The IPOX® Week #696
IPOX® 100 U.S. (ETF: FPX) gains after moderately hawkish Fed remarks.
IPOX® MENA climbs back towards weekly all-time high at +19.96% YTD.
Arm and Instacart submit filings, setting the stage for September’s mega-IPOs.
IPOX® SPAC (SPAC) gains +0.48%. De-SPAC debuts show high volatility.
WEEKLY IPOX® PERFORMANCE REVIEW: The IPOX® Indexes traded higher last week, as equities in the U.S. climbed following a 3-week dip. After the annual Jackson Hole Symposium last week, closing remarks by Fed chair Powell were seen as moderately hawkish, suggesting a longer period of high rates, without necessarily signaling new hikes. As a result, long-term bond yields fell noticeably, while short-term yields picked up. As volatility came back down (VIX: -9.36%), the IPOX® 100 U.S. (ETF: FPX) climbed +0.64% to +7.53% YTD. In Europe, markets traded relatively flat as German data showed worse-than-expected business confidence and zero GDP growth in Q2. The IPOX® 100 Europe (-0.21%, ETF: FPXE) fell slightly, ending the week at +5.17% YTD. Globally, we note the highest gains in our Asia-Pacific indexes last week, which rebounded despite continuing concerns about the Chinese economy. The IPOX® International (ETF: FPXI) rose +1.38% to +1.58% YTD, taking 70 bps. from the MSCI World (ex-USA) Index (MXWOU) last week, propelled by outsized gains in select large-cap holdings. The IPOX® MENA (IPEV: +0.16%; +19.96% YTD) gained anew, finishing the week just 2 bps. short of its weekly all-time high.
GINDEX® PERFORMANCE REVIEW: Our innovative large-cap, super liquid portfolios with focus on acquirers of recent IPOs (IPO M&As) traded mixed last week. The U.S.-focused GINDEX® U.S. (GNDX: +0.47%) climbed to +9.31% YTD, while the international portfolio of the GINDEX® International (GNDXI: -0.50%) fell to +3.89% since 3/17 launch.
IPOX® PORTFOLIO STOCKS IN FOCUS: The IPOX® 100 U.S. (ETF: FPX) was led by biopharma firm Apellis Pharmaceuticals (APLS: +33.02%), which resurged after announcing that rare side effects from their eye injection treatment Syfovre are likely due to irregularities in needles, rather than the drug itself. Twinkies maker Hostess Brands (TWNK US: +19.26%) soared in late trading Friday on reports that the firm has hired investment bank Morgan Stanley to negotiate a takeover deal with potential suitors, including food giants General Mills, Mondelez, PepsiCo and Hershey. Cloud network solutions provider Extreme Networks (EXTR US: -10.69%) plunged after reporting an increase in cancelled orders amid supply chain challenges. The IPOX® 100 Europe (ETF: FPXE) saw the highest gains by Swedish air conditioning specialist Munters Group (MTRS SS: +10.58%), which rose to a new post-IPO high amid several analyst upgrades following their positive earnings surprise in the week before. Top holding Novo Nordisk (NOVOB DC: +2.14%) also reached a new weekly high, announcing that obesity drug Wegovy shows cardiovascular benefits in adults with previous heart failure. The pharma giant hopes that the results will lead to wider insurance coverage in Europe, where pure diet drugs are often exempt from subsidies. Swedish medical VR training provider Surgical Science (SUS SS: -26.76%) dropped on weak Q2 sales. In the IPOX® International, (ETF: FPXI) Chinese operator of Japan-inspired stores Miniso (MNSO US: +12.26%) continued previous momentum after beating earnings estimates. South Korean large-cap battery materials maker Ecopro BM (247540 KS: +9.78%) climbed on plans to create a joint manufacturing facility with car giant Ford in Canada. Saudi financial services firm Elm (ELM AB: +8.99%) reached a new all-time high amid continued market optimism in the region. Japanese tech investor SoftBank (9434 JP: +1.49%) also peaked after taking over the remaining 25% of chipmaker Arm from its Vision Fund, ahead of the release of Arm’s IPO filing. TV producer STAR CM Holdings (6698 HK: -42.50%) continued to plunge after halting hit show The Voice of China, following the death of a former cast member amid allegations of mistreatment by the firm.
GLOBAL IPO DEAL FLOW REVIEW AND OUTLOOK: 2 sizable IPOs started trading last week, gaining +14.65% from offer price to Friday’s close. Gas distribution firm Enerya Enerji (ENERY TI: +32.94%, $128m offer size) became the third successful Turkish energy IPO within the past two weeks, amid news that Borsa Istanbul leads London and Milan in 2023, having raised $2 billion from 30 listings this year. South Korean steelmaker Nexteel (092790 KS: -3.65%, $80m) fell on debut.
No significant IPOs are planned for the last week of August. Nevertheless, September is set to break several listing records: 1) Arm filed with the SEC to set the stage for the biggest IPO since Rivian in 2021, after Softbank’s acquisition of Arm’s remaining 25% stake valued the firm at $64 billion. However, analysts have started scrutinizing Arm’s filing, which highlights significant China-related risks, as the firm’s independent Chinese unit accounts for 25% of revenue. 2) Instacart’s filing on Friday announced several cornerstone investors, including Norges Bank, to purchase $400m of stock. PepsiCo has also agreed to purchase a $175m private placement. Instacart’s IPO is likely to raise more than $1b. 3) Vietnamese mobile game and app maker VNG filed to become the country’s first tech company to seek a listing in the U.S., aiming to raise $150m next month. Notably, the firm’s Zalo messenger serves more users than Facebook Messenger in Vietnam. Citigroup, Morgan Stanley, UBS and Bank of America lead the offer.
THE IPOX® SPAC (SPAC): The Index of 50 members at the pre- and post-consummation stage added +0.48% to +13.19% YTD. The largest moves in the index were seen by IT infrastructure provider Vertiv (VRT US: +10.39%, new all-time high). Kidney disease therapy biotech ProKidney (PROK US: -12.81%) fell as momentum rapidly deteriorated. Other news: 1) 2 SPACs announced merger agreement, e.g. Finnovate Acquisition (FNVT US: +0.56%) with hybrid heavy truck manufacturer Scage. 2) Mortgage firm Better (BETR: -93.18%) tanked spectacularly after consummating with Aurora Acquisition Corp. 3) EV firm Vinfast (VFS US: +346.56%) eclipsed big car makers after short squeeze. 4) 3 SPACs announced liquidation. 5) No SPAC launched last week in the U.S.
