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Some notable events during last week:
1) IPOX Global Indexes fall as global Financials rally: The IPOX Global Indexes retreated last week, driven by weakness in selected large- and mega cap constituents after disappointing earnings (GOOG: -9.83%, PM: -4.97%) and corporate events (EDF FP: -5.25%). Spreads moved against the IPOX Global Indexes, reversing last weeks positive performance, as a rally in Global Financials lifted the S&P 500 (SPX) and MSC World Index (MXWO). The weakness in the IPOX Global Indexes was broad, with the average and median equally-weighted constituent losing -1.04% and 1.13%, respectively. Losing stocks exceeded winning stocks by a ratio of 1.3.
2) Brazilian IPO malaise continues as OGX retreats: Latin American IPOs and spin-offs tracked by in the IPOX Latin America 20 Index continued to underperform, amid renewed weakness in OGX Petroleo (OGXP3 BZ) driven by police raids on its offices, negative analysts comments (JP Morgan’s “Underweight”) and sharply lower energy prices. The USD 15bn company has seen its share price plunge by almost 50% since its Friday, June 13th IPO. On June 9th, Merrill Lynch (MER) had dropped plans to help to manage the OGX IPO on concern the shares were overvalued.
3) First IPOX-linked investment product celebrates 3rd year anniversary with 3000 basis point outperformance: We are pleased to announce the 3rd anniversary of the launch of the first IPOX-linked SEC registered investment product distributed in the United States by Van Kampen Investment (www.vankampen.com), a subsidiary of Morgan Stanley Inc. Since product launch, the underlying index – the IPOX-30 U.S. Index (IPXT) - has recorded an annualized three-year price performance of 12.53%, while large-cap (growth) benchmarks such as the S&P 500 (SPX) and the Russell 1000 Growth Index (RLG) have recorded an annualized three-year price performance of 0.99% and 2.50%, respectively. The outperformance has been systematic, extending across years and market cycles, underlying the benefits of using IPOX for asset allocation into U.S. (and global) growth stocks.