The IPOX® Week #695
IPOX® Indexes dip as U.S. long-term yields reach highest level since 2011.
IPOX® MENA reaches new peak as region’s IPOs may see resurgence in 2024.
Arm picks banks, set to list next month alongside delivery firm Instacart.
IPOX® SPAC (SPAC) falls -4.53%. Vinfast pops and drops. 1 SPAC debuts.
WEEKLY IPOX® PERFORMANCE REVIEW: The IPOX® Indexes traded lower last week, as bonds beat equities in most global markets. In the U.S., long-term treasury yields surged to their highest level in over 20 years, as concerns of persistent inflation remain, and investors wait for the outcome of next week’s Federal Reserve meeting at Jackson Hole. Amid increased volatility (VIX: +16.58%) due to poor summer liquidity and options expiration, declines in mega-cap tech names reflected a rotation out of growth firms that led the IPOX® 100 U.S. (ETF: FPX; -3.56%) lower to +6.84% YTD. Globally, new concerns about economic turmoil in China weighed on Asian markets after Country Garden, once the largest property developer in the country, highlighted default risks, while Evergrande, the second largest developer, filed for bankruptcy protection in the US. As a result, holdings in the IPOX® China (CNI: -5.17%) and IPOX® Japan (IPJP: -4.26%) weighed on the IPOX® International (ETF: FPXI), which fell -3.66% to +0.20% YTD. In Europe, the IPOX® 100 Europe (-3.40%, ETF: FPXE) slid to +5.38% YTD as concerns about slowing demand from China hit automakers and industrials. Furthermore, sticky core inflation data in the UK led to analysts predicting further rate hikes, while retail stocks fell on weak UK retail sales data, signaling cutbacks in consumer spending. Negative sentiment spared the IPOX® MENA (IPEV: +1.45%; +19.76% YTD), which climbed to a new high during last week, as analysts predict a robust IPO pipeline in the region within the next year.
GINDEX® PERFORMANCE REVIEW: Our innovative portfolios with focus on acquirers of recent IPOs (IPO M&As) traded lower last week, with the GINDEX® U.S. (GNDX: -3.31%) and GINDEX® International (GNDXI: -2.73%) dropping to performances of +8.80% YTD and +4.42% since 3/17 launch, respectively. Still, we see continued IPO M&A momentum as Swedish private equity firm EQT, a member of the IPOX® 100 Europe announced to buy German software developer Suse (SUSE GR, 2021 IPO) at a premium of 67% compared to Thursday’s closing price.
IPOX® PORTFOLIO STOCKS IN FOCUS: The IPOX® 100 U.S. (ETF: FPX) was led by tax compliance software firm Vertex (VERX US: +8.24%), continuing to climb after its post-earnings surge in the week prior. Walmart-backed warehouse automation de-SPAC Symbotic (SYM US: -13.53%) fell further on insider trading. The IPOX® Europe was topped by Norwegian vehicle shipping firm Höegh Autoliners (HAUTO NO: +14.13%), which surged to a new weekly post-IPO high after positive earnings and the announcement of dividend payments - despite reportedly negative sentiment in the car industry (e.g. Volvo Car; VOLCARB SS: -7.45%). Oil shipping firm Euronav (EURN BB: +3.53%) came second, gaining on increased commodity prices. Investment company Storskogen (STORB SS: -27.99%) plunged after Q2 earnings, citing weaker organic growth, a cautious outlook and high leverage. In the IPOX® International, IPO M&A luggage maker Samsonite (1910 HK: +12.24%) climbed after highlighting strong sales growth, expanding margins and positive growth outlook in their earnings call. Chinese operator of Japanese-inspired variety stores Miniso (MNSO US: +5.39%) gained as analysts predict strong results ahead of Tuesday’s earnings. STAR CM Holdings (6698 HK: -24.22%), TV producer of the Chinese version of hit show The Voice, tumbled after a video surfaced on Chinese social media, in which a now deceased former cast member talked about being bullied by the production team. The show’s producers faced additional backlash after calling the viral video “maliciously edited” and denying further explanations out of “respect for the deceased”.
GLOBAL IPO DEAL FLOW REVIEW AND OUTLOOK: 2 sizable IPOs started trading last week, gaining +26.29% from offer price to Friday’s close: Turkish energy firms Tatlipinar Enerji (TATEN TI: +20.98%; $58m offer) and Izdemir Enerji Elektrik (IZENR TI: +32.95%; $80m offer). 2 sizable listings are planned for this week. Monday: South Korean steelmaker Nexteel (092790 KS, $80m offer size). Tuesday: China-domiciled, cancer pharma firm Adlai Nortye (ALN US; $72m offer).
The Summer lull in new listings is showing signs of ending, as several IPOs are lining up: 1) In the U.S., Softbank-owned chipmaker Arm has picked banks, with a staggering 28 banks lining up to take part in the IPO, which is likely to be the largest IPO in 2023 at $10 billion offer size in September. Lead banks include Barclays, Goldman Sachs, JPMorgan and Mizuho Financial. 2) Grocery delivery firm Instacart is expected to file for a September listing after numerous delays over the past years. The company missed the IPO window in 2021 and has since dropped in valuation from $39b to $13b. 3) Swiss pharma giant Novartis plans to spin-off generics unit Sandoz this October, becoming a pure-play pharmaceuticals firm after previously listing eye care unit Alcon.
THE IPOX® SPAC (SPAC): The Index of 50 constituents at both the pre- and post-consummation stage dropped -4.53% to +17.99% YTD last week. The highest up-/downside movers included workforce lodging provider Target Hospitality (TH UR: +10.55%) amid news of significantly higher call option volume, and Clinical-stage pharma firm ProKidney (PROK US: -24.57%) on the back of disappointing earnings in the week prior. Other SPAC news: 1) Vietnamese EV maker Vinfast (VFS US: +34.95%) started trading on Tuesday, briefly doubling to surpass automakers Ford, GM and Mercedes-Benz in market cap before falling below its post-merger opening price. 2) Prime Number Acquisition Corp (PNAC US: +0.52%) shareholders approved the $1.3 billion merger with Japanese-Singaporean EV battery maker Noco-Noco. 3) Hainan Manaslu Acquisition Corp closed combination with Shanghai-based beauty brand managing firm Able View (ABLV US: -34.34%). 4) 1 new SPAC launched in the U.S last week.
