The IPOX® Week #728
Spike in rates, risk weighs on stocks. IPOX® Internat’l records surprise gain.
IPOX® 100 U.S.: -2.34% IPOX® 100 Europe: -0.22% IPOX® Internat’l: +0.57%
IPOX® adds dynanmic strategy focusing on New Listings in Saudi Arabia.
U.S. IPO market shows Q2 appetite with UL Solutions, Rubrik filing for debuts.
IPOX® WEEKLY REVIEW: Stocks started mixed into Q2 ‘24 with big gains in interest rates (IPOXTD: -1.12%) and commodities driving a spike in U.S. equity risk (VIX: +23.21%) amid rising political tensions in the Middle East and FED speak. Solid sentiment for global equities returned towards the weekend on a blowout U.S. nonfarm payrolls report with the U.S. unemployment rate hitting a record 3.8% low while wage growth remained negligible.
In U.S. equities, e.g., the IPOX® 100 U.S. (ETF: FPX) – benchmark for the performance of U.S. domiciled IPOs and Spin-offs – started the new quarter with a loss of -2.34% to +7.98% YTD, lagging large-caps, while outperforming the Russell 2000 (RTY: -2.87%), benchmark for small-caps. Notable here is another strong week for the IPOX® U.S. ESG (IPXT), with the ESG/climate screened, broad-based portfolio declining by just -0.60% to +16.56% YTD, ahead of its benchmark.
Across non-U.S. domiciled stocks, we note another good week for the IPOX® International (ETF: FPXI) and IPOX® 100 Europe (ETF: FPXE), with European stocks listed in the U.S. remaining particularly strongly bid. While the former outpaced its benchmark by a large +181 bps. last week (to +662 bps. YTD), the latter declined just marginally to extend its relative lead YTD to +794 bps.
Amid the shortened trading week across EMEA, the IPOX® Japan (IPJP) fell back to levels not seen since mid-February, with the IPOX® Strategies focusing on MENA traded mixed with Saudi-Arabia generally outperforming.
IPOX® PORTFOLIO HOLDINGS IN FOCUS: 70% of portfolio holdings in the IPOX® 100 U.S. (ETF: FPX) fell last week, with the average (median) stock recoding a decline of -2.23% (-1.99%), slightly better than when compared to the applied market-cap weighted portfolio. Biotech de-SPAC Roivant Sciences (ROIV US: +11.39%) gained after positive trial results and buy-back news. Secondary AI-play mobile-focused AppLovin (APP US: +8.05%) ranked second, while IPO M&A NRG Energy (NRG US: +7.50%) soared on de-leveraging and a big week for energy firms, which also involved IPOX®-held Spin-off heavyweight Constellation Energy (CEG US: +4.45%). Non-alcoholic beverage maker Vita Coco (COCO US: +7.37%) extended its rebound amid big turnover and M&A talk, while the pending finale of highly popular NCAA men's college basketball tournament March Madness (Go Boilermakers!!!) propelled sports betting firm Draftkings (DKNG US: +3.94%). Pressured by higher rates and profit-taking after the big run-up into Q1/24-end, payment processor Toast (TOST US: -7.22%), online trading platform operator Robinhood Markets (HOOD US: -8.59%), app software maker Samsara (IOT US: -10.32%) and mortgage focused Rocket Cos (RKT US: -11.00%) fell sharply.
Across non-U.S. domiciled stocks, we note the fresh all-time High in online music platform Spotify (SPOT US: +17.59%) after announcing a price hike. The firm is a current member of the IPOX® International (ETF: FPXI) and IPOX® 100 Europe (ETF: FPXE). Non-tech exposure driving relative strength also included Canadas ARC Resources (ARC CT: +7.58%), Norway’s oil driller Var Energi (VAR NO: +4.77%) and British electrical components maker takeover target Nvent (NVT US: +3.62%). In a push for German-based IPOs, Montabaur-based web services provider IONOS (IOS GY: +12.91%) extended its YTD gain to +37.74% after receiving a contract to provide secure cloud solutions for the German government. Sizeable declines were recorded amongst select IPOs traded across MENA, such as car rental firm Lumi Rental (LUMI AB: -9.30%) and driller Ades Holding (ADES AB: -9.06%) and Arabian Drilling (ARABIAND AB: -4.82%).
IPOX® SAUDI ARABIA OPPORTUNITIES: We are pleased to note the addition of the IPOX® Saudi Arabia Opportunities to our line-up of portfolios highlighted here. The strategy applies and innovative approach to capture the dynamics in the performance New Listings domiciled in Saudi Arabia by using an active portfolio management approach focused on respective stages of the IPO life cycle. For more information, please contact info@ipox.com.
IPOX® SPAC Index (SPAC): The Index fell -0.54% last week to +2.53% YTD. Biotech Roivant Sciences (ROIV US) soared +11.74% after its positive results in eye-disease study, share buyback announcement, and favorable judgment on patent case of its portfolio company. Biopharmaceutical company Disc Medicine (IRON US), however, plunged -51.65% after mixed results on key drug candidate. In SPAC activity, 3 SPACs have entered into a merger agreement include Cactus Acquisition Corp. 1 (CCTS US) announced deal with UK sustainable energy company VivoPower’s EV subsidiary Tempo at an indicative equity value of $838 million. The announcement has set the parent company 2016 deSPAC VivoPower International (VVPR US) skyrocketed +313.82% for the week. 5 SPACs closed deals with most plummeted after m merger completion. StoneBridge’s 12/19/2023 approved merger with Indonesian fintech DigiAsia Bios (FAAS US) -28.40% among all, fell least on the week. No SPACs announced liquidation. No new U.S. SPAC launched last week. TV brand advertising company Cadent announced to acquire 2021 deSPAC advertising campaigns platform AdTheorent (ADTH US) +0.31% at $3.21/share, a 17% premium to its 60-day VWAP.
IPO ACTIVITY AND OUTLOOK: The only sizable accessible IPO last week was Johnson & Johnson backed neuro-immunology biotech Contineum Therapeutics (CTNM US: -3.75%), which dropped after raising $110m in a down-sized debut priced at bottom of its range. 3M healthcare spin-off Solventum (SOLV US: +1.39%) gained amid volatility after trading independently on April 1, while 4/2 wind-power separation GE Vernova (GEV US: -12.36%) dropped sharply. No significant IPOs are planned for this week. In other news: U.S. IPO market shows optimism, as Microsoft-backed cybersecurity firm Rubrik and Illinois-based safety testing leader UL Solutions file for IPOs.
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