Last Week In Global IPOs: Expiration Effects Propel Apple-Free IPOX U.S. To New All-Time High

by: Josef Schuster


The Apple-free IPOX Strategies remained the main beneficiaries of increased global risk appetite during Options and Futures Expiration Week, with the IPOX U.S. extending the gains to close at yet another all-time high. While U.S. IPOs sprang back to life, Japan Airlines (9201 JP) disappointed.


IPOX Global Indexes

IPOX rally continues, IPOX U.S. Strategies settle at yet another all-time high:

  1. Amid a continuously low volatile trading environment after the massive central bank action during the previous week, the IPOX Global 50 (IPGL50) -- proxy for the performance of the largest and most significant global IPOs and spin-offs over a four-year rotational cycle -- rose +0.03% to +18.32% YTD, +74 bps. ahead of benchmark MSCI World (MXWD).

IPOX Regional Indexes Action

  1. In the cross-section of the IPOX universe, the IPOX U.S. (IPXO, IPXT), continued its strong run, with the IPOX U.S. 100 (NYSEARCA:FPX) and narrower IPOX U.S. 30 (IPXT) extending the big gains from the previous weeks, rising +0.63% to +24.35% YTD and +0.87% to +23.12% YTD, respectively.
  2. The APPL-free (AAPL: +1.28%) IPOX U.S. ETF outperformed alll U.S. benchmarks, including the S&P 500 (NYSEARCA:SPY), Russell 2000 (RUT) and Nasdaq-100 (NDX) by +101 bps. (SPX), +169 bps. (RUT) and +41 bps. (NDX), respectively. Select IPOX U.S. heavyweights continued their powerful move from the previous weeks, including Buffet-held, beaten-down car maker IPOX heavyweight General Motors (GM: +2.73% or luxury-sector play in vogue December 2011 Michael Kors (KORS: +7.02%) (after a positively revised earnings outlook and massive index fund buying towards Friday's close). Refiner Phillips 66 (PSX: +0.19%), as well as credit card processor Visa International (V: +0.56%) closed the week at new post-IPO highs. Q3 re-balancing also added Facebook (FB: +0.91%) to the IPOX U.S. Universe at a discount of -39.84% to its IPO price.
  3. The IPOX Europe universe (IXTE, IPXUJPEU) remained flat for the week, with the narrower IPOX Europe 30 (IXTE: +0.47%) exactly in line with benchmark Stoxx 50 (SX5P: +0.97%). IPOX focus stock Spanish travel reservation technology firm Amadeus IT Holdings (AMS SM: +5.94%) closed at a post-IPO high after being added to the Dow Jones Sustainability Index universe.
  4. Across the Developed Asia-Pacific universe, the IPOX Asia-Pacific 30 (IPTA) continued to lose relative momentum, underperforming benchmark MSCI Asia-Pacific (MXPC) by -27 bps. to +1450 bps YTD. Volatile JP-traded snack-food maker Calbee Inc. (2229 JT: +3.48%) closed in on its post-IPO high, while Korean-run gamer Nexon (3659 JP: -0.19%) closed at a post-IPO low.
  5. The IPOX China Universe (CNI, IPXUCHCP) lagged benchmarks anew on continued relative weakness in the China-linked real estate companies including Longfor Properties (960 HK: -7.79%). Sentiment in mainland Chinese markets remained depressed, with the Shanghai Composite (SHCOMP: -4.58%) spiraling downwards to new multi-year lows.

IPOX Strategy Returns YTD 2012:

Ticker (BBG/Reuters) Week Q2 12 YTD 12
IPOX Global 50 (IPGL50) (NYSEARCA:USD) +0.03% -8.13% +18.32%
MSCI World (MXWD) -0.71% -6.35% +12.72%
IPOX U.S. 100 (IPXO) +0.63% -5.23% +24.35%
IPOX U.S. 30 (IPXT) +0.87% -3.67% +23.12%
S&P 500 (SPY) -0.38% -3.29% +16.11%
IPOX Europe50 (IPXUJPEU) (EUR) +0.17% -10.75% +6.87%
IPOX Europe30 (IXTE) (EUR) +0.47% -12.33% +3.05%
STOXX 50 (SX5P) (EUR) +0.47% -3.16% +9.19%
IPOX Asia-Pacific 30 (IPTA) -0.41% -5.69% +21.55%
MSCI Asia-Pacific (MXPC) -0.14% -6.89% +6.96%
IPOX China 20 (NYSE:CNI) -1.32% -8.97% -3.47%
Hang Seng Enprs. (HSCEI) -0.25% -10.12% -1.33%

Most significant IPOs traded (Week of 09/17/12):

Company Ticker Return/IPO
Japan Airlines Co 9201 JP -2.90%
National Bank Holdings (NYSE:NBHC) +2.08%
North American Financial (NASDAQ:CBF) +0.78%
Susser Petroleum


Trulia Inc (TRLA) +35.47%

Five significant accessible global IPOs commenced trading last week, with the average (median) IPO gaining +9.60% (+2.08%). While re-IPO Japan Air (9201 JP) disappointed, all U.S. deals rose, with focus on high-growth, low size real-estate website operator Trulia Inc. (TRLA).

The Week Ahead: Talanx's big u-turn raises hopes for more European deals

Company Code Country Lead
GlobeImmune Inc (NASDAQ:GBIM) U.S. Piper
Qualys Inc (NASDAQ:QLYS) U.S. CS
Santander Mexico (NYSE:BSMX) Mexico All Major
Summit Midstream (NYSE:SMLP) U.S. BAML, GS, MS
Talanx AG N/A Germany DB, JPM, C

Santander Mexico (BSMX) is set for a dual-listing of up to 25% of a stake held by its Spanish parent. Despite much initial support from hedge fund and a cheap valuation, the common stock IPO listing comes amid a -39.17% decline of 2009 IPO incumbent and IPOX heavyweight Banco Santander Brazil (NYSE:BSBR). Having cancelled the IPO last week, German insurer Talanx AG now has secured enough support to go ahead with its IPO, a good sign for European IPOs. Internet security firm Qualys (QLYS) offers a larger-than-average 25.21% at around 5 times 2012 revenues. Summit Midstream (SMLP) should benefit from continued strong liquidity flows into the red-hot MLP space.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.