The IPOX® Week #737
IPOX® 100 U.S. shows resilience vs. small caps amid mixed week.
Health Innovation and ESG-focused thematic IPOX® Indexes lead gains.
European IPOX® Indexes react to ECB rate cuts ahead of Euro 2024.
Global IPO activity heats up with several notable listings this week.
SUMMARY: In a mixed trading week for the IPOX® Indexes, Friday saw hot U.S. employment figures, challenging investor hopes for rate cuts. This pressured the IPOX® 100 U.S. (ETF: FPX), which showed relative strength against the Russell 2000 (RTY) small cap benchmark amid continued headwinds for growth stocks. Following the impressive winning streak for the IPOX® Europe (IPOE: -0.20%) and IPOX® Nordic (IPND: -0.89%) during May, both indexes recorded slight losses last week, as the ECB’s decision to cut rates for the first time since 2019 failed to bolster European equities on slightly higher-than-expected Eurozone inflation, ahead of the highly anticipated UEFA Euro 2024 soccer tournament kicking off in Germany on Friday.
Our other international indexes recorded slight gains, e.g., in the IPOX® MENA (IPEV: +0.12%) as the IPO pipeline in the Gulf region remains hot and the dust from Aramco’s record secondary offer settles. The IPOX® Japan (IPJP) added +0.47% amid Japanese government announcements plans to maintain a fiscal policy of budget surpluses to curb deflation.
The best performance last week was seen in our thematic offerings, namely the IPOX® Health Innovation (IPHI: +1.21%) and IPOX® 100 U.S. ESG (IPXT: +2.58%), which were led by biopharmaceutical firms Nuvalent (NUVL US: +20.66%) and Disc Medicine (IRON US: +15.23%), respectively. Our broad innovative ESG-focused index soared to +17.22% YTD, taking 126 bps. from the S&P 500 benchmark last week.
IPOX® 100 U.S. ESG OUTPERFORMS MAJOR BENCHMARKS YTD
Other notable IPOX® holdings included autonomous driving Intel spinoff Mobileye Global (MBLY US), surging +23.46% amid a spike in call options activity, and biotech company Immatics (IMTX US: +21.21%), which continued its rise with positive phase 1 data and recent target price increases. Danish Ozempic pharma giant Novo Nordisk (NOVOB DC: +6.11%) reached a new record post-IPO high on the continuing weight-loss boom. British chipmaker Arm (ARM US: +13.32%) gained on announcing plans to dominate the PC market within five years. Indonesian green energy shooting star Barito Renewables (BREN IJ: -23.87%) continued its sell-off as FTSE Russell delayed its decision to include the firm in the FTSE Global Index. AI tech firm Samsara (IOT US: -9.93%) fell on profit taking after strong earnings. German web hosting firm IONOS (IOS GR: +7.26%) reached a new weekly post-IPO high amid a news release on its continuing share buyback program.
IPOX® SPAC Index (SPAC): The Index fell -2.77% last week to -3.29% YTD. Sustainable liquefied natural gas (LNG) company NextDecade (NEXT US) soared +8.80% following reports that the world's biggest oil company, Saudi Aramco, is in talks to sign a long-term LNG offtake deal. Digital banking app Dave (DAVE US) fell -16.51% after a recent rally. Only 1 SPAC announced a merger target including Swiftmerge Acquisition (IVCP US: +0.39%) with Italian conventional and renewable natural gas company AleAnna Energy. 3 merger approvals this week with Plutonian Acquisition completed merger with Chinese personal care product manufacturer Big Tree Cloud International Group (DSY US: -72.05%). 1 new SPAC launched this week in the U.S.
ECM REVIEW AND OUTLOOK: Last week saw high IPO activity with 20 sizable international listings that debuted across the accessible markets. Raising a total of about $3.2 billion, the average (median) gain was +4.99% (+0.22%). The largest listing was U.S. healthcare payment fintech Waystar (WAY US: -3.72%), which fell after pricing its $968m IPO at midpoint. The second largest listing was clinic operator Fakeeh Care Group (FAKEEHCA AB: +5.91%) on Saudi Tadawul, which also saw the debut of water and wastewater utility firm Miahona (MIAHONA AB: +29.91%, $148m offer), as the number of highly subscribed listings in the Middle East continues. Other notable listings included French government-backed night vision optic sensor maker Exosens (EXSENS FP: +12.50%, $375m) in Paris, J&J-backed neuroscience biotech Rapport Therapeutics (RAPP US: +22.35%, $136m) on Nasdaq, and UK government-backed Japanese space debris removal firm Astroscale (186A JP: +18.71%, $134m).
Notable listings this week include Tencent/Softbank/Google-backed, MIT quantum physicist-founded drug discovery firm QuantumPharm (2228 HK, $114m offer) on Thursday, as well as three large listings on Friday: 1) Arm-backed low-cost hobby PC maker Raspberry Pi is set to raise $229m in a welcome boost for London’s stock exchange. 2) Australia-listed cancer radiopharmaceutical specialist Telix Pharmaceuticals plans to raise $202m in a Nasdaq offer of American Depositary Shares (ADRs). 3) Chicago-based healthcare data analytics firm Tempus AI (TEM US), led by Groupon co-founder Eric Lefkofsky, plans to raise $400m.
In other IPO News: 1) Two South Korean firms are planning U.S. market entries: Travel app Yanolja aims for a $7-9 billion valuation, raising $400m, while comic publisher Naver Webtoon files for a $500m IPO. 2) French pharma firm Sanofi is moving ahead with consumer health spin-off, follows GSK (Haleon), J&J (Kenvue). 3) Fast fashion giant Shein is taking further steps for a London float at $64b valuation.
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