The IPOX® Week - January 17, 2022
- Interest rate fears, higher risk weigh on IPOX®. IPOX® 100 Index holds the key 5000 mark.
- Focus on Saudi Arabia as Aramco, Dr. Sulaiman Al-Habib and Saudi Tadawul Group rise.
- IPOX® SPAC (SPAC) drops to -5.53% YTD. 9 new SPACs launched last week.
- 2 IPOs set to commence trading. Private Equity giant TPG Partners (TPG US) rises in debut.
Last week’s Summary: The IPOX® Indexes extended the YTD losses as asset allocation shifts away from high growth and relatively unseasoned equities continued unabated across most global regions. Amid the fears of higher U.S. rates and higher risk (VIX: +2.29%), in the United States, e.g., and ahead of earnings, the IPOX® 100 Index (ETF: FPX) declined to -7.65% YTD, lagging the U.S. equity benchmarks, but leading other innovation-focused funds for a second week with the IPOX® 100 U.S. Index (ETF: FPX) holding the key 5000 technical level on a closing basis. Except for China-linked exposure (CNI: +3.68%) and Saudi-traded stocks, declines extended to all markets abroad. We note another good week for the IPOX® Growth Infusion Index (GNDX) with the global gauge for select companies pursuing growth M&A adding +0.35% to -0.98% YTD, outperforming the benchmarks.
IPOX® Portfolio Holdings in focus: In markets abroad, we note the continued strength in Saudi-traded exposure captured in the IPOX® International (ETF: FPXI), such as global integrated oil producer Saudi Arabian Oil Co. (ARAMCO AB: +3.53%), hospital operator Dr. Sulaiman Al-Habib (SULAIMAN AB: +6.58%) and recent IPO Saudi exchange operator Saudi Tadawul Group (TADAWULG AB: +12.32%). Amongst the very recent IPOs and Spin-offs, Swedish car producer IPOX® 100 Europe (ETF: FPXE) portfolio members Volvo Car (VOLCARB SS: +9.69%) and Daimler Truck Holding (DTG GY: +8.57%) also stood out. Strength in these pockets of the IPOX® Indexes universe, however, was not enough to counter the weakness across more growth-oriented exposure in Technology and Health Care with IPOX® heavyweight Dutch payment processor Adyen (ADYEN NA: -17.39%), Norway’s warehouse robot technology firm Autostore (AUTO NO: -17.16%), U.S. biotech 10X Genomics (TXG US: -18.62%) and application software maker DigitalOcean (DOCN US: -15.89%) leading the way lower.
IPOX® 100 Index Performance and End-of-Year Returns (since 1989)
Does the IPOX® 100 INDEX (etf: fpx) start-of-year drop indicate negative end-of-year returns? Amid a broad exodus from (unseasoned) growth stocks, the IPOX® 100 U.S. Index (ETF: FPX) started 2022 with losses. In the table above, we look at some historical context to show a potential link between negative year-open returns and the respective end of year returns: On the bases of the first 10 trading days of a New Year since 1989, respectively, the index closed negative 12 times (36.36%), recording an average (median) equally-weighted drop of -4.66% (-4.72%). Negative returns recorded during the first ten trading days, however, do not seem to be indicative of negative calendar year returns with the IPOX® 100 Index (ETF: FPX) rising by an average (median) of +6.86% (+8.46%). When removing the year of the Financial Crisis (2008) as a systemic event, the average (median) return jumps to +11.51% (+11.02%), implying an average (median) upside of +19.16% (+18.67%) from last Friday through year-end 2022, for example.
* Basis for CME-traded e-mini IPOX® 100 U.S. Futures (IPOH2). *Also available in UCITS format in Europe in EUR (EFPX IM), USD (IPXE LN), and GBP (FPX LN). GNDX, SPAC and IPEV returns measured since live launch on 08/13/2021, 07/30/2020 and 11/17/2020
IPOX® SPAC INDEX (SPAC) REVIEW: The Index fell -3.23% to -5.53% YTD and +17.40% since Its 7/30/2020 live launch. SPAC news Include: 1) 1 SPACs Announced Merger Agreement include Viveon Health Acquisition (VHAQ US: +0.20%) with Suneva Medical. 2) 3 SPAC Approved Business Combinations include a) Decarbonization Plus Acquisition II with EV charger manufacturer Tritium (DCFC US: +5.54%) and Capstar with biotherapeutics Gelesis (GLS US: -32.85%). 3) SPACs reportedly in talks include: a) Catcha Investment with Indonesian online lender Akulaku; b) Social Capital Suvretta with ADHD therapy maker Akili Interactive and c) Social Capital Suvretta III with biotech ProKidney; 4) 9 new SPACs launched last week In the U.S.
IPO Deal-flow Review & Outlook: 3 sizable IPOs launched globally last week, with the average equally weighted deal falling -0.17% based on the difference between the respective final offering price and Friday’s close. Private equity giant TPG (TPG US: +11.15%) rose in its U.S. debut, the H-shares of Shanghai-traded JL MAG Rare-Earth (6680 HK: -16.57%) slumped in Hong Kong, while U.S. application software maker Justworks (JW US) delayed its U.S. IPO amid the deterioration market conditions for software deals. This week, Rhodium Enterprises (RHDM US) and single-tenant net least REIT Four Spring Capital Trust (FSPR US) are lined up. Other IPO news: a) LG Energy Solution (373220 KS) to list South Koreas biggest IPO ever towards month-end; b) more PE-backed firms eye potential IPOs such as Advent-backed Aareal Bank tech unit Aareon, Cinven-backed Swedish medical freight firm Envirotainer and Ares-backed restaurant chain operator Cooper’s Hawk; 3) car sharing marketplace Turo, Canadian eye-care product maker Bausch + Lomb, Amsterdam-based file transfer platform WeTransfer and Dortmund-based Thyssenkrupp hydrogen unit Uhde Chlorine Engineers/Nucera filed for IPO; 4) ticket reseller StubHub opts for Direct Listing.
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