Last Week In Global IPOs: IPOX Strategies Extend Gains On Strong U.S. Earnings, Asia-Pacific Momentum

by: Josef Schuster


-- The IPOX Strategies rise, outperform anew. IPOX China surges as mainland markets recover.

-- Gains linked to strong U.S. earnings and Asia-Pacific momentum.

  • U.S. and European deals debut strongly.

IPOX Returns, IPOs Priced and Upcoming:

For a second week, all IPOX Strategies record gains:A string of good earnings and powerful Asia-Pacific continued to propel the IPOX Strategies beyond the benchmarks: On the global level, the IPOX Global 50 (IPGL50) rose for a second week to the highest since May, gaining +1.27% to +18.65% YTD, extending the relative YTD gain vs. the MSCI World (MXWD) by +72 bps. to +834 bps. Performance continued to be driven by a good week in the IPOX heavyweights including Hong Kong's AIA Group (1299 HK: +2.91%) and the Macau-based casino complex including Sands China (1928 HK: +6.33%) or Wynn Macau (+4.68%). While 5/12 IPO U.S. social networker Facebook (NASDAQ:FB) tumbled, U.S. heavyweights payment processor Visa (V: +3.68%) and carmaker General Motors (GM: +10.78%) - now clearly an S&P 500 (SPX) candidate - surged on strong earnings. In the cross-section of the 2260 member-strong IPOX universe, the IPOX Asia-Pacific (IPTA) led again, rising +2.44% to +28.48% YTD to the highest level since 2007. Select IPOX mid-caps in the region recorded more fresh post-IPO highs on the week, such as Japanese snack food maker USD 3.1bn Calbee (2220 JP: +1.49%) or French cosmetics group and 2010 Hong Kong IPO L'Occitaine International (973 HK: +2.54%). IPOX Europe (IXTE, IPXUJPEU) traded well, with the IPOX Europe 50 (IPXUJPEU) only slightly trailing benchmark Stoxx 50 (SX5P). The IPOX U.S. universe (IPXO, IPXT) continued the massive relative performance push with the USD 500bn IPOX U.S. 100 (FPX) adding +1.42% to +20.77% YTD, substantially outpacing benchmarks S&P 500 (SPX), Nasdaq-100 (NDX) or Russell 2000 (RUT). Amid good earnings, performance drivers included aforementioned General Motors (NYSE:GM) and Visa (NYSE:V) as well as online travel reservation site TRIP Advisors (NASDAQ:TRIP) which - after last quarter's big miss - substantially beat estimates. In IPOX Emerging Markets, the IPOX China 20 (CNI: +6.02%) surged much more than the benchmarks as mainland China equities are building momentum on economic optimism. IPOX members across all sectors gained strongly, with IPOX heavyweights Agricultural Bank of China (1288 HK: +6.79%) or CITIC Securities (6030 HK: +6.21%) in focus amongst the Financials.

IPOX Strategy Returns YTD 2012:

Ticker (BBG/Reuters) Week Q3 12 YTD 12
IPOX Global 50 (IPGL50) (USD) +1.27% +7.31% +18.65%
MSCI World (MXWD) +0.55% +6.24% +10.31%
IPOX U.S. 100 (IPXO) +1.42% +7.09% +20.77%
IPOX U.S. 30 (IPXT) +1.42% +5.39% +19.65%
S&P 500 (SPX) +0.39% +5.76% +12.45%
IPOX Europe50 (IPXUJPEU) (EUR) +1.03% +11.75% +7.02%
IPOX Europe30 (IXTE) (EUR) +0.72% +11.76% +2.25%
STOXX 50 (SX5P) (EUR) +1.13% +5.76% +8.10%
IPOX Asia-Pacific 30 (IPTA) +2.24% +6.82% +28.48%
MSCI Asia-Pacific (MXPC) +0.09% +2.56% +4.93%
IPOX China 20 (NYSE:CNI) +6.03% -1.96% +9.04%
IPOX China Cp. (IPXUCHCP) +5.00% +3.18% +11.89%
Hang Seng Enprs. (HSCEI) +3.68% +2.68% +9.03%
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: Portfolio Construction Technology

§ Best in Practice: Investment Management Mandates

· Significant IPOs launched (Week: 10/29/2012 ):

Company Ticker Return/IPO
Delek Logistics Partners LP DKL US 6.43%
Express Transindo Utama Tbk PT TAXI IJ 5.36%
Pegasus Entertainment Holdings 8039 HK -8.89%
Restoration Hardware Holdings RH US 29.58%
Shanghai Fosun Pharmaceutical 2196 HK -5.76%
Southcross Energy Partners LP SXE US 11.75%
Telefonica Deutschland Holding O2D GR 5.80%
Zespol Elektrowni Patnow Adam. ZEP PW -3.05%

8 significant accessible global IPOs took place last week, with the average (median) IPO gaining +5.15% (+5.58%). The strong debut of Telefonica Deutschland (O2D GR) and the U.S. domiciled IPOs (DKL US, RH US, SXE US) cement the good momentum underpinning global IPO sentiment. Ahead of a big month for the Hong Kong IPO market with the likely launch of the USDbn 3 H.K. IPO of People's Insurance Company of China (PICC), Chinas fifth largest life insurer, the respective H.K. deals closed their first week below their offering price.

Upcoming global IPOs (Week: 11/05/2012):

Company Code Date Lead
Avatec Co 149950 KS 11/6 KIS
Singulex Inc SGLX US 11/7 Piper Jaffray &
Taylor & Martin TMG US 11/7 Oppenheimer
CJ Hellovision Co 037560 KS 11/9 DAEWOO, JPM

No significant global IPOs are lined up for trading debut for next week. Amongst the U.S. deals scheduled are biotech Singulex (SGLX US) and marketplace operator Taylor and Martin (TMG US). Focus abroad is on the IPO of cable-TV company Korean-domiciled CJ Hellovision (037560 KS), the largest IPO on the Korean market in 18 months. The company raised ca. USDm 267 at KRW 16,000, towards the lower end of the originally set KRW 14,000 - KRW 19,000 bookbuilding range. Korea is bracing for several large IPOs in the coming months, including the IPO of state-owned KDB Financial Group as well as SK Lubricants, both expected to raise amounts exceeding USD 1bn.

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.