The IPOX® Week #678
IPOX® 100 U.S. rises, S&P 500 / Nasdaq 100 decline during expiration week.
IPOX® Health Innovation and IPOX® SMID surge on big IPO M&A boom.
IPOX® SPAC (SPAC) gains +1.81%. One U.S. SPAC launched last week.
Liquor firm ZJLD aims to revive Hong Kong market in $676m IPO this week.
WEEKLY IPOX® PERFORMANCE REVIEW: The broad-based IPOX® Indexes traded relatively flat during last week’s U.S. options expiration week with IPOX® Specialty Exposure soaring. In light of mixed U.S. and European economic data, higher U.S. interest rates across the yield curve and mute U.S. equity risk (VIX: -1.76%), the IPOX® 100 U.S. (ETF: FPX) – benchmark for key U.S. Equity Capital Markets events including IPOs, Spin-offs and IPO M&A - added +0.21% to +5.09% YTD, outperforming the S&P 500 (SPX: -0.10%), benchmark for U.S. stocks. Amid more corporate IPO M&A and the decline in select European growth stocks after the unexpectedly big jump in the British CPI increased the likelihood of further rates hikes across Europe, the IPOX® Europe (ETF: FPXE) shed -0.41% to +10.98% YTD, lagging the broad European market. With Middle-Eastern Markets closed, more weakness in the IPOX® China (CNI: -2.81%) also pressured the IPOX® International (ETF: FPXI). We also note with great interest the fantastic week for the small/mid-cap focused IPOX® SMID (IXSM: +6.08%) and biotech-focused IPOX® Health Innovation (IPHI: +5.21%), which were taken live earlier in the month. Both IPOX® Strategies surged last week as analysts predict M&A to boost the sector, identifying several IPOX® holdings as potential future acquisition targets, i.e. Karuna Therapeutics (KRTX US), Pliant Therapeutics (PLRX US) and Shockwave Medical (SWAV US), the latter being pursued by Boston Scientific (BSX US).
IPOX® PORTFOLIO STOCKS IN FOCUS: In the IPOX® 100 U.S. (ETF: FPX), the Health Care sector dominated as cancer-focused Prometheus Biosciences (RXDX US: +70.22%) skyrocketed after pharma giant Merck (MRK US) announced plans to bolster their drug portfolio by acquiring the 2021 IPO while transplantation medicine specialist Transmedics (TMDX US: +33.97%) surged to a new post IPO-high after an analyst report suggested that the firm could beat revenue estimates. Moreover, leaked trial data sent Legend Biotech (LEGN US: +31.46%) higher as results show massive perceived benefits in cancer patients. Healthcare firm Agilon Health (AGL: -12.12%) was pressured as the insider sales continued. The IPOX® Europe (ETF: FPXE) was led by Middle East-focused payments fintech Network International (NETW LN: +31.02%). The firm has extended its recent gains to +61.91% amid a bidding war between private equity firms Brookfield and CVC. Swiss biotech MoonLake Immunotherapeutics (MLTX US: +13.84%) also surged amid reports of the firm’s management meeting with a private equity investor. Swedish car maker Volvo Car (VOLCARB SS: -11.87%) plunged on worsening sentiment in the car industry. In the IPOX® International (ETF: FPXI), we note another great week for Japanese SoC chipmaker Socionext (6526 JT: +16.84%) which continues to post new post-IPO highs after doubling to +100.09% YTD. Chinese education services provider New Oriental (EDU US: +14.35%) also rose after beating revenue estimates. Taiwanese EV component supplier Yageo (2327 TT: -10.40%) fell after earnings. Other holdings reaching new post-IPO highs last week include biotech takeover candidate Apellis Pharmaceuticals (APLS US: +6.55%), Ozempic/Wegovy blockbuster diet drug maker IPO M&A Novo Nordisk (NVO US: +2.40%), medical imaging giant GE Healthcare (GEHC US: +4.99%), healthcare spin-off Haleon (HLN LN: +2.15%) and warehouse automation firm Symbotic (SYM US: +9.38%).
GLOBAL IPO DEAL FLOW REVIEW: 6 notable IPOs started trading last week, gaining an average of +8.72% based on the difference between the final offer price and Friday's close. The biggest debut belonged to Rakuten Bank (5838 JP: +37.86%), largest offer in Japan since Softbank in December 2018. 3 firms launched GDR offers in Europe: Chinese semiconductor firm Yangzhou Yangjie Electronic Technology (YJET SW: 0.00%) and industrial automation firm Zhejiang Supcon Technology (SUPCON SW: +0.22%) launched in Switzerland, while Taiwanese pharma firm PharmaEssentia (PHECR LX: -7.08%) listed in Luxembourg. Electrical engineering firm Europower Enerji (EUPWR TI: +10.00%) hit its daily limits after its debut in Turkey. Indonesian EV industry supplier Merdeka Battery Materials (MBMA IJ: +11.32%) gained in Jakarta debut. In London, engineering company Dowlais (DWL LN: -17.81%) started trading independently at a $2b market cap after its spin off from car industry supplier Melrose Industries (MRO LN).
UPCOMING DEALS: 3 sizable IPOs are planned for this week. Tuesday: Japanese investment management firm Rheos Capital Works (7330 JP, $32m offer). Thursday: Chinese baijiu liquor producer ZJLD (6979 HK, $676m offer) – first company of its kind to list outside Mainland China; Contract researcher MedSci Healthcare (2415 HK, $86m)
OTHER NEWS: 1) Event ticketing company SeatGeek files for U.S. IPO after previous $1b valuation. 2) Italian gambling firm Lottomatica prices $660m Milan IPO. 3) British Co-operative Bank mulls IPO, estimated at £1.3b value. 4) French carmaker Renault picks banks for Q4 IPO of EV unit Ampere. 5) China aims to encourage Hong Kong IPOs of mainland firms.
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THE IPOX® SPAC (SPAC): The Index added +1.81% to +5.29% YTD. The biggest movers included telemedicine company Hims & Hers Health (HIMS US: +19.67%). While Iceland-based Humira biosimilar developer Alvotech (ALVO US: -11.73%) continued to drop, await FDA review. Other SPAC news from last week: 1) 4 SPACs Announced Merger Agreement include ESGEN Acquisition (ESAC US: +1.33%) with Florida-based residential rooftop solar provider Sunergy Renewables. 2) 2 SPACs Approved Business Combination, both waiting for deal completion. 3) 1 SPAC announced liquidation. 4) 1 new SPAC launched last week in the U.S.
