The IPOX® Week #702
IPOX® Europe and IPOX® International beat their respective benchmarks.
IPOX® 100 U.S. (ETF: FPX) weighted down as Rivian drops on debt issuance.
Birkenstock launches $1.6B offer this week. Saudi lines up 2 largest IPOs YTD.
IPOX® SPAC (SPAC) dips 0.74%. Two SPACs launch in the U.S. last week.
IPOX® PERFORMANCE REVIEW: As earnings season looms, most of the IPOX® Indexes recorded minor losses last week. After the number of U.S. jobs climbed more than expected last month, October started with further turbulence in the bond market, sending long-term U.S. treasury yields surging towards the 5% mark as various Fed officials hinted at further possible interest rate hikes to calm the economy. In the U.S., small caps felt most of the pressure, sending the Russell 2000 (RTY: -2.22%) benchmark lower. Meanwhile, the IPOX® 100 U.S. (ETF: FPX) fell -1.33% to +5.52% YTD. Internationally, we noted sustained relative strength in the IPOX® Europe (ETF: FPXE) and IPOX® International (ETF: FPXI), which both fell slightly but surpassed their relevant benchmarks, taking another +67 bps. and +159 bps. from the STOXX 50 Europe (SX5L) and MSCI World (Ex-USA) (MXWOU) benchmarks, respectively. As concerns about global growth moved the markets, U.S. oil benchmark WTI (-8.81%) experienced its biggest weekly drop since March, dampening outlooks in the oil-rich Middle East. This led the IPOX® MENA (IPEV: -1.30%) lower to +17.16% YTD as IPO activity in the region remains brisk, with the upcoming two largest Saudi IPOs YTD. Oil drilling firm ADES ($1.2b offer) and cargo firm SAL ($678m) are imminent after strong demand.
IPOX® PERFORMANCE REVIEW: As earnings season looms, most of the IPOX® Indexes recorded minor losses last week. After the number of U.S. jobs climbed more than expected last month, October started with further turbulence in the bond market, sending long-term U.S. treasury yields surging towards the 5% mark as various Fed officials hinted at further possible interest rate hikes to calm the economy. In the U.S., small caps felt most of the pressure, sending the Russell 2000 (RTY: -2.22%) benchmark lower. Meanwhile, the IPOX® 100 U.S. (ETF: FPX) fell -1.33% to +5.52% YTD. Internationally, we noted sustained relative strength in the IPOX® Europe (ETF: FPXE) and IPOX® International (ETF: FPXI), which both fell slightly but surpassed their relevant benchmarks, taking another +67 bps. and +159 bps. from the STOXX 50 Europe (SX5L) and MSCI World (Ex-USA) (MXWOU) benchmarks, respectively. As concerns about global growth moved the markets, U.S. oil benchmark WTI (-8.81%) experienced its biggest weekly drop since March, dampening outlooks in the oil-rich Middle East. This led the IPOX® MENA (IPEV: -1.30%) lower to +17.16% YTD as IPO activity in the region remains brisk, with the upcoming two largest Saudi IPOs YTD. Oil drilling firm ADES ($1.2b offer) and cargo firm SAL ($678m) are imminent after strong demand.
IPOX® PORTFOLIO STOCKS IN FOCUS: After leading the IPOX® 100 U.S. (ETF: FPX) the week before, EV manufacturer Rivian (RIVN US: -22.08%) dropped to +2.67% YTD following the announcement of a convertible debt offering and preliminary Q3 sales that were in line with Wall Street expectations. Internet connectivity provider Credo Technology (CRDO US: +13.11%) rose after Barclays initiated coverage with an Overweight rating on robust AI growth. Eye pharma firm Apellis Pharmaceuticals (APLS US: +7.86%) climbed after getting upgrades at Citi, BofA and JPMorgan, despite another setback on drug side effects. The IPOX® Europe (ETF: FPXE) and IPOX® International (ETF: FPXI) were led by Italian pharmaceutical glass manufacturer Stevanato (STVN US: +8.65%) after upsizing growth forecast on GLP-1 diet drug demand, while Sweden-based materials firm Alleima (ALLEI SS: +7.15%) climbed to a new post-IPO high. In the IPO M&A-focused GINDEX® U.S. Index (GNDX), Pioneer Natural Resources (PXD US: +3.43%) climbed Friday after interest from oil giant Exxon Mobil to purchase the Texas-based oil & gas prospector for about $60 billion.
