Issue #7 | ASX Up Again, Oil Surges on Middle Eastern Conflict

ASX - ASX this week, Top 3 Winners & Losers
Deals Down Under - ColCap’s Record RMBS Deal
Global Markets - Middle Eastern War Effect on Oilk
Other News - Aussie Politics, Sport, Culture and more

The ASX 200 finished 1.96% higher for the week, with investors looking past Trump’s latest tariff hike as markets continue to rely on company fundamentals amid a strong Australian reporting season.

Another positive week for the ASX 200 marked an impressive 3.7% increase for February. This makes it a third consecutive monthly gain and biggest rise since May last year, as consistent earnings from heavyweight sectors such as financials and technology underpinned the rally.

ASX Movers by the Numbers:

The week’s best performers on the ASX 200 include:

In contrast, the worst performers on the ASX 200:

PLS Group Limited, a Western Australian-based lithium producer, led the ASX 200 this week, rallying 24.16% after delivering strong half-year results alongside a rebound in lithium prices. A company with strong fundamentals and balance sheet flexibility has attracted strong buyer interest as the lithium market recovers.

On the positive side, Rare Earth stocks also rallied with Iluka Resources and Lynas Rare Earths rounding out the top 3 best performers.

Leading the worst performers for the week was Austal, which only a week earlier topped the ASX 200 after securing a $4bn contract with the Australian Government. Despite the long-term outlook, last week’s rally likely triggered investors to sell on the exciting news. The drop was compounded by the release of its half-year results, where profit was below market expectations, reinforcing that reporting season is rewarding earnings delivery over headlines.

Sydney-based non-bank lender ColCap is on track to price a record $2.7 billion residential mortgage-backed securities (RMBS) deal, the largest ever from an Australian non-bank and well above its initial $1 billion target.

An RMBS transaction works by bundling thousands of home loans into a pool and issuing bonds backed by the mortgage repayments. Investors receive interest funded by borrowers’ repayments, while the lender frees up capital to write new loans. In this case, the securities are backed by a diversified book of Australian prime mortgages, including owner-occupied, investment and SMSF loans.

Strong demand from both domestic and offshore institutional investors, likely including banks, insurers and Asian and European fixed-income funds, drove the deal size higher during bookbuilding. Final pricing is expected at around 0.95% above one-month BBSW, an attractive spread for highly rated Australian mortgage credit.

One notable feature is a five-year note designed to provide duration certainty and reduce reinvestment risk for investors, a structure that broadens appeal to long-term capital.

The broader signal? Global investors are still eager to fund Australian housing credit at scale. For ColCap, locking in a large parcel of term funding lowers its cost of capital and allows it to compete aggressively on mortgage rates. For the housing market, deep RMBS demand suggests that, despite rate pressures on borrowers, funding conditions for lenders remain robust.

On 28 February 2026, the United States, alongside Israel, launched “major combat operations” against Iran, targeting nuclear facilities, ballistic-missile sites, and senior leadership after weeks of escalating tensions over uranium enrichment. In the lead-up, the Pentagon had deployed its largest Middle East force since the 2003 Gulf War. President Donald Trump said the objective was to prevent Iran from developing a nuclear weapon and weaken the regime, urging Iranians to “take over” their government following the strikes. Australian Prime Minister Anthony Albanese said Australia supports efforts to prevent nuclear proliferation while calling for de-escalation and regional stability.

Iranian authorities reported more than 400 deaths and 1,000 injuries following the initial strikes. Tehran has since retaliated against Israeli and U.S. bases across the UAE, Qatar, Kuwait, Bahrain and Jordan, widening regional instability. Trump later claimed Iran’s supreme leader Ali Khamenei and much of the country’s senior leadership were killed - a tactic to destabilise Iran’s command structure, raise succession uncertainty, and increase the risk of fragmented or unpredictable retaliation rather than coordinated state response.

Markets reacted immediately

Oil prices surged on fears supply could be disrupted, with analysts warning crude could move above US$100 per barrel, up from Friday’s US$67 level. Iran produces around 3.3 million barrels per day (~3% of global supply), and threats to close the Strait of Hormuz, through which nearly 20% of global oil flows, have heightened volatility. Gold is likely to rally as investors rotate into safe-haven assets during periods of heightened uncertainty.

The Aviation industry was severely impacted, with major airlines including Emirates and Qatar Airways rerouting or cancelling flights. Dubai’s international airport - one of the world’s largest transit hubs was damaged in Iran’s retaliatory attacks, with four staff injured and no reported deaths.

Whether the strikes achieve strategic objectives or trigger prolonged conflict will now depend on Iran’s next response and the speed of diplomatic intervention.

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