The IPOX® Week #758
Jump in U.S. yields weighs on equities, IPOX® 100 U.S. keeps Y/Y crown.
IPOX® International and Global 50 Indexes widen gap to benchmarks.
FPXI ETF becomes first to feature Tokyo Metro after 34% surge in debut.
Strong global IPO dealflow sees 37 firms raise $10.56 billion last week.
IPOX® 100 U.S. Index: After a 7-week rally in U.S. equities, financials pressured the broader market as a jump in U.S. treasury yields across the board sent 30-year rates back above 4.50%. Heightened volatility (VIX: +12.76%) affected the broad innovation-focused IPOX® 100 U.S. Index (ETF: FPX), which fell -1.79% alongside major benchmarks, still comfortably beating the S&P 500 (+625 bps.) and Nasdaq (+379 bps.) year-over-year. As earnings season is heating up, we saw strong disparity in key holdings. Amid strong tech momentum, mobile monetization platform AppLovin (APP US: +11.30%) surged to a new post-IPO high after receiving price target upgrades ahead of earnings, while video game maker Roblox (RBLX US: +5.53%) gained on positive analyst opinions and the announcement of child-safety changes, reassuring parents after criticism in recent short seller reports. Lenders suffered from gyrations in the bond markets, sending mortgage firms Rocket Cos (RKT: -9.55%) and Mr Cooper (COOP US: -8.75%) lower. Top holding climate specialist Carrier Global (CARR US: -9.37%) weighed on the index after earnings, falling on disappointing HVAC sales, despite a rise in revenue.
GLOBAL IPOX® INDEXES: Strength in select tech holdings also lifted our global indexes, with the IPOX® International Index (ETF: FPXI) and the IPOX® Global 50 Index (IPGL50) soaring above their respective MSCI World benchmarks. Best performing international holding, Canadian software firm and IPO M&A Celestica (CLS: +20.81%) beat earnings, climbing to its highest level since 9/2000 – also lifting the strong IPOX® Canada (ICDX: +1.03%) to +25.85% YTD. Israeli work schedule management firm and index heavyweight Monday.com (MNDY US: +4.28%) received several analyst upgrades. After the recent strong run of AI-play Arm Holdings (ARM US: -6.06%), the semiconductor design firm fell as investors are concerned about the fallout from an escalating legal dispute, after Arm served Qualcomm a notice to stop creating chips based on its standards.
Despite losses in our European indexes last week, strength in Scandinavia-focused exposure propelled the IPOX® 100 Europe (ETF: FPXE) and IPOX® Nordic (IPND) to continuing extraordinary YTD outperformance, widening the gap against the hard-to-beat STOXX Europe 50 (SX5L) further to an impressive +1140 bps. YTD, as well as eclipsing the MSCI Europe/Nordic. Standout performer was Swedish cybersecurity firm Yubico (YUBICO SS: +11.56%), continuing its YTD run to +113.74%. Companies moving post-earnings included Pharma firm Swedish Orphan Biovitrum (SOBI SS: +8.65%) and Norwegian oil and gas company Vår Energi (VAR NO: +4.51%), while profit-taking in Luxembourg firm Ardagh Metal Packaging (AMBP US: -12.50%) cancelled out the surge from the week before.
THE IPOX SPAC INDEX (SPAC): The Index fell -2.38% last week to -2.32% YTD. Jordan based commercial insurer and reinsurer specialist International General Insurance (IGIC US: +10.18%) jumped on report to move London operations to the iconic “Walkie-Talkie” building, signify company growth and UK market expansion. Space 5G cellular coverage provider AST SpaceMobile (ASTS US: -8.96%) fell the most after last week’s gain. 3 SPACs announced definitive merger target include Investcorp AI Acquisition (IVCA US: 0.00%) with Australia-traded sales management and engagement software company Bigtincan (BTH AU: +5.88%). No SPAC completed merger. 4 new SPACs launched this week in the U.S. 01/2021 deSPAC digital banking platform BM Technologies (BMTX US: +42.31%) to be acquired by First Carolina Bank for $5.00/share, representing over 55% premium compared to previous close before announcement.
ECM REVIEW AND OUTLOOK: In a strong week for Asian IPOs, 37 firms debuted globally last week, raising a total of $10.56 billion, with an average (median) gain of +40.74% (+3.00%) based on the difference between final offer and Friday’s close. India’s record breaking largest-ever IPO by South Korean unit Hyundai Motor India was met with limited enthusiasm, falling -5.93% below offer price after raising $3.34 billion. In Japan, Tokyo Metro (9023 JP: +34.08%) jumped after its $2.43 billion listing. The company joined the IPOX® International Index following the successful debut, making FPXI the first ETF to feature the Japanese subway operator. In contrast, the $781 million offer of scientific X-ray device maker Rigaku (268A JP: -10.32%) fell after launch. Hong Kong saw two sizable listings with Volkswagen-backed autonomous driving firm Horizon Robotics (9660 HK: 0.00%, $696m) and bottled water giant China Resources Beverage (2460 HK: +3.56%, $649m). In the U.S., tech firm Ingram Micro (INGM US: +10.23%) raised $409 million, while the biotech IPO resurgence continued with Goldman Sachs-backed pharma firm Septerna (SEPT US: +18.89%), covered by IPOX® Research Analyst Lukas Muehlbauer in an interview with Reuters.
Focus this week remains on Asia, with the largest IPO being the $2 billion offer of Omani state-owned exploration and production unit OQEP at a valuation of around $8 billion, as well as several smaller offerings in South Korea and Hong Kong.
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