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The IPOX Week (10/17/2011): U.S. IPO window opens !!!

SUMMARY:

Equities surged as big sentiment for U.S. technology finally outweighed jittery Financials with seasonally-driven short covering and plunging risk pushing markets. With Asia-Pacific lending additional support, the IPOX portfolios beat benchmarks across the board.  Strong start to U.S. Q4/11 IPO cycle. Successful IPO debuts pave way for more U.S. IPOs.  Equities surged as big sentiment for U.S. technology finally outweighed jittery Financials with seasonally-driven short covering and plunging risk pushing markets. With Asia-Pacific lending additional support, the IPOX portfolios beat benchmarks across the board.  Strong start to U.S. Q4/11 IPO cycle. Successful IPO debuts pave way for more U.S. IPOs.  

HIGHLIGHTS:

·         Global equities surged in tandem ahead of option expiration week, as positive sentiment over the U.S. economic outlook, more stable news flow related to European debt and a huge rally in U.S. technology shares after strong earnings shocked the shorts anew. The Dollar/Euro plunged for a second week on declining risk. Select IPOX portfolios topped benchmarks.
·         Much Ado about nothing – U.S. equities remain the best long play: Amid powerful earnings (NASDAQ:GOOG) and the start of a new product cycle (NASDAQ:AAPL), the technology-heavy Nasdaq-100 (NDX: +7.65% to +6.95% YTD) again moved into solidly positive territory YTD, providing the necessary backbone to a big week for the diversified IPOX U.S. portfolios with the IPOX U.S. 30 Index (IPXT) gaining +6.60% to +1.57% YTD, extending the YTD lead vs. benchmark S&P 500 (SPX) to 420 bps. With another massive rally in IPOX heavyweight General Motors (GM: +9.77%) supporting, key IPOX members payment processor Visa (V: +8.89%) or tobacco maker Lorillard (LO: +1.36%) traded at or near all-time highs.
·         Despite a lackluster showing in IPOX heavyweight Glencore International (GLEN LN: +0,50%), the IPOX Europe Indexes made up some ground lost, with the IPOX Europe 30 (IXTE) rising +4.43%, outperforming benchmark Stoxx 50 (SX5P) by a massive +227 bps. on the week.  
·         In Asia, the IPOX Asia-Pacific 30 (IPTA) continued to trade with big swings, but finished the week +3.36% higher, narrowing the YTD loss to -5.31%. The index remained the best performing index tracking  developed  
·         Global equities surged in tandem ahead of option expiration week, as positive sentiment over the U.S. economic outlook, more stable news flow related to European debt and a huge rally in U.S. technology shares after strong earnings shocked the shorts anew. The Dollar/Euro plunged for a second week on declining risk. Select IPOX portfolios topped benchmarks.
·         Much Ado about nothing – U.S. equities remain the best long play: Amid powerful earnings (GOOG) and the start of a new product cycle (AAPL), the technology-heavy Nasdaq-100 (NDX: +7.65% to +6.95% YTD) again moved into solidly positive territory YTD, providing the necessary backbone to a big week for the diversified IPOX U.S. portfolios with the IPOX U.S. 30 Index (IPXT) gaining +6.60% to +1.57% YTD, extending the YTD lead vs. benchmark S&P 500 (SPX) to 420 bps. With another massive rally in IPOX heavyweight General Motors (GM: +9.77%) supporting, key IPOX members payment processor Visa (V: +8.89%) or tobacco maker Lorillard (LO: +1.36%) traded at or near all-time highs.
·         Despite a lackluster showing in IPOX heavyweight Glencore International (GLEN LN: +0,50%), the IPOX Europe Indexes made up some ground lost, with the IPOX Europe 30 (IXTE) rising +4.43%, outperforming benchmark Stoxx 50 (SX5P) by a massive +227 bps. on the week.  
·         In Asia, the IPOX Asia-Pacific 30 (IPTA) continued to trade with big swings, but finished the week +3.36% higher, narrowing the YTD loss to -5.31%. The index remained the best performing index tracking  developed markets APAC exposure. With its 40% exposure to H.K. traded and China-linked growth stocks, it continued to run well ahead of benchmarks MSCI Asia-Pacific (MXPC) and HSI (HSI). Recent Tokyo-traded portfolio additions cosmetics producer Pola Orbis (4927 JP: -4.25%) and snack-food producer Calbee (2229: JP: -4.15%) fell. 

·      IPOX Emerging Markets (IPOX China, IPOX BRIC; IPOX Korea, IPOX Latin America)closed with huge gains, tracking or topping the respective benchmarks. Notable is the relative jump in the recently launched IPOX Korea 30 Index (IPXK30K) which outperformed  benchmark Kospi 200 (KOSPI2) by a strong 134 bps. and is now back in positive territory YTD (in local currency).  In line with a surge in IPOX heavyweight General Motors (NYSE:GM), Korean car parts maker and 2010 IPO Mando (060980 KS: +8.90%) performed strongly.
·      The surge in global equities left the IPOX Global 30 Index (IPGL30) on top of the performance ranking: The portfolio rose 6.02% to -7.59% YTD, outperforming benchmark MSCI World (MXWD) by 61 bps on the week.

Most significant IPOs launched (Week 10/15/2011):   
Company
Ticker
Return / IPO
Ubiquiti Networks Inc                                                          
UBNT US
21.33%
ASB Bancorp Inc
ASBB US
14.50%
·      Two significant IPOs started trading with the respective U.S. deals debuting successfully. While a cut in initial IPO price range made Ubiquiti Networks (UBNT US) more attractive for long- run investors facing overhang, the successful debut alongside a lower level of market volatility should help to open the U.S. IPO window. 

·      Week ahead - I need to tell my wife about ZLTQ:
Company
Code
Country
Lead Manager
Robostar Co Ltd
090360 KS 
Korea
Mirae Asset 
Zeltiq Aesthetics
ZLTQ US
U.S.
GS, JPM
With global IPOs scarce, our focus is on the IPO of U.S. small-cap Zeltiq Aesthetics (ZLTQ US). The company operates and (exclusively) licenses innovative technology related to a non-invasive procedure to reduce body fat under the “coolsculpting” brand. Despite the relatively steep valuation (USD 458ml-524ml based on initial terms), the company has achieved an impressive growth and profit record since first recording revenues in 2009. The offering terms (sells 21.37% of total shares at the IPO) are attractive and a key shareholder seeks to take up to USD 10m of the offering at the IPO.

(c) 2011 IPOX Schuster LLC. IPOX is a registered international trademark of IPOX Schuster LLC. Index of Initial Public Offerings (IPOX) and IPOX Derivatives Patent No. US 7,698,197. Past performance is no guarantee of comparable future performance. To receive more information, please contact The IPOX Team on josef@ipoxschuster.com  or call (312) 264-4410.