The IPOX® Week #701
IPOX® Indexes in U.S. and Europe show strength, beat benchmarks in Q3.
IPOX® 100 U.S. (ETF: FPX) +2.81% last week, defying trend as SPX drops.
Four major spin-offs line up as U.S. shutdown threatens SEC IPO filing delay.
IPOX® SPAC (SPAC) surges 5.60%. Holding Immuno-vant skyrockets, +88%.
IPOX® PERFORMANCE REVIEW: Despite September concluding as the most tumultuous month global equity markets have experienced this year, the IPOX® Indexes edged ahead of major benchmarks this quarter. In the U.S., instability was heightened after remarks from New York Fed Chief John Williams signaled the persistence of high interest rates for an extended period, causing U.S. Treasury rates to soar to levels unseen in 16 years. As investors were seeking alternative investments, all IPOX® U.S. Indexes finished the month above the major U.S. benchmarks (see below). In particular, our ESG-focused IPOX® ESG (IPXT) showed the most relative strength, taking 272 bps. and 292 bps. from the S&P 500 and Nasdaq 100 benchmarks, respectively.
Focusing on last week’s performances, the IPOX® 100 U.S. (ETF: FPX) stood out, gaining +2.81% to +6.94% YTD as key large cap holdings showed steady gains. In Europe, equities slumped initially after Italy’s reduction in growth forecast impacted overall market sentiment. Nevertheless, European stocks regained some strength by Friday, as European Union CPI cooled more than expected. Compared to other major European benchmarks, the IPOX® 100 Europe (ETF: FPXE) dropped just slightly, losing -0.40% while beating the STOXX Europe 50 anew, taking 145 bps. from the benchmark in Q3. Conversely, our Scandinavia-focused IPOX® Nordic (IPND: +0.80%) continues to defy the broader market and gained for the 6th week. The IPOX® International (ETF: FPXI) fell -0.32%, as the Chinese stock market signed off for the week-long “Golden Week” holiday. With Saudi Arabia’s IPO market showing increased activity, the IPOX® MENA (IPEV) climbed +1.50% to an impressive +18.71%.
IPOX® PORTFOLIO STOCKS IN FOCUS: The IPOX® 100 U.S. (ETF: FPX) was led by EV manufacturer Rivian (RIVN US: +17.92%), which rebounded from the week before amid announcements of a new EV plant in Georgia and an analyst upgrade. AI play Palantir (PLTR US: +13.23%) surged after receiving an U.S. Army contract. Biotech Morphic Holding (MORF US: -37.54%) continues to slump after showing non-competitive trial results for their latest drug. In the IPOX® 100 Europe (ETF: FPXE), chipmaker Arm (ARM US: +4.29%) gained after being added to the index. Swiss biopharma de-SPAC Moonlake Therapeutics (MLTX US: +9.22%) led the index amid recent promising trial results. EV maker XPeng (XPEV US: +11.68%) climbed to the top of the IPOX® International (ETF: FPXI) amid a regulatory boost for Chinese firms, relaxing rules on data security review policies. Saudi trading services firm Elm (ELM AB: +9.95%) gained as the country’s IPO pipeline sees increased activity.
IPO REVIEW AND MARKET OUTLOOK: 13 sizable IPOs listed last week, gaining an average +4.05% from offer price to Friday’s close. The largest IPO was German speciality pharma glass maker Schott Pharma (1SXP GR: +16.81%), which climbed after raising $869m, $212m of which was contributed by Qatar Holding as cornerstone investor - read the IPOX® Watch for more information. The second largest debut was by Saudi car rental firm Lumi Rental (LUMI AB: +33.64%) as the country prepares for its largest listing of the year, oil & gas firm ADES. Four firms launched Hong Kong, e.g., AI firm Beijing Fourth Paradigm (6682 HK: +0.99%, $131m offer) and car repair provider Tuhu Car (9690 HK: +9.64%, $152m offer). Chinese biotech Adlai Nortye (ANL US: -34.78%) was the only sizable listing in the U.S., plunging after raising $96m. As the looming U.S. government shutdown threatens to paralyze the IPO market, this week’s focus is on Spin-Offs as 4 large separations take effect. Monday: 1) Veralto (VLTO US), the environmental solutions business of life sciences firm Danaher is set to join the S&P 500. 2) Breakfast staple Kellogg is spinning off its cereal division, which will trade as WK Kellogg (KLG US) while its parent will rebrand to Kellanova. 3) Professional services firm Aramark will list its work uniform unit Vestis (VSTS US). Wednesday: Pharma giant Novartis lists generics unit Sandoz (SDZ SW) in Switzerland at an estimated market capitalization of up to $25 billion. Thursday: Two sizable international IPOs of Korean robotics firm Doosan Robotics (454910 KS, $315m offer) and German tank gearbox maker Renk (R3NK GR, $454m offer).
THE IPOX® SPAC (SPAC): The Index of 50 constituents at pre- and post-consummation stage surged +5.60% last week. Autoimmune diseases focused biotech Immunovant (IMVT US: +88.28%) surged as its early-stage antibody drug hit a “homerun” scenario with positive results. Bitcoin miner Bitdeer Technologies (BTDR US: -19.73%) fell as existing holders registered to sell up to 150 million shares. Other SPAC news: 1) Completed mergers include Mercato Partners Acquisition (MPRA US: +9.63%) with Brazil-based serial SaaS B2B business acquirer Nuvini Group (NVNI US: 10/2). 2) 3 SPACs announced liquidation. 3) No new SPAC launched last week in the U.S.
