX Strategies mixed:Strength amongst China-linked exposure (IPXUCHCP) and developed Asia-Pacific (IPTA) was mitigated by a big relative performance drop in the AAPL-free IPOX U.S. Strategies. On the global level, e.g., the IPOX Global 50 (IPGL50) rose +0.54% to +18.01% YTD. The regional IPOX Strategies diverged sharply: In the United States, e.g., the IPOX U.S. IPO and spin-off ETF (TICKER: FPX) retreated for another week, falling -0.70% to +17.09%YTD, indicating caution ahead for U.S. equities. The IPOX Europe Universe remained under relative pressure on Italian/Spanish exposure. The IPOX Strategies focusing on Asia-Pacific rose with a new one-year high in the IPOX Asia-Pacific 30 (IPTA) which rose by +2.20% to +23.07 YTD. The Strategy jumped on a big week for Japanese Gamer Nexon (3659 JP), e.g.

    Key IPOX Strategies Returns YTD 2012:

    Ticker (BBG/Reuters)Return

    5-day

    YTD 2012Name
    IPGLC (USD)-0.0213.46IPOX Global Comp
    IPGL100-0.5513.41IPOX Global 100
    IPGL500.5418.01IPOX Global 50
    IPGL301.2115.65IPOX Global 30
    IPXO-0.7017.09IPOX U.S. 100
    IPXT-0.7315.97IPOX U.S. 30
    IXTE (EUR)0.56-0.32IPOX Europe 30
    IPXUJPEU (EUR)1.282.91IPOX Europe 50
    IPXUEM-0.4415.02IPOX Emerging Mkts.
    IPTA2.2023.07IPOX Asia-Pacific 30
    IPXUBRIC-1.0413.21IPOX BRIC 25
    IPXUCHCP1.2215.31Chin IPOX Comp.
    CNI-0.2212.99China IPOX 20
    IPXUCAUP3.7112.17China IPOX Comp.
    IPXULATT-2.6611.92IPOX LatAm 20
    IPXK30K (KRW)-0.41-2.85IPOX Korea 30

     

     

    ·

    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 (Week 04/16/12):

    CompanyTickerReturn / IPO (%)
    Digital Cinema DestinationsDCIN US5.57
    Infoblox IncBLOX US33.13
    Jiangnan Group Ltd1366 HK0.00
    Midstates Petroleum Co IncMPO US15.38
    Phnom Penh Water SupplyPWSA KH61.90
    Proofpoint IncPFPT US8.31
    Splunk IncSPLK US112.94
    Synertone Communication Corp1613 HK6.06
    Tumi Holdings IncTUMI US45.56

    17 global IPOs priced last week with the average (median) IPO gaining a strong 26.38% (+11.85%). Upside focus remained on big brand U.S. IPOs in specialty industries (consumer discretionary and technology) with luggage maker Tumi Holdings (TUMI US) and cloud-linked Splunk (SPLK US) leading the way, while all other U.S. IPOs rose based on their final offering price as well. H.K. IPOs continued to show lackluster initial performance.

    · The Week ahead - China-linked and Brazil in focus:

    CompanyCodeCountryLead Manager
    Acquity GroupAQ USH.K.Oppenheimer
    Banco BTG Pact.BBTG11 BZBrazilCITI, GS, JPM
    Branding China8219 HKChinaFirst Shanghai
    China Auto Rent.CARH USChinaBAML, JPM
    Zhongsheng Res.2623 HKChinaHaitong
    Edgen Group IncEDG USU.S.CITI, MS
    Envivio IncENVI USU.S.DB, STFL
    Fibria CeluloseFIBR3 BZBrazilBAML, DB
    Haitong Sec.6837 HKChinaCITI, CS, DB

    A broadly diversified mix of companies are in this week's global IPO pipeline with China-linked and Brazilian firms in the spotlight: In the lackluster H.K. market, Advertising Services company Branding China (8219 HK), China Zhongsheng Resources (2623 HK) and Haitong Securities (6837 HK) are lined up, while H.K. e-marketer Acquity (AQ US) and China Auto Rental (CARH US) will test the appetite for China-linked deals by U.S. investors. Focus amongst the slew of Brazilian deals is on Banco BTG Pactual (BBTG11 BZ) seeking to command around 35% of the total valuation of its former owner, UBS AG (UBS US). We note the big relative performance struggle in hedge-fund heavy Banco Santander Brazil (BSBR US) which has fallen by -30.24% since its 10/09 unit IPO. U.S. domiciled deals include formerly post-phoned tech-IPO Envivio (ENVI US) and Oil Field Machinery&Equipment maker Edgen Group (EDG US).


