The IPOX® Week #736
European IPOX® Indexes continue strong performance over benchmarks.
IPOX® Japan steady in May, widening huge gap to TSE Growth benchmark.
MENA feels pressure from record breaking Saudi Aramco secondary offer.
3 large U.S. IPOs are lining up, set to raise $1.9 billion this week.
SUMMARY: After mute economic data and market volatility during the shortened month-end fund rebalancing week (VIX: +8.30%), the IPOX® Indexes traded mixed into the weekend. U.S. bonds overshadowed equities as yields climbed at the long end on weak U.S. Treasury auctions through mid-week, reflecting uncertainty in bets of a potential Fed rate cut. Amid these gyrations, IPOX® CEO Josef Schuster discussed China's reduction in U.S. Treasury holdings with CNN Arabic (watch here), emphasizing the need for the U.S. to address its $34 trillion public debt and rising debt servicing costs, yet expressing optimism about increased role of domestic investors for U.S. Treasuries.
While the IPOX® 100 U.S. (ETF: FPX) faced pressure in select tech sector holdings, dropping -3.47% to +4.22% YTD, significant relative strength continued for European (including Nordic) exposure. The IPOX® Europe Index (ETF: FPXE) showed resilience, beating benchmarks anew and gaining +6.69% in May to +14.76% YTD, markedly outperforming both the STOXX Europe 50 and MSCI Europe, by around 300 bps. The IPOX® Nordic (IPND) continued its upward momentum as well, adding +0.83% to an impressive +19.03% YTD.
EUROPEAN IPOX® INDEXES SOAR DURING MAY
Similarly, the IPOX® Japan (IPJP: +2.03%) staged a recovery last week to end the month on a positive note (+0.55%), significantly outpacing the TSE Growth Market 250 Index, which dropped -4.46% in May. The IPOX® MENA (IPEV: -2.68%) weakened further, as oil producer Saudi Aramco’s record breaking $13.1 billion secondary offer rippled through markets in the Middle East.
IPOX® JAPAN – GAP TO TSE GROWTH BENCHMARK WIDENS TO 22.64%
Notable IPOX® holdings included IT supplier Credo Technology (CRDO US), surging +30.55% on strong Q4 earnings, and German sandal/mattress maker Birkenstock (BIRK US: +18.47%), reaching a new post-IPO high after a record earnings beat. Indonesian green energy shooting star Barito Renewables (BREN IJ: -26.89%) was selected for FTSE Global index membership and experienced a profit taking sell-off. AI robotic process automation firm UiPath (PATH US: -35.41%) plummeted on reduced guidance and a surprise CEO departure, while beverage firm Vita Coco (COCO US: +11.93%) jumped after beating earnings.
IPOX® SPAC INDEX (SPAC): The Index fell -0.58% last week to -0.54% YTD. Telehealth platform Hims & Hers (HIMS US) +22.68% continued to soar leveraging its weight-loss offering, while deSPAC veteran fantasy sports and sports betting company DraftKings (DKNG US) -13.47% plunged on Illinois tax rate hike. Only 1 SPAC announced merger targets include Integrated Wellness Acquisition (WEL US) +0.26% with Sydney, Australia-based e-commerce, social and marketing platform Btab Ecommerce Group (OTC: BBTT US). No deal completion nor new SPACs this week. Notable movers in May included EV maker Faraday Future Intelligent Electric (FFIE US), which spiked more than 1200% as meme stock trading mania returned. Satellite comms company AST SpaceMobile (ASTS US) surged more than 270% this month on deals with AT&T and Verizon.
ECM REVIEW AND OUTLOOK: 5 sizable international IPOs debuted across the accessible markets last week, gaining an average (median) of +39.74% (+46.16%). The largest listing was Cyprus-headquartered energy firm Premier Energy (PE RO: +8.97%), which gained after raising $130m in a rare IPO on the Bucharest Stock Exchange. The Hong Kong IPO market saw reports on signs of an IPO revival with three listings raising $111m, led by the $63m offer of Chinese marketing service provider Qunabox (917 HK: +59.60%).
This week will see 4 sizable listings, 3 of which will list in New York. Wednesday: Japanese space debris removal firm Astroscale (186A JP, $136m offer) will list in Tokyo, while Israeli glass nanotechnology firm Gauzy (GAUZ US, $79m) and Indian-owned aluminum product maker Novelis (NVL US, $878m) are set for Nasdaq and NYSE, respectively. Thursday: Healthcare payment software firm Waystar (WAY US) is set to raise $968m on Nasdaq.
In other IPO News: 1) Billionaire investor Bill Ackman plans to take investment firm Pershing Square public by late 2025 or early 2026. 2) Groupon founder Eric Lefkofsky's AI health tech firm Tempus has filed for an IPO after raising $1.42 billion. 3) Aussie Mexican food chain Guzman y Gomez seeks a $160m raise in Sydney this month. 4) Sneaker maker Golden Goose to list in Milan in June.
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