The IPOX® Week - May 22, 2023
Headlines:
- IPOX® 100 U.S. (ETF: FPX) gains +2.41%, taking 70 bps. from S&P 500.
- IPOX® Japan (IPJP) tops the charts as Japanese IPOs continue to impress.
- IPOX® SPAC (SPAC) gains +1.99%. Rare $550m SPAC launches in London.
- 4 IPOs launch globally last week, including PE-backed Italian Design Brands.
WEEKLY IPOX® PERFORMANCE REVIEW: Most IPOX® Indexes gained during U.S. options expiration week, with all three IPOX® ETFs outperforming their respective benchmarks. In the U.S., the IPOX® 100 U.S. (ETF: FPX) climbed +2.41% to +4.58% YTD, taking +70 bps. from the S&P 500 (ETF: SPY; +1.71%) as gains in large-cap tech stocks led U.S. equity markets higher despite ongoing concerns over the looming debt-ceiling. Technical selling and rising fears over revising inflation targets hit U.S. treasuries across the board with the long end closing in on the 4% mark. In Europe, the IPOX® Europe (ETF: FPXE) added +0.66% to +8.71% YTD, outperforming the STOXX Europe 50 benchmark (SX5L: +0.16%), while the German DAX 40 hit a new record high. Across non U.S. domicile exposure, the IPOX® International (ETF: FPXI) added +0.20% to +1.40% YTD, beating the lagging MSCI World ex-USA (MXWOU: -0.45%). Here, we note contrasting performance across our Asia-focused exposure: While the IPOX® China (CNI: -0.94%) fell anew, a big week for select IPOs and IPO M&A’s propelled the IPOX® Japan (IPJP: +3.05%) towards a 1-year high, now outperforming the growth-heavy TSE Mothers (TSEMOTHR) by a massive +1071 bps. YTD.
GINDEX® PERFORMANCE REVIEW: U.S.-domiciled acquirers of recent IPOs (IPO M&AS) gained last week, taking the GINDEX® U.S. higher (GNDX: +1.61%) and beating the Value Line Dividend Index (ETF: FVD; -0.72%). Its international counterpart GINDEX® International (GNDXI: -0.55%) fell as the U.S. dollar strengthened.
IPOX® PORTFOLIO STOCKS IN FOCUS: Amid disproportionate gains in tech stocks, the IPOX® 100 U.S. (ETF: FPX) was led by enterprise AI software firm C3.ai (AI US: +30.18%), which surged after the company raised outlooks amid “accelerating AI interest”. Other gainers included warehouse automation robot maker Symbotic (SYM US: +18.78%) and online slot machine developer Sciplay (SCPL US: +18.64%), which climbed after its majority shareholder, Las Vegas-based gambling firm Light & Wonder, offered to acquire the remaining 17% of the company it previously did not own. IBM’s 2021 spin-off Kyndryl (KD US: -17.71%), the world’s largest IT infrastructure provider, fell after reporting a decline in revenue.
In the IPOX® Europe (ETF: FPXE), British luxury car maker Aston Martin Lagonda Global (AML LN: +30.82%) topped the ranking after Chinese car giant Geely raised its stake in the company to 17%, becoming the company’s third largest shareholder. Cross border sales platform Global-e (GLBE US: +19.60%) jumped on news of an analyst upgrade at Morgan Stanley ahead of Monday’s Q1 earnings call. Ireland-headquartered fruit producer Dole (DOLE US: +10.50%) rose after topping Q1 earnings expectations on strong profits and an upbeat outlook. Swiss sports shoes maker On (ONON US: -18.80%) beat EPS expectations but plunged after missing their revenue targets.
In the IPOX® International (ETF: FPXI), Yokohama-based SoC chipmaker Socionext (6526 JP: +10.40%) climbed to a new post-IPO high, followed by Tokyo-based competitor Renesas Electronics (6723 JP: +7.93%) as the extraordinary strong performing in our Japanese holdings continues. Thailand’s electricity provider Gulf Energy (GULF TB: -9.52%) dropped after the country’s elections, with the newly elected center-left government having promised electricity tariff cuts, potentially hurting the firm’s revenue prospects. Finally, amid arbitrage interest in relation to its upcoming Milan listing, we note more strength and continued jump in average trading volume in Hong-Kong traded luxury stock Italian yacht maker Ferretti (9638 HK: +0.87%). The company is a portfolio holding in the Rakuten Global IPO Fund, an IPOX®-sub advised mutual fund available to investors in Japan.
GLOBAL IPO DEAL FLOW REVIEW AND OUTLOOK: 4 notable international IPOs started trading last week, gaining an average of +1.65% based on the difference between the final offering price and Friday's close. Private equity-backed Italian luxury furniture maker Italian Design Brands (IDB IM: +4.60%) started trading in Milan after raising $76m. The largest debut of the week was Turkish porcelain tile manufacturer Bien Yapi (BIENY TI: +0.37%), who raised $157m, while compatriot sugar producer Kayseri Seker (KAYSE TI: +6.64%) gained after raising $88m. Malaysian food supplement firm DXN Holdings (DXN MK: -5.00%) fell on debut after raising $149m. Two sizable offers are planned in Hong Kong on Thursday this week: 1) Construction services firm Horizon Construction Development (9930 HK, $223m offer) and 2) office IT services firm Edianyun (2416 HK, $90m offer).
THE IPOX® SPAC (SPAC): The Index of a selected 50 constituents trading at both the pre- and post-consummation stage added +1.99% to +3.26% YTD. IPOX® SPAC Leaders recording upside moves last week was quantum computing company IonQ (IONQ US: +39.84%) skyrocketed on Amazon’s partnership. While bowling alley chain operator Bowlero (BOWL US: -11.88%) plummeted on slower growth outlook despite another strong quarter revenue. Other SPAC news from last week: 1) 3 SPACs Announced Merger Agreement include Beard Energy Transition Acquisition (BRD US: +0.10%) with residential solar arrays and batteries provider Suntuity. 2) 1 SPAC Completed Business Combination as Goldenbridge Acquisition completed the April-approved merger with Chinese auto insurance and services provider Auto Services Group/SunCar Technology (SDA US). 3) 1 SPAC announced and/or completed liquidation. 4) 2 SPACs terminated planned mergers. 5) No new SPAC launched last week in the U.S.; London saw its largest listing YTD with Admiral Acquisition (ADMR LN) raising $550m
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Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“Content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content are solely based on the user's independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer or recommend any of the services or commentary provided by any of the market commentators/educators or service providers, and any information used to execute any trading strategies are solely based on the independent analysis of the user.
