The IPOX® Week #719
Big winning week for the IPOX® 100 U.S. (ETF: FPX) as strategy adds 3%.
Heavyweight M&A Research (9552 JP) propels IPOX® Japan (IPJP).
Concerns about secondary share sales pressures IPOX® MENA (IPEV).
Read about the IPOs set to commence trading this week below.
IPOX® PERFORMANCE REVIEW: The key IPOX® Indexes gained last week, outperforming after more earnings, economic releases and interest rate certainty drove big gyrations in equities, risk (VIX: +4.45%), fixed income and equity index spreads. The innovative FANG-free IPOX® 100 U.S. (ETF: FPX) ranked at the top of the list - our benchmark for U.S. domiciled New Listings, underlying for multiple ETFs and CME-listed Futures and Options, e.g., added +2.96% to +1.36% YTD, dodging the weekly declines in U.S. small-caps, and even solidly outpacing the Nasdaq 100 (NDX). Good Earnings, short covering across portfolio holdings typically not yet tracked in the benchmarks, and takeover speculation drove asset allocation-focused inflows into the strategy towards the weekend.
Non-U.S. domiciled IPOX® exposure continued to do well, with the exception of desolate China. Our best-performing index last week was the IPOX® Japan (IPJP), a portfolio of 40 Japan-domiciled New Listings and IPO M&A which outpaced the broad and hard-to-beat TOPIX (TPX) by a large +141 bps. We also note more relative strength across Europe-domiciled firms pooled in the IPOX® 100 Europe (ETF: FPXE), as well as across other regional and sector exposure, including IPOX® Canada (ICDX) and the ESG-screened IPOX® U.S. ESG (IPXT) which is now outpacing the S&P 500 (SPX) YTD. Fears over multiple companies lining up seeking to raise significant amounts of cash through secondary share offerings pressured equities across the MENA region last week, including the IPOX® MENA (IPEV). Finally, weak earnings weighed on M&A yardstick GINDEX® (GNDX, GNDXI) which closed out the week with slight losses.
IPOX® PORTFOLIO HOLDINGS IN FOCUS: 58/100 stocks in the IPOX® 100 U.S. (ETF: FPX) rose last week, with the average (median) equally weighted stock adding +1.41%, lagging the applied market-cap weighted index. Highest performer was alternative energy software solutions provider 2/23 IPO Nextracker (NXT US: +33.19%), followed by factory automation stock 6/22 de-SPAC Symbotic (SYM US: +23.05%) and vaccine maker 6/20 IPO Vaxcyte (PCVX US). Dodging the negatively perceived impact of several downgrades, we note the multi-year high for cloud data solutions provider heavyweight 08/20 IPO Snowflake (SNOW US: +8.02%). Ever volatile biotechs were pressured, including 4/20 IPO Immunovant (IMVT US: -8.68%) and 9/21 de-SPAC Roivant (ROIV US: -4.63%). Across non-U.S. domiciled exposure, the story of the week belonged to IPOX® TOP PICK, Japan-domiciled fintech 06/22 IPO M&A Research Institute (9552 JP: +30.64%). Amid a massive jump in volume, the key portfolio holding in the IPOX® Japan (IPJP), IPOX® International (ETF: FPXI) and long-only IPOX® sub-advised funds such as the Rakuten Global IPO Fund, soared after reporting stellar earnings. Other non-U.S. domiciled firms recording big jumps after earnings included Stockholm-based 4/21 IPO tech firm Hemnet Group (HEM SS: +20.79%), a stock held in the IPOX® 100 Europe (ETF: FPXE). More dislocations across China-domiciled stocks caused biotech Wuxi XDC (2268 HK: -29.44%) and retailer Miniso (MNSO US: -17.42%) to rank towards the bottom.
IPO MARKET REVIEW: Amid the good average performance of recent IPOs, more risk appetite and good overall earnings, significant accessible New Listings were able to price last week, with the average (median) equally-weighted deal (non-direct listing) adding +14.80% (+22.08%) based on the difference between the final offering price and the first close. Sportswear maker Helsinki-based Amer Sports (AS US) and Sodexo Spinoff Pluxee (PLX FP) ranked as the largest deals with Amer Sports (AS US) finishing the week strongly, after pricing below range.
NOTABLE GLOBAL IPOS - WEEK OF 2/5/24: Wednesday: High in demand infrastructure play Athens International Airport (AIA GA, Wed.), Japanese IT Services Provider Solize (5871 JP), Cyprus/Greek thermal imaging/electro-optical systems maker Theon International (THEON NA); Thursday: Final allocation for Saudi Pharma maker Avalon Pharma (AVALONPH AB), listings of U.S. based Insurance Provider Fortegra Group (TFG US) and biotech Kyverna Therapeutics (KYTX US).
IPOX® SPAC INDEX (SPAC): The Index of 50 constituents trading at both the pre- and post-consummation added +1.63% to -1.02% YTD, significantly better when compared to U.S. small-caps (IWM: -0.80%). IPOX® SPAC Leaders last week were aforementioned Symbotic (SYM US: +23.05%, ahead of earnings) and Immunovant (IMVT US: -8.68%, after earnings). Other SPAC news from last week include: 1) 1 SPAC Announced Merger Agreement include Global Investment (GLLI US: +0.37%) with Malaysian biotech research, medical and wellness centers operator ALPS Global Holding Berhad. 2) 3 SPACs Approved/Completed Business Combinations include Semper Paratus Acquisition (LGST US: -44.59%) approved merger with biotech Tevogen Bio (TVGN: TBA) amid an aggregate of 99.9% of the shareholders redeeming shares. 3) No SPAC announced liquidation. 4) 2021 deSPAC Science 37 (SNCE US) to be acquired at a +21.31% premium by telehealth and in-home testing diagnostic company eMed (which also acquired bankrupt deSPAC digital health firm Babylon’s UK assets in 2023. 5) No new SPAC launched last week it the U.S.
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