The IPOX® Week #748
IPOX® Indexes soar anew. Interest rate outlook, tech rotation drives IPOX®.
IPOX® U.S. (FPX): +2.8%, IPOX® Int’l (FPXI): +2.5%, IPOX® EU (FPXE): +3.2%
Our select list of 5 IPOX® Portfolio Holdings setting fresh records.
IPO pipeline opens up with plans for giants Schenker, Kioxia, Tokyo Metro.
OVERVIEW: The IPOX® Equity Indexes soared last week to close on top of the equity indexes performance rankings anew. Underlying driver continued to be the potent mix of 1) Soaring IPOX® Corporate Bond Indexes prices amid U.S. rate cut outlook, 2) Good earnings and 3) Speculation about potential Corporate Actions involving IPOX® Holdings. In the U.S., the IPOX® 100 U.S. ETF (FPX), leading benchmark for the performance of IPOs and Spin-offs, extended its recent massive rally by +2.79% to +8.38% YTD last week, outperforming the S&P 500 (SPX) and lagging Nasdaq 100 (NDX), by +134 bps. and +190 bps., respectively. Big gains extended to Markets abroad: The IPOX® International ETF (FPXI) jumped +2.52% to +15.62% YTD, while the IPOX® 100 Europe (ETF: FPXE) rocketed higher by +3.24% to +18.97% YTD. Both fully rebalanced Portfolios closed the week at a fresh Y/Y high and further recovered the post-Covid losses.
Other notable index movers included the IPOX® Health Innovation (IPHI), with huge gains amongst select unseasoned health care sector plays, such as prostate surgery firm Procept Biorobotics (PRCT US: +22.66%) after new FDA clearance, propelling the portfolio by a massive +4.01% to +11.20% YTD, well ahead of the benchmark. Gains also extended to IPO M&As pooled in the GINDEX® Indexes, with its international version soaring by +3.22% to +16.84% YTD.
EARNINGS DRIVE STOCKS, TOO: In individual stocks, we note a select list of IPOX® Holdings setting a fresh weekly post-IPO High: 1) Top of the list ranks 01/22 IPO communications equipment maker Credo Technology (CRDO US: +19.82%). Amid strong earnings, driving buy-out rumors, the stock bucked recent weakness to close at its highest level on record. The stock is a member of the IPOX® 100 U.S. ETF (FPX). 2) Yubico (YUBICO SS: +9.16%): The Stockholm-based authentication-focused hardware provider and de-SPAC rose anew to a fresh post-listing High, following strong earnings and buy-out rumors. The firm is covered in the IPOX® 100 Europe ETF (FPXE) and IPOX® Nordic (IPND), e.g. 3) Galderma Group AG (GALD SE: +13.89%): The dermatology-focused Swiss specialty 03/24 IPO and IPOX® 100 Europe ETF (FPXE) member is the ultimate poster child for a successful European IPO. We remain bullish. 4) IPOX® 100 U.S. ETF (FPX) heavyweight Spin-off Carrier Global (CARR US: +5.74%) is a key global climate energy play, in particular following the acquistion of Germany’s Viessmann, which we consider to constitute a major coup. Lower Corporate rates helped the stock. 5) 04/2024 IPO IL-based UL Solutions (ULS: +4.94%) is a key safety science player and continues its post-IPO Momentum after opening a State-Of-The-Art Battery Testing Laboratory in Auburn Hills, Michigan.
IPOX® CORPORATE BOND INDEXES: Amid expectations of a September rate cut, respective Corporate Bonds linked to IPOX® Portfolio Holdings followed the strength in other Corporates and Sovereign debt and rose. The IPOX® Aggregate Composite Corporate Bonds Index (IPOXTD), e.g, added +0.73% to +4.10% YTD, a New High. In the cross-section, the IPOX® Corporate High Yield (IPXUHYG) Portfolio rose +0.76% to +6.17% YTD, while IPOX® Corporate Investment Grade (IPXULQD) surged +0.85% to +4.14% YTD.
IPOX® SPAC INDEX (SPAC): The Index rose +1.22% last week to -3.46% YTD. Digital mobile banking app Dave (DAVE US) rebounded +8.95% on large block trade. Biotech company, Humira-biosimilar developer Alvotech (ALVO US) fell -8.33% as company filed to sell shares for existing holders. 4 SPACs announced definitive target include Inflection Point Acquisition II (IPXX US) -0.19% with rare earth element magnet production supply chain company USA Rare Earth. No new SPACs launched this week in the U.S. Abnormal deSPAC movements include 2018 deSPAC AI-driven digital marketing company GD Culture (GDC US), which skyrocketed +172.50% as it launched a TikTok account to share and demystify AI news and trends. Airbnb-alike short-term apartment hotel rental company Sonder (SOND US) surged +158.40% amid long-term licensing agreement with Marriott International.
ECM REVIEW AND OUTLOOK: 23 new listings went public in global markets, gaining +17.42% (median) / +46.37% (average) from offer price to Friday’s close, raising a combined $457m in the continuing summer lull. Notable listings in accessible markets included soaring Chinese cancer therapy biotech TYK Medicine (2410 HK: +78.51%, $74m offer) in Hong Kong, Malaysian renewable power firm Elridge Energy (ELRIDGE MK: +39.66%, $45m) and South Korean automotive construction robot firm Junjin (079900 KS: +21.09%, $37m).
This week, the Indian IPO market shows continued activity with the two listings of steel construction firm Interarch Building Products ($72m) and IT solutions firm Orient Technologies ($26m). South Korean digital education firm I-Scream Media (461300 KS), used in over 93% of elementary schools in the country, is set to list Friday.
Read the latest IPOX® Update for a summary of last week’s IPO Market news, including the upcoming listings of German logistics giant Schenker, Tokyo Metro’s upcoming $2.4b listing, IPO plans for ex-Toshiba computer storage firm Kioxia, and two new large pharma-backed U.S. biotech IPOs.
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