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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 (11/14/2011): Focus in on IPOs domiciled in the U.S. !!! 0 comments
    Nov 14, 2011 12:05 PM

    SUMMARY:

    Weak Asia and negative Europe-related news flow through Thursday did little to dampen the powerful momentum in U.S. equities towards November option expiration. While IPOX traded mixed to lower, global IPO activity continued to build momentum. Focus in on IPOs domiciled in the U.S.   

    HIGHLIGHTS:

    ·         For U.S. stocks, its much ado about nothing again: Negative Europe-related news flow through Thursday, the S&P snafu over France's downgrade contributing to big intra-day swings and weak Asia did little to derail the powerful momentum in U.S. large-caps towards option expiration. With Apple (AAPL: -3.90%) under pressure, good earnings from the U.S. multinationals and big intra-day swings, U.S. Index spreads continued to move in favor of the S&P 500 (SPX) and Dow Jones (INDU) vs. the Nasdaq-100 (NDX) und Russell 2000 (RUT). The expectations of a strong U.S. holiday shopping season kicking off in two weeks, Wednesday's launch of the Kindle Fire and a reduced fear over European debt should provide ample momentum to take benchmarks S&P 500 (SPX) and the Nasdaq-100 (NDX) towards and above the recent resistance levels during option expiration week.

    ·         The IPOX Global Strategy portfoliosunderperformed last week with the IPOX Global 30 (IPGL30) shedding 60 bps. to -5.14% YTD, lagging benchmark MSCI World (MXWD) by 53 bps. Declines amongst Hong Kong-traded IPOX heavyweights Wynn Macau (1128 HK: -12.34%) and Sands China (-11.42%) contributed to the relative decline. We note continued weakness in U.S. car manufacturer General Motors (GM: -4.66%) on earnings, European concerns and uncertainties related to batteries used in the Volt, its fully electric car. Global Payment Processors on fire: IPOX heavyweights global payment processors U.S.'s Visa (V: +2.72%) and Brazil's Cielo (CIEL3 BZ: +1.48%) and RedeCard (+1.88%) reached all-time post IPO-highs, underlining the sentiment towards specialty technology.  

    ·         Performance was mixed within the IPOX Regional Strategies Portfolios. In the United States, the IPOX U.S. 30 (IPXT) rose +0.29% to +2.74%, lagging benchmark S&P 500 by 56 bps. We note big declines in CA-based rare earth miner Molycorp (MCP: -16.75%) on weak earnings. In Europe, the IPOX Europe 30 (IXTE) fell -0.62%, lagging benchmark Stoxx Europe 50 (SX5P) by 105 bps. Lisbon-traded and IPOX heavyweight Galp Energy (GALP PL:         -11.37%) fell after an agreement to sell a stake in its Brazil unit to China's Sinopec Group at a value below expectations. Aforementioned weakness in the Macau casino complex led to a sharp decline in the IPOX Asia-Pacific 30 (IPTA), shedding -4.41% to -2.91% YTD. With entertainment software maker Nexon (3659 JP) lining up for a key IPO on the Tokyo Stock Exchange on December 14, 2011, social networker and IPOX pick Gree (3632 JP: -1.37%) hit new all-time highs during the trading week. In IPOX Emerging Markets, the IPOX Korea 30 (IPXK30K) continued to trade well, gaining 125 bps vs. benchmark Kospi 200 (KOSPI2) last week.

    Key IPOX Strategy Returns YTD:
    Ticker (BBG/Reuters)
    Return
    Week
    Return
    YTD
    Name
    IPGLC (USD)
    -1.44%
    -12.57%
    IPOX Global Comp
    IPGL100 (USD)
    -1.11%
    -6.69%
    IPOX Global 100
    IPGL50 (USD)
    -1.68%
    -6.78%
    IPOX Global 50
    IPGL30 (USD)
    -0.60%
    -5.14%
    IPOX Global 30
    IPXO (USD)
    -0.49%
    +2.33%
    IPOX U.S. 100
    IPXT (USD)
    +0.29%
    +2.74%
    IPOX U.S. 30
    IXTE (EUR)
    -0.62%
    -15.52%
    IPOX Europe 30
    IPTA (USD)
    -4.41%
    -2.91%
    IPOX Asia-Pac. 30
    IPXUEM (USD)
    -1.15%
    -20.25%
    IPOX Emerging Mkts.
    IPXUBRIC (USD)
    -2.57%
    -25.99%
    IPOX BRIC 25
    IPXUCHCP (USD)
    -4.82%
    -21.99%
    China IPOX Comp.
    CNI (USD)
    -4.25%
    -22.39%
    China IPOX 20
    IPXUCAUP (USD)
    -2.53%
    -14.77%
    China IPOX Comp.
    IPXULATT (USD)
    -0.60%
    -16.46%
    IPOX LatAm 20
    IPXK30K (KRW)
    -2.46%
    +2.49%
    IPOX Korea 30

    Most significant IPOs launched (Week 11/07/2011):   
    Company
    Ticker
    Return / IPO
    iTEST Co Ltd
    089530 KS
    5.42%
    Lifetech Scientific Corp
    8122 HK
    0.00%
    NewLink Genetics Corp
    NLNK US
    1.14%
    Atlas Resources Tbk PT
    ARII IJ
    -2.00%
    Avigilon Corp
    AVO CN
    0.44%
    CQV Co Ltd
    101240 KS
    -9.57%
    Imperva Inc
    IMPV US
    46.67%
    Shin-heung Machine Co Ltd
    007820 KS
    87.06%
    ·      14 IPOs were launched last week with the average (median) accessible deal rising +14.65% (+0.79%). The strong debut of U.S. specialty tech Imperva (IMPV: +46.67%) will support all U.S. deals lined up this week.

    Week ahead – U.S. domiciled deals in focus:
    Company
    Code
    Country
    Lead Manager
    Bluestem Brands
    BSTM US  
    U.S.A.
    PJC, WFS
    Clovis Oncology  
    CLVS US  
    U.S.A.
    CS, JPM
    InvenSense Inc
    INVN US  
    U.S.A.
    GS, MS
    Angie's List Inc
    ANGI US  
    U.S.A.
    BOFAML
    Delphi Auto
    DLPH US  
    U.S.A.
    GS, JPM
    Digital Domain  
    DDMG US  
    U.S.A.
    Roth Capital  
    Intermolecular  
    IMI US  
    U.S.A.
    BCLY, JPM
    Mattress Firm  
    MFRM US  
    U.S.A.
    BCLY,  UBS
    Manning& Napier  
    MN US  
    U.S.A.
    BOFAML
    Renheng  
    8012 HK  
    Hong Kong
    Shenyin  
    Semisysco Co  
    136510 KS  
    Korea
    HI Inv.
    With the IPO window open, focus is on U.S. domiciled deals with most upside likely in specialty technology (INVN, ANGI, BSTM). We expect less enthusiastic demand for private equity backed Delphi Auto (DLPH) or Mattress Firm (MFRM), the third U.S. IPO in the sector.
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