The IPOX® Week #725

 
 

IPOX® Indexes waver as jump in rates trumps post-earnings Momentum.
Temporary weakness draws big buyers for IPOX® MENA stock.
IPOX® International sets two year high as China, Europe rally.
Douglas, Galderma, Reddit amongst IPOs lined up to debut this week.

IPOX® PERFORMANCE REVIEW: The big jump in U.S. sovereign and corporate yields (IPOXTD: -1.00%) amid stronger-than-expected U.S. inflation numbers trumped post-earnings Momentum during Futures and Options expiration week with the IPOX® Indexes trading mixed across global regions. In the U.S., e.g., the IPOX® 100 U.S. (ETF: FPX) reversed the previous week’s gains to shed -2.15% to +6.56% YTD, in line with the performance of U.S. small-caps. Most IPOX® Portfolios investing across non-U.S. domiciled exposure, however, recorded gains last week. Renewed strength amongst top holdings on upgrades and short covering propelled the IPOX® China (CNI) by +3.22% to -4.97% YTD, e.g., while the IPOX® Europe (ETF: FPXE) added +0.56% to +11.85% YTD, driven by continued strength in European small-caps, strong earnings and takeover enthusiasm. This also benefited the IPOX® International (ETF: FPXI) which added +0.66% to +9.43% YTD, outpacing its (declining) benchmark last week. Amid renewed investor interest for European IPOs with at least two significant deals lined up in Europe, we highlight the superior long-run returns of post- vs. pre- IPO strategies (Exhibit). 

The IPOX® MENA (IPEV) portfolio focusing on Middle Eastern deal flow recorded big swings during the week: While muted earnings across a number of companies reporting drove declines towards the beginning of the week, bargain hunting and asset allocation-flows across select IPOX® exposure drove the portfolio to yet another record high towards the weekend, adding +1.25% to +14.09% YTD.  Expectations for higher interest rates and some significant declines in key portfolio holdings pressured the IPOX® Japan (IPJP) last week.

 
 

IPOX® PORTFOLIO HOLDINGS IN FOCUS:  The story of the week belonged to renewed optimism for select Chinese equities, underlined by big gains in hard-hit retailer Miniso Group (MNSO US: +15.47%) and e-commerce behemoth Pinduoduo (PDD US: +12.14%), for example.  Amid the strong momentum for European IPOs, we note more gains for a slew of the most recent deals, including German defense contractor RENK Group (R3NK GR: +13.01%), Sweden department store operator Rusta AB (RUST SS: +12.44%), German pharmaceutical glass maker Schott Pharma (1SXP GR: +6.71%) and Italy’s lottery operator P/E-backed Lottomatica (LTMC IM: +8.87%).  Amid attractive valuations and declining momentum for EV firms (TSLA US: -6.71%), the traditional European car- and truck makers continued to be bought, including Italian truck maker and European luxury RV/Morelo-linked Iveco Group (IVG IM: +9.38%), sports car maker Porsche (P911 GY: +7.60%), truck makers Daimler Trucks (DTG GY: +7.04%) and Traton SE (8TRA GY: +4.64%), all IPOX® Portfolio Holdings (ETF: FPXE and FPXI). In the IPOX® 100 U.S. (ETF: FPX), just 35/100 portfolio holdings rose, with the average (median) stock declining by -2.06% (-1.29%), slightly outperforming the applied market cap weighted IPOX® 100 U.S. Index (ETF: FPX).  

 

LIVE LAUNCH OF THE IPOX® BOND INDEXES: The IPOX® Bond Indexes are now live, offering access to U.S. dollar-denominated corporate debt from the IPOX® Universe. Designed for both passive and active financial products, these indexes aim to capture the unique returns and potential outperformance of new listings. For more information, contact info@ipox.com

 

IPO ACTIVITY AND OUTLOOK: While no sizable international IPOs listed in accessible markets, next week is set to be very active with several large profile deals, totaling $12 billion – the highest deal flow volume since September 2022. 

In the U.S., deals include Intel-backed connectivity chip maker Astera Labs (ALAB US, $534m) on the Nasdaq on 3/20, while long-awaited social media platform Reddit (RDDT US, $6.5b) and LATAM-focused healthcare services company Auna (AUNA US, $420m) will list on the NYSE 3/21. 

In Europe, German beauty retailer Douglas (DOU GR, $1.06b) is set to list in Frankfurt on 3/21, while Swiss dermatology company Galderma (GALD SW, $2.62b) will list on the SIX Swiss Exchange on 3/22 – the largest European IPO since carmaker Porsche (P911 GR, $9b) in September 2022.

Asia will see Chinese pharmaceuticals company Qyuns Therapeutics (2509 HK, $31m) and chemicals fertilizer company Migao Group (9879 HK, $124m), both listing in Hong Kong on 3/20 and 3/21, respectively. Japanese retail company Trial Holdings (141A JP, $258m) will list in Tokyo on 3/21, the largest Japan IPO since Kokusai Electric (6525 JP, $844m) in 9/2023.

Lastly, in the Middle East, Dubai's parking business Parkin (PARKIN UH, $429m), will list on the Dubai Financial Market on 3/21. The offer has been oversubscribed 165 times, signaling the continuing enthusiasm in the region. 

Last week, several firms released details on their upcoming IPO plans, e.g.:1) European private equity giant CVC Capital seeks May listing. 2) Vista Equity plans IPO for U.S. software firm Solera by year end. 3) Tech firm Ingram Micro seeks $8b valuation. 4) U.S. healthcare startup Tempus hires Morgan Stanley for IPO. 5) Intel-backed Horizon Robotics plans $500m raise in Hong Kong. 6) Messaging service Telegram and trading platform eToro mull U.S. listings. 

Follow our IPO Calendar and social media channels (e.g. Linkedin) for Updates.

 
 
Previous
Previous

IPOX® Analyst Lukas Muehlbauer on Bloomberg: Reddit’s IPO

Next
Next

The IPOX® Update 3/15/24