    · U.S. IPOs popping strongly underperform: Investing USD 100 into an equally-weighted basket of U.S. IPOs with high initial returns after one month of trading would have left the investor with just USD 61.21 after three years vs. USD 94.17 when investing in the U.S. IPO ETF .

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

    Apr 30 12:19 PM | Link | Comment!
  • The IPOX Week (4/16/12): How Robust Is The U.S. IPO Market ?

    SUMMARY:

    Global equity benchmarks and IPOX weakened into the new week on a stronger dollar, European debt and U.S. earnings. With some non-tech IPOs unable to price during last week, a number of U.S. IPOs in "hot" sectors are set to test the robustness of the U.S. IPO market.

    HIGHLIGHTS:

    · IPOX Strategies fall:Key IPOX Strategies reversed some of last week's relative performance gains towards the beginning of the week, seemingly susceptible to the rise in global risk. On the global level, e.g., the IPOX Global 50 (IPGL50) fell -0.68% to +16.59% YTD, slightly beating benchmark MSCI World (MXWD). Broader IPOX Global Strategies continued to la and regional performance continued to diverge: In the United States, e.g., the IPOX U.S. IPO and spin-off ETF (TICKER: FPX) retreated from its all-time high set on April 2, 2012 and has declined on 7/9 trading days since. Amid a big move in spreads in U.S. benchmarks in general, this indicates more caution ahead for equities. The IPOX Europe Universe continued to be the most pressured IPOX Strategy, as Italian/Spanish exposure such as Spanish Financials Bankia (BKIA SM) and Caixa Bank (CABK SM) or Italian Utility Enel Green Power (EGPW IM) is hitting new post-IPO lows on European debt fears. Performance within the Asia-Pacific Regions remained solid, however, with the IPOX Asia-Pacific 30 (IPTA) continuing to trade well ahead of the benchmarks. With the Macau casino complex trading well bid, we note new post-IPO highs in IPOX members and Japanese snack-food maker 2011 IPO Calbee (2229 JT) and Australian winery and 2011 spin-off Treasury Wine Estates (TWE AU). Amid a rise in global risk, IPOX Emerging Markets traded mostly lower vs. the benchmarks over the past trading days. An exception is the IPOX Korea 30 (IPXK30K. After falling for much of the year, the portfolio has strongly outperformed the Kospi 200 (KOSP2), still remaining the worst performing IPOX Strategy YTD.

    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

    · How robust is the U.S. IPO market ?

    CompanyCodeCountryLead Manager
    Digital CinemaDCIN USU.S.A.MAXIM
    GT CapitalGTCAP PMPHILIP.UBS
    InfobloxBLOX USU.S.A.GS, UBS
    Jiangnan Group1366 HKCHINADAIWA
    Midstates PetroMPO USU.S.A.MS, WFS
    Proofpoint IncPFPT USU.S.A.DB
    SandRidge Missi.SDR USU.S.A.BAML, CITI
    Splunk IncSPLK USU.S.A.BAML, CS, JPM
    Synertone1613 HKCHINAEMPROR
    TumiTUMI USU.S.A.CS, JEFF, JPM
    Uchiyama6059 JPJAPANDAIWA