IPO REVIEW: 7 sizable IPOs listed last week, gaining an average +20.98% from offer price to Friday’s close. After German tank gearbox maker Renk (R3NK GR) cancelled their offer last minute, the largest IPO was Korean robotics firm Doosan Robotics (454910 KS: +99.23%), which doubled in value to $2.5 billion market cap after raising $315m in Seoul’s largest listing this year. In a rare move for the Greek Stock Exchange, Optima Bank (OPTIMA GA: +0.00%, $160m offer) launched the first IPO of a Greek bank in 17 years. Other larger listings included Chinese private equity firm Tian Tu Capital (1973 HK: -24.92%, $144m) and Japanese air purifying equipment maker Seibu Giken (6223 JP: +18.27%, $94m).
SPIN-OFF REVIEW: Last week’s special focus was on 5 large spin-offs, which fell -11.39% on average from their first open to Friday’s close. In the U.S., Danaher’s $20 billion environmental solutions unit Veralto (VLTO US: -6.17%), Breakfast cereal maker WK Kellogg (KLG US: -24.71%) and Aramark’s work uniform maker Vestis (VSTS US: -20.00%) all dropped post-separation. Spin-offs in Europe included Sandoz (SDZ SW: +4.38%), $11 billion generics unit of Swiss pharma giant Novartis, and Finnish asset manager Mandatum (MANTA FH: -10.44%).
IPO MARKET OUTLOOK: 6 sizable firms are slated to list this week. Monday: Indonesian geothermal energy firm Barito Renewables Energy (BREN IJ, $204m offer) aims to capitalize on the country’s recent push for green firms to go public. Tuesday: Oman’s OQ Gas Networks (OQGN OM, $772m) will list in the country’s largest IPO to date, floating 49% of the company. The same day, two listings in Hong Kong are expected, staple food maker Shiyue Daotian (9676 HK, $105m) and electric bicycle maker Luyuan (2451 HK, $109m). Wednesday will see the largest listing of the week, the long-awaited launch of German footwear maker Birkenstock (BIRK US, $1.58b), which is supported by Norway’s wealth fund Norges Bank. The cornerstone investor has recently invested in several U.S. IPOs, including grocery delivery marketplace Instacart, retailer Savers Value Village and solar power equipment maker Nextracker. Friday: Australian gold miner Far Northern Resources (FNR AU, $41m).
THE IPOX® SPAC (SPAC): The Index of 50 members trading at both the pre- and post-consummation stage slightly fell -0.47% to +12.77% YTD last week. IPOX® SPAC Leaders recording the most upside moves last week was data center infrastructures provider Vertiv (VRT US: +6.91%) as multiple institutions reveal new positions. Bitcoin miner Bitdeer Technologies (BTDR US: -18.78%) continued under pressure within thinner trading volume. Other SPAC news from last week: 1) 3 SPACs Announced Merger Agreement include Project Energy Reimagined Acquisition (PEGR US: 0.00%) with decarbonization commercial transportation investment company Heramba Electric, the recent acquirer of Knorr-Bremse AG subsidiary Kiepe Electric. 2) 3 SPACs Approved/Completed Business Combinations include Fast Acquisition II completed merger with theme parks, resorts, animation, gaming, movies, and other entertainment powerhouse Falcon’s Beyond Global (FBYD US: +40.89%). 3) 1 SPAC announced liquidation after merger termination. 4) 2021 deSPAC radiopharmaceutical company Point Biopharma Global (PNT US: +85.76%) surged on Eli Lilly’s acquisition. 5) 2 new SPACs launched last week in the U.S.
