Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The IPOX Week (01/09/12): More H.K. IPOs - Official IPOX 2011 Returns !!!

SUMMARY:

Key global benchmarks rose during a shortened trading week on increased confidence about the strength of the global economy. With profit taking in key index members, the IPOX Strategies traded mixed. Ahead of the Chinese New Year, more Hong Kong IPOs test the recovering IPO market.

HIGHLIGHTS:

·         Global equities started the new year with solid gains on renewed optimism concerning the strength of the global economy after another string of positive U.S. employment numbers. A big week in Germany equities (DAX: +2.71%) on a weaker dollar helped sentiment. Ahead of the Chinese New Year, China-linked exposure stabilized on hopes of further credit easing and good Chinese industrial products data.
·         Selling in key IPOX strategy constituents including tobacco producer Philip Morris International (PM: -1.78%), payment processor Visa (V: -0.81%), China real estate firm Evergrande Real Estate (3333 HK: -6.77%), Japanese social networker Gree Inc. (3632 JP: -4.60%) or the Macau-based Casino complex led by Wynn Macau            (-5.74%), SJM Holdings (880 HK: -3.15%) pressured the IPOX Global Strategy Portfolios: The IPOX Global 30 (IPGL30) fell by -0.20%, underperforming the MSCI World Index (MXWD) by 101 bps. on the week. Bigger losses were mitigated by a big rise in IPOX heavyweight General Motors (GM: +13.07%) on positive news related to its Volt electric car and cheap valuation.  
·         Largest recent U.S. internet IPOs under renewed selling pressure: Despite strong markets, the largest recently launched U.S.-traded technology IPOs continued to be under substantial selling pressure with daily deals website Groupon (GRPN: -13.67%) and U.S. gaming company Zynga (ZNGA -6.38%) in focus. With initial IPO investors not compensated for the risk of subscribing to the respective deals, we expect this to have a substantially negative impact on the demand for shares of Facebook Inc. by large institutions at its perceived current valuation on the one-sided pre-IPO markets.   

Key IPOX Strategies Returns YTD:
Ticker (BBG/Reuters)
Return
Week (%)
YTD 2012 (%)
Name
IPGLC (NYSEARCA:USD)
0.38
0.38
IPOX Global Comp
IPGL100 (USD)
-0.18
-0.18
IPOX Global 100
IPGL50 (USD)
0.01
0.01
IPOX Global 50
IPGL30 (USD)
-0.20
-0.20
IPOX Global 30
IPXO (USD)
1.22
1.22
IPOX U.S. 100
IPXT (USD)
1.07
1.07
IPOX U.S. 30
IXTE (EUR)
2.57
2.57
IPOX Europe 30
IPTA (USD)
-1.48
-1.48
IPOX Asia-Pac. 30
IPXUEM (USD)
1.10
1.10
IPOX Emerging Mkts.
IPXUBRIC (USD)
-1.51
-1.51
IPOX BRIC 25
IPXUCHCP (USD)
-1.66
-1.66
Chin IPOX Comp.
CNI (USD)
-3.87
3.87
China IPOX 20
IPXUCAUP (USD)
-3.00
-3.00
China IPOX Comp.
IPXULATT (USD)
1.37
1.37
IPOX LatAm 20
IPXK30K (KRW)
-0.57
-1.05
IPOX Korea 30

·         The IPOX Regional Strategy Portfolios traded mixed: While the IPOX Europe (IXTE) rose, the IPOX U.S. (FPX: ETF) traded flat and Asia and Emerging-linked IPOX strategies underperformed (IPTA, CNI, IPXK30K).
·         Most significant IPOs launched (week 01/03/2012):   
Company
Ticker
Return / IPO (%)
ETS Group Ltd
8031 HK
1.67%
Minna Padi Investama Tbk PT
PADI IJ
39.24%
Beyondsoft Corp
002649 CH
-4.82%
Chengdu Leejun Industrial
002651 CH
-8.56%
China Assurance Finance Group
8090 HK
60.71%
5 global IPOs launched last week with the average (median) IPO gaining +10.71% (-1.58%). Upside focus remained on the solid initial showing of small-cap Hong Kong IPOs which gained strongly. Both IPOs launched in the Chinese A Share markets fell last week. The strong showing in Indonesian Financial Minna Padi (+39.24%) Monday morning underlines the big momentum in Emerging Asian ECM markets, including Korea, Malaysia and Indonesia.
·         Week Ahead (01/09/2012): Hong Kong Small-Caps
Company
Code
Country
Lead Manager
Jiangsu Transport                        
300284 CH
China
China Secur.
Wenzhou Hong.                                         
300283 CH  
China
Zhong De  
Huazhong  
6830 HK  
H.K.
Guotai Junan  
Huili Resources  
1303 HK  
H.K.
EVERBRIGHT
Kai Shi China  
1281 HK  
H.K.
China Merch.
PC Partner Group
1263 HK  
H.K.
LUEN
Tiphone Mobile  
TELE IJ  
Indonesia
Sinarmas  
Ahead of the Chinese New Year, four Hong Kong IPOs are lined up for their stock market debut. These include companies related mostly to "old" economy sectors including auto body parts maker Huazhong (6830 HK), real estate developer Kai Shi China (1281 HK), mineral exploration company Huili Resources Group (1303 HK) and Circuit board maker PC Partner Group (1263 HK). While we expecte a muted initial reception to these deals, we note the recent improvement in the initial showing of select service-related Hong Kong IPOs indicating an improvement in the hard-hit Hong Kong IPO market. With this week's strong opening for Financial Minna Padi (PADI IJ), we expect upside for Tiphone Mobile (TELE IJ), a company active in the burgeoning. Indonesian mobile phone market.  

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