The IPOX® Week #705
High yields continue to put pressure on IPOX® Indexes. Q3 Earnings in focus.
IPOX® China defies downtrend in H2, outperforming regional benchmarks.
Kokusai Electric surges 45% in largest Japanese IPO since SoftBank.
IPOX® SPAC (SPAC) drops 5.17%. No SPAC launches in the U.S. last week.
IPOX® PERFORMANCE REVIEW: Global equity markets continued on negative momentum last week with most IPOX® Indexes slipping anew. In the U.S., economic indicators dominated the trading floors as University of Michigan’s Consumer Sentiment Index fell for the 3rd consecutive month, while the US Core PCE Price Index rose to a four-month high after consumer spending picked up on ongoing inflation. Despite Fed officials warning that strong data could lead to further tightening, treasury yields fell slightly, yet remaining above 5% at the long end, exerting continued pressure on stocks. As earnings season is underway, lackluster results in big tech (e.g. Meta, Alphabet), led the Nasdaq 100 Index to dip into correction territory. Our innovation-focused growth-heavy IPOX® 100 U.S. (ETF: FPX) fell -3.24% last week, lagging our global indexes, i.e., the IPOX® Europe (ETF: FPXE; -2.15%) and IPOX® International (ETF: FPXI; -1.12%). Analyzing the performance of our region-focused indexes, we note a strong showing of the IPOX® China (CNI: +3.61%), which has resisted broader Chinese market struggles in the second half of this year, compared to benchmarks.
IPOX® PORTFOLIO STOCKS IN FOCUS: The IPOX® 100 U.S. (ETF: FPX) was led by sports entertainment agency Endeavor (EDR US: +27.16%) as private equity giant Silver Lake plans to take the firm, involved in WWE and UFC martial arts brands, private. We noted disparate results in biotech as last week’s leader Neumora Therapeutics (NMRA US: +11.35%) continued momentum on positive study results, while oncology biotech Revolution Medicines (RVMD US: -33.46%) fell as cancer drug data underwhelmed, despite positive coverage from analysts. Two Swedish firms led the IPOX® Europe (ETF: FPXE), bone cement maker Bonesupport (BONEX SS: +23.97%) and excavator machinery firm Engcon (ENCONB SS: +17.55%), both surging after earnings. Amid a fallout from slumping global alternative energy stocks, Finnish EV charger firm Kempower (KEMPOWR FF: -26.49%) continued dropping, alongside German hydrogen firm Thyssenkrupp Nucera (NCH2 GR: -18.33%). This extended to the IPOX® International (ETF: FPXI), with Korean large cap battery materials firm Ecopro BM (247540 KS: -12.85%) underperforming. As Tesla scrapped discounts for the Chinese market, EV firms Li Auto (LI US: +9.72%) and Xpeng (XPEV US: +9.54%) led the index.
IPO REVIEW: 7 sizable IPOs listed last week, gaining an average +6.37% from offer price to Friday’s close. Amid continued deal-flow in the Middle East, Omani oil & gas firm OQ Gas Networks (OQGN OM: +7.14%) raised $772m in the largest IPO of the country yet. Former Hitachi-affiliated semiconductor manufacturing equipment maker Kokusai Electric (6525 JP: +44.78%) surged above $4 billion market cap, raising $734m in Japan’s largest listing since SoftBank in 2021. In Turkey, Burger King operator Tab Gida (TABGD TI: +21.00%) hit daily upside limits twice after collecting $243m in the country’s largest IPO since 2018 (in USD), attracting the highest number of subscribers yet. Indonesia-founded, China-focused and Tencent-backed delivery firm J&T Global Express (1519 HK: 0.00%) traded flat in $501m debut. In the U.S., Oklahoma City-based oil and gas producer Mach Natural Resources (MNR US: -1.05%; $190m offer) fell slightly on debut.
IPO MARKET OUTLOOK: 2 notable firms are expected to list on Thursday this week, hot pot barbeque wholesaler Guoquan Food Shanghai (2517 HK; $53m offer) and U.S. water infrastructure firm Shimmick (SHIM US; $55m offer).
THE IPOX® SPAC (SPAC): The Index of 50 constituents trading at both the pre- and post-consummation stage fell -5.17% to +1.69% YTD last week. IPOX® SPAC movers included cruise line spa operator OneSpaWorld (OSW US: +2.88%) and direct to consumer Mexican household product seller Betterware de Mexico (BWMX US: -32.24%), which collapsed as the company lowered 2023 revenue growth prospects. Other SPAC news from last week: 1) 4 SPACs Announced Merger Agreement include Feutune Light Acquisition (FLFV US: +0.28%) with EV manufacturer Thunder Power. 2) 2 SPACs Approved/Completed Business Combinations as Abri SPAC I (ASPA US) approved merger with digital marketing adtech company DLQ. While the completion date is unknown, Abri was up more than +100% before trading was halted. 3) EV maker Next.e.GO (EGOX US: -34.74%) trades below $1 just one-week post-merger 4) No SPAC announced liquidation. 5) No new SPACs launched last week in the U.S.
