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Some notable events during last week:
1) IPOX Global Indexes underperform, spreads to US benchmarks plunge: The IPOX Global Indexes underperformed last week as spreads versus the main US indexes suffered one of the biggest drops on record, driven by a fundamental shift into US (and - tech- USD) (and away from emeging markets) assets on the back of receding commodity (oil) prices and political uncertainty over Russias conduct. The de-coupling in global equity markets return patterns is interesting, as China (and related H-shares) has continued to trade lower on US strength overnight. In individual large/mega-caps, global energy/materials stocks suffered most with IPOX heavyweight OAO Rosneft Oil (-16.25%), Kazakmys (-14.87%) or China Shenhua Energy (-13.66%) recording doube-digit losses. The US portion fared better with Philip Morris (PM) reaching a new post spin-off high. While IPOX Latin America Indexes fell sharply, the IPOX China Indexes and IPOX China A Shares Indexes continued to trade in line or overperform the local benchmarks.
2) Global IPO activity slow, latest US offerings produce negative initial returns: Some of the more notable US IPOs during the past weeks include Rackspace (RAX), GT Solar (SOLR), China Mass Media (CMM) or China Distance Learning (DL). All companies recorded a negative initial return and continued to trade below the offering price in aftermarket trading. Abroad, Maaden (MAADEN AB), a USD 7bn Saudi Arabian Mining Company, continuing the string of larger scale IPOs in the Arab World, saw the share price fall 20% based on the first close, still trading above the offering price.