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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 !!! 0 comments
    Apr 30, 2012 12:19 PM

    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 (NYSEARCA: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.

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