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The IPOX Week (12/19/2011): U.S. IPOs outperform, Happy Holidays from IPOX !!!

SUMMARY:

Global equities fell during key option expiration on renewed weakness related to Europe, slumping commodities and a surging dollar. During a big week for global IPOs, upside focus remained solely on U.S. IPOs. Key IPOX Strategy Indexes traded firm.  More Asia-Pacific deals in the pipeline. 

HIGHLIGHTS:

·         Global equities closed the week with further losses as positive U.S. economic news was yet again unable to mitigate selling related to European news flow. Asia-Pacific markets slumped.  The IPOX Global 30 (IPGL30), capturing the performance of the largest and most liquid global IPOs and spin-offs over the past four years, slumped -3.17% to -9.93% YTD, beating benchmark MSCI World (MXWD) by 24 bps.
·         With U.S. option affecting the major benchmarks, the story of the week belonged to solid relative performance jump in the IPOX U.S. universe: Driven by gains in IPOX heavyweights Visa (V: +0.26%), Philip Morris International (PM: +0.03%), Kinder Morgan (KMI: +0.81%) or HCA (+1.84%), the IPOX U.S. 30 (IPXT) fell just -2.00% to          -0.46% YTD, outperforming the S&P 500 (SPX), Russell 2000 (RUT) and Nasdaq 100 (NDX) by a big 83, 113 and 147 bps., respectively.  Dec. 2010 IPO General Motors (GM: -4.73%) traded at a new post-IPO low mid-week.  
·         Other IPOX Regional Strategy Indexes traded mixed: While the IPOX Europe 30 (IXTE: -3.01%), IPOX Asia-Pacific 30 (IPTA: -2.81%) and IPOX Latin America 20 (IPXULATT: -5.63%) lagged benchmarks, we note big relative performance jumps in the IPOX China 20 (CNI:      -0.67%) and IPOX Korea 30 (IPXK30K: -0.00%).
Most significant IPOs launched (Week 12/12/2011): U.S. IPOs remain in the lead:  23 significant accessible IPOs launched last week, with the average (median) IPO gaining just 2.32% (-5.00%). The China A Share market was quiet with just one deal priced. The initial trading debut amongst the accessible deals was diverged sharply: While the median Hong Kong IPO fell -7.37%, the median U.S. IPO (led by big brand Michael Kors) rose   2.79%.

Key IPOX Strategy Indexes Returns YTD:
Ticker (BBG/Reuters)
Return
Week (%)
Return
YTD (%)
Name
IPGLC (NYSEARCA:USD)
-3.09
-17.66
IPOX Global Comp
IPGL100 (USD)
-2.99
-11.31
IPOX Global 100
IPGL50 (USD)
-2.94
-11.95
IPOX Global 50
IPGL30 (USD)
-3.17
-9.93
IPOX Global 30
IPXO (USD)
-2.39
-0.03
IPOX U.S. 100
IPXT (USD)
-2.00
-0.46
IPOX U.S. 30
IXTE (EUR)
-3.01
-20.69
IPOX Europe 30
IPTA (USD)
-2.81
-7.60
IPOX Asia-Pac. 30
IPXUEM (USD)
-3.02
-25.72
IPOX Emerging Mkts.
IPXUBRIC (USD)
-4.86
-33.17
IPOX BRIC 25
IPXUCHCP (USD)
-1.59
-25.09
China IPOX Comp.
CNI (USD)
-0.67
-24.51
China IPOX 20
IPXUCAUP (USD)
-4.57
-24.66
China IPOX Comp.
IPXULATT (USD)
-5.63
-23.42
IPOX LatAm 20
IPXK30K (KRW)
-0.00
2.26
IPOX Korea 30

Company
Ticker
Return / IPO (%)
Hosa International Ltd
2200 HK
0.00%
Chow Tai Fook Jewellery Group
1929 HK
-6.13%
New China Life Insurance Co
1336 HK
-7.37%
Zynga Inc
ZNGA US
-5.00%
Baoxin Auto Group Ltd
1293 HK
-11.29%
China Polymetallic Mining Ltd
2133 HK
-27.48%
Michael Kors Holdings Ltd
KORS US
20.50%
Nexon Co Ltd
3659 JP
-15.38%
OTO Holdings Ltd
6880 HK
-15.19%
Jive Software Inc
JIVE US
25.83%
Trade Me Ltd
TME NZ
6.67%
Much of the large relative decline amongst the key H.K.IPOs jeweler Chow Tai Fook (1929 HK: -6.13%), financial New China Life (1336 HK: -7.37%) or retailer Baoxin Auto Group (1293 HK: -11.29%) is due to the structure of the Hong Kong IPO process: While U.S. IPOs are priced one day ahead of trading, H.K. (and other Asian) IPOs face a 5-6 day pricing to trading delay during which the Hang Seng Index (HSI) plunged around 6%, affecting initial sentiment. Across other Asian markets, UBS-led NZ tech IPO Trade Me (TME NZ: +6.67%) rose, while Nexon (3659 JP: -15.38%) fell sharply. contributing to the weak showing of U.S. IPO of Zynga (ZNGA: -5.00%). Both events have a significantly negative impact on the pre-IPO valuation of Facebook.

·         Week ahead: More small-caps across Asia-Pacific
Company
Code
Country
Lead Manager
Alliance Aviation
AQZ AU  
AU
Credit Suisse  
Chiome Bio.
4583 JP  
JP
Daiwa  
Nitta Gelatin Inc
4977 JP  
JP
SMBC Nikko  
Star Flyer Inc
9206 JP  
JP
Daiwa  
Aisei Pharmacy
3170 JP  
JP
Daiwa  
Beijing Jingneng  
579 HK  
HK
DAIWA, GS,  
China Weaving  
3778 HK  
HK
Guotai Junan  
Misawa & Co Ltd
3169 JP  
JP
Mizuho  
China Tianrui  
1252 HK  
HK
DB
GS Retail Co Ltd
007070 KS  
Korea
KISC, WOORI
Perfect Shape  
1830 HK  
HK
Everbright  
SPT Energy  
1251 HK  
HK
MS, ORIENT
While the U.S. IPO pipeline is seasonally shut, micro/small-caps are scheduled for AU, H.K., Korea and Japan. Amid volatile markets, we expect a mixed initial performance for the respective deals.

Contact Us:
 
 
 
Global
Josef Schuster
+ 1 312 268 1293
 
Mary Lee
+ 1 312 268 1294
 
 
 
 
Email
josef@ipoxschuster.com  
Website
Bloomberg
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