06232008.pdf (English Version)
062320081.pdf (Chinese Version)
Some notable events during last week:
1) IPOX Global Indexes fall slightly, outperform major benchmarks: The IPOX Global Indexes recorded slight losses during F&O expiration week, outperforming the S&P 500 (SPX) and the MSCI World Index (MXWO) between 130 and 250 basis points with the IPOX-100 Global recording an outperformance of 1550 basis points versus the S&P 500 between March and June F&O expiration, one of the biggest moves on record. Focus in the global universe continued to be on Alternative Energy and Basis Materials-related issues with Blackrock and State Street involved Eurasian Natural Resources (ENRC LN) rising 11.55% on the week. Embattled Huntsman (HUN) was the biggest heavyweight loser amongst the constituents (-39.15%), after private equity controversially withdraws a takeover over. Driven by emerging markets, global IPO and spin-off activity remained brisk as 10 companies representing USD 8.6bn of market cap entered the IPOX universe.
2) SJM files, IPOs of Casino Operators: Casino and entertainment stocks continued to trade to the downside, with current IPOX constituent Melco PBL (-11.59%) and former IPOX Constituent Wynn Resorts (WYNN) (-21.48% YTD) weak, while USD 20bn casino heavyweight and 2004 IPO Las Vegas Sands (LVS, not an IPOX constituent) has seen its stock fall by almost 50% this year. At the same time, SJM, the gaming flagship of HK tycoon Stanley Ho, seeks to relaunch its IPO this week in a listing expected to raise up to USD 800m on the Hong Stock Stock Exchange.
3) Initial Returns in Chinese A share IPOs decline: With the IPOX China 30 A Share Index losing 36.96% on the year, slightly better than local benchmarks, declining initial returns of recent IPOs of A shares point to bottoms in the stock market: While the median and average IPO in the Chinese A Share market between 2007 and May 2008 returned 194.16% and 176.60% based on the difference between the final offering price and first close, respectively, initial returns of recently issued A share IPOs have declined to an average of 37.92% (average) and 31.18% (median).