    IPOs by U.S. firms are set to continue to dominate the global IPO calendar. While some of last week's mostly energy-related deals were delayed, this week's IPOs are in recently "hot" IPO VC-backed sectors will therefore put a more serious test of the strength of the U.S. market ahead of Facebook (FB US). Lossmaking applications software maker Infoblox (BLOX US) is a GS/UBS-led key deal which seeks to raise between USD 90m and USD 105m for a 17% stake, valuing the company between USD 525m USD 616m, a steep 7-8 times sales. The company will receive part of the proceeds. Splunk (SPLK US) is an internet applications software maker which seeks to go public at 8-10 times last year's revenue. The loss-making company's float is expected at 14.5%, giving it a market cap between USD 1bn and USD 1.2bn at the onset. Proceeds are not earmarked for particular projects, but the IPO event is viewed as providing the financial flexibility and to increase visibility in the marketplace. Private-Equity backed Tumi (TUMI US) is a well-established and globally active maker of luggage products. The profitable company uses the IPO to pursue a capital structure event by selling 27% at a valuation between USD1.0bn - 1.2bn or around 3.0-3.5 times sales. The KORS-like strong brand should help the firm to find a quick following within hedge funds/portfolios focused on luxury good and may use its stock to acquire other luggage makers, such as Rimowa, the privately held German maker of Alu-suitcases. Other notable deals in the pipeline include Daiwa-led cable maker Jiangnan (1366 HK), network product maker Synertone (1613 HK) and enterprise software maker Proofpoint (PFPT US), another U.S. tech IPO.

    Key IPOX Strategies Returns YTD 2012:

    Ticker (BBG/Reuters)Return

    5-day

    YTD 2012Name
    IPGLC (USD)-1.0312.67IPOX Global Comp
    IPGL100-1.4413.21IPOX Global 100
    IPGL50-0.6816.59IPOX Global 50
    IPGL30-1.2413.16IPOX Global 30
    IPXO-1.4316.58IPOX U.S. 100
    IPXT-1.4215.57IPOX U.S. 30
    IXTE (EUR)-2.59-1.78IPOX Europe 30
    IPXUJPEU (EUR)-2.100.99IPOX Europe 50
    IPXUEM-0.8114.84IPOX Emerging Mkts.
    IPTA0.1820.03IPOX Asia-Pacific 30
    IPXUBRIC-1.0513.31IPOX BRIC 25
    IPXUCHCP0.0913.27Chin IPOX Comp.
    CNI-0.1811.90China IPOX 20
    IPXUCAUP3.278.08China IPOX Comp.
    IPXULATT-1.9314.20IPOX LatAm 20
    IPXK30K (KRW)-0.23-3.47IPOX Korea 30

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

    Apr 26 1:57 PM | Link | Comment!
  • The IPOX Week (4/7/12): IPOX Dodges The Groupon (GRPN) Bullet !!!

    SUMMARY:

    Amid weaker global benchmarks and big declines in selected IPOs (GRPN), most IPOX Strategies continued their strong absolute and relative performance run into the new quarter. With risk increasing on U.S. unemployment and European debt, a number of global IPOs are set to launch.

    HIGHLIGHTS:

    · Most IPOX Strategies produce relative gains into the new quarter:A retreat in most benchmarks did little to change the positive tone across most of the IPOX Strategies as the IPOX heavyweights produced solid returns and IPOX dodged the Groupon (GRPN: -22.85%) bullet. On the global level, e.g., the IPOX Global 50 (IPGL50) rose +0.07% to +17.40% YTD, extending the relative YTD gain vs. benchmark MSCI World (MXWD) by a massive +165 bps. to +760 bps. Gains extended across the IPOX Regional Strategies: In the United States, the IPOX U.S. IPO and spin-off ETF (TICKER: FPX) rose just +0.04% to +19.62% YTD, with spreads vs. benchmark Russell 3000 (ETF: IWV) extending to +810 bps with the narrower IPOX U.S. 30 (IPXT: +0.45% to 18.53%) outperforming for yet another week. Another good week in global payment processor Visa (V: +2.54%) supported relative momentum. As vows over European banks resurface, the IPOX Europe Universe continued to be one of the most pressured IPOX Strategies, with the IPOX Europe 50 (IPXUJPEU) falling -1.61% to +3.24% YTD with IPOX member and hard-hit Spanish Financial Bankia (BKIA SM: -5.88%) finishing the week at a post-IPO low. The Developed Asia and China-linked IPOX Strategies supported anew: The IPOX Asia-Pacific 30 (IPTA: -0.80% to +20.04%) beat the MSCI Asia-Pacific (MXPC) by 158 bps, while the IPOX China 20 (CNI: +2.60% to +11.86% YTD) rose strongly in absolute and relative terms. With no large-cap Korean IPOs in sight, we note further deteriorating Korean IPO performance with the IPOX Korea 30 (IPXK30K: -3.50% to -3.40%) now negative YTD.

    Key IPOX Strategies Returns YTD 2012:

    Ticker (BBG/Reuters)Return

    Week (%)

    YTD 2012 (%)Name
    IPGLC (USD)-0.6514.75IPOX Global Comp
    IPGL100-0.4815.45IPOX Global 100
    IPGL500.0717.40IPOX Global 50
    IPGL300.0214.19IPOX Global 30
    IPXO0.0419.62IPOX U.S. 100
    IPXT0.4518.53IPOX U.S. 30
    IXTE (EUR)-1.910.88IPOX Europe 30
    IPXUJPEU (EUR)-1.613.24IPOX Europe 50
    IPTA-0.8020.04IPOX Asia-Pac. 30
    IPXUEM0.1314.93IPOX Emerging Mkts.
    IPXUBRIC0.5015.08IPOX BRIC 25
    IPXUCHCP1.0812.28Chin IPOX Comp.
    CNI2.6011.86China IPOX 20
    IPXUCAUP2.055.68China IPOX Comp.
    IPXULATT-0.2317.14IPOX LatAm 20
    IPXK30K (KRW)-3.55-3.40IPOX Korea 30

    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 (week 04/02/2012):

    CompanyTickerReturn / IPO (%)
    None  

    · Week Ahead (04/09/2012): U.S. leads anew

    CompanyCodeCountryLead Manager
    Aleris CorpARS USU.S.BAML, BCLY
    BrightSourceBRSE USU.S.CITI, DB
    Bumitama AgriBAL SPSPDBS, HSBC
    Cw Group1322 HKH.K.Guotai Junan
    Enerkem IncNRKM USU.S.BMO, CS
    Erickson AirEAC USU.S.LAZ, OPP
    Forum EnergyFET USU.S.BAML, CITI
    Luca TechLUCA USU.S.PJC
    MRC Global IncMRC USU.S.GS
    Oaktree CapitalOAK USU.S.MS

    Apart from few micro/small-cap IPOs abroad (e.g. 1322 HK, BAL SP), IPOs in the U.S. dominate the global deal flow with at least 8 deals scheduled to go public. With increased risk expected in the main benchmarks this week, we expect a more muted response and pricing environment for the slew of U.S. deals: Aleris Corp. (ARS US) is a globally active producer and seller of aluminum rolled and extruded products. The company seeks to sell a 29% equity stake in the IPO, with most of the proceeds going to selling shareholders. The profitable manufacturer is expected to be valued at between USD 1.6bn and USD 1.8bn. BrightSource (BRSE US), an energy company related to the hard-hit solar space, is conducting a concurrent private placement and IPO of around 15% of the profitable company seeking to value the firm near USD 1bn. Proceeds are earmarked for growth. CA-domiciled Enerkem Inc. (NRKM US) develops renewable biofuels and chemicals from waste using proprietary technology and seeks to sell 26% of equity for growth purposes, valuing the company at between USD 480m - USD 540m. Other IPOs include Erickson Air-Crane (EAC US), Forum Energy (FET US) and MRC Global (MRC US), growing and mostly established firms where all proceeds are being earmarked to pay down/reduce debt/go to selling shareholders. Most media-heavy is the IPO of fixed-income hedge-fund Oaktree Capital (OAK US). We caution, given the historical performance of hedge-fund IPOs (APO US, BX US, OZM US, FIG US, etc.) and its structure as a unit offering.

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

    Apr 12 12:48 PM | Link | Comment!
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