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.
· 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:
|IPGLC (NYSEARCA:USD)||-0.02||13.46||IPOX Global Comp|
|IPGL100||-0.55||13.41||IPOX Global 100|
|IPGL50||0.54||18.01||IPOX Global 50|
|IPGL30||1.21||15.65||IPOX Global 30|
|IPXO||-0.70||17.09||IPOX U.S. 100|
|IPXT||-0.73||15.97||IPOX U.S. 30|
|IXTE (EUR)||0.56||-0.32||IPOX Europe 30|
|IPXUJPEU (EUR)||1.28||2.91||IPOX Europe 50|
|IPXUEM||-0.44||15.02||IPOX Emerging Mkts.|
|IPTA||2.20||23.07||IPOX Asia-Pacific 30|
|IPXUBRIC||-1.04||13.21||IPOX BRIC 25|
|IPXUCHCP||1.22||15.31||Chin IPOX Comp.|
|CNI||-0.22||12.99||China IPOX 20|
|IPXUCAUP||3.71||12.17||China IPOX Comp.|
|IPXULATT||-2.66||11.92||IPOX LatAm 20|
|IPXK30K (KRW)||-0.41||-2.85||IPOX Korea 30|
· Most significant IPOs launched (Week 04/16/12):
· The Week ahead - China-linked and Brazil in focus:
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.