Issue #13 | Two-Week Ceasefire Lifts Markets

ASX - ASX This Week, Top 3 Winners & Losers
Deals Down Under - Banks Stay Optimistic
Global Markets - Two-Week Ceasefire
Other News - Finance, Aussie Politics, Sport and Culture

The ASX 200 had its best week since October 2022, rising a staggering 4.4%. This comes after the US and Iran reached an agreement to a two-week ceasefire based on the Strait of Hormuz reopening. However, other parties involved such as Israel, Lebanon, Pakistan and the EU are key in maintaining a ceasefire. Until complete cooperation, markets are still expected to see volatility.

This Week’s Risers

Guzman y Gomez Ltd (ASX:GYG) +36.05%

GYG had a standout week, surging on the back of strong quarterly results. Despite a rough 12 months with the share price down 35.1%, investors had plenty to cheer about. The Mexican fast-food chain confirmed it’s on track to open 32 new Australian restaurants. Additionally, their bold US expansion is starting to kick off with same-store sales up 2.2% for the quarter.

Alkane Resources Ltd (ASX:ALK) +20.81%

A strong March quarter drove an impressive week for Alkane Resources, with the gold miner producing 45,776 ounces across its NSW, VIC and Swedish mines. Its cash and bullion position surged over 50% for the quarter to $362m, giving confidence the balance sheet can provide further growth and flexibility while shielding off any unwanted commodity price volatility.

4DMedical Ltd. (ASX:4DX) +20.57%

For the third straight week, 4DMedical gets a mention, appearing back on the winners list after an appearance on the losers list last week. 4DX’s rally this week was fuelled by a broader market rebound, while its EU certification two weeks ago made it an increasingly difficult name for investors to ignore.

This Week’s Fallers

Orora Limited (ASX:ORA) -20.59%

The global packaging manufacturer, which supplies glass bottles and aluminium cans had a rough week, announcing a disappointing trading update. Their operating profit is expected to fall as the Middle East conflict disrupts major shipping routes and overland access, forcing its UAE furnace to be kept running without producing any bottles.

Yancoal Australia Ltd (ASX:YAL) -12.70%

No company-specific news drove Yancoal’s fall this week, with the coal miner caught in a broader coal sell-off as Newcastle Coal futures fell around 2%. Up over 40% year to date, Yancoal’s stock had rallied on rising coal prices following the Middle East conflict.

Droneshield Limited (ASX:DRO)-11.70%

A sudden leadership shuffle for the Australian Defence Tech company worried investors this week, with long-time CEO Oleg Vornik stepping down effective immediately and chairman Peter James announcing his retirement from the board next month. The pair along with another director came under scrutiny late last year, after they controversially sold $67m in shares, prompting a 50% share price collapse. Despite Droneshield’s internal shake-up, investors are hoping new leaders can capitalise on the surge in demand that recent geopolitical events have created for Droneshield.

Heading into 2026, Australian deal activity was building towards a big year with strong conditions and a strong economic landscape. However, in late February, the conflict in Iran escalated, shutting down the Strait of Hormuz - an integral sea passage for the global energy and shipping industry. Oil surged past US$100 a barrel, triggering a global market sell-off, leading to immense uncertainty across most industries. But has the unexpected Middle East conflict put a pause on deals in Australia?

Six weeks on, the answer from Australia’s leading bankers is mixed. 

Total M&A activity for the latest quarter reached US$31.4bn, up from US$20.3bn in the previous quarter. Goldman Sachs led the league tables, closely followed by Barclays (Barrenjoey) and UBS. In equity capital markets (ECM), Macquarie raised the most capital at US$587m, with total Australian ECM reaching US$3.9bn ($US).

For those watching from the outside, deal activity persisting through volatility may come as a surprise. However, for the bankers, not so much. Here’s what the best bankers in the country had to say:

Zac Fletcher - Goldman Sachs Australia Co-head of M&A (Per AFR)

"We've seen an increase in M&A volumes, both globally and in Australia, year to date, despite the current geopolitical backdrop." But Fletcher was equally objective about the sensitivity that has crept into dealmaking. "The backdrop, including the direction of rates, is something that we're very conscious of as we think about future activity levels."

Nick Brown - UBS Head of M&A Nick Brown (Per AFR)

"There's been a bit of a pause as people are dealing with the uncertainty. The key question is going to be the speed of that rebound." Brown also drew parallels to Trump’s Liberation Day tariffs last year, which triggered a similar pause coupled with a sharp recovery. 

Luke Salter - Macquarie Head of Equity Capital Markets Aus & NZ (Per AFR)

"Equity raising volumes and deals probably kicked off earlier in the year than historically has been the case as the market backdrop was favourable." and "Being very nimble and agile around market windows has been critical to successful deals so far this year," 

Sam Prentice - Jarden Senior Managing Director (Per The Australian)

Prentice noted that M&A activity has been “remarkably resilient”, however mentioned that many of the Q1 deals were already in the making before the conflict emerged in the Middle East. Additionally, he said that "worries about the war in the Middle East and the potential knock-on effects may have slowed things down, but they have not stopped, with the potential for IPO activity to re-accelerate as we head into the second half of the year."

It’s clear from both the numbers and the commentary that deals that were already in motion are still getting done, however, new deal flow is slowing down as boards wait for further clarity on interest rates, oil’s impact, and the conflict’s trajectory. Until the conflict shows signs of resolution, a return to full-scale deal activity seems unlikely - but Australia’s top bankers remain optimistic.

We are 40 days into the Middle East conflict, with disruptions across the Strait of Hormuz keeping oil above US$100 per barrel. But with just 88 minutes to spare before his deadline, Trump announced a two-week ceasefire with Iran.

Markets loved this.

The S&P500 jumped 2.5%, and oil dropped below US$95 per barrel amidst reports that the Strait of Hormuz (responsible for 20% of global oil flow) would reopen during the two-week ceasefire. Formal negotiations brokered by Pakistan are centred around two objectives; however, one appears to be more important, according to Trump:

“No nuclear weapon. That’s 99% of it,”

Trump was also asked if the deal would include the reopening of the Strait of Hormuz, in which he replied: 

“Yeah, but that will open up automatically,”

While Trump announced on Tuesday that they had reached an agreement, no official deal has been signed, with media describing the agreement as “extremely shaky and brittle.” There’s further doubt as Israel continued to strike Lebanon after Trump’s announcement, reminding markets to not celebrate too early since satisfying all stakeholders remains a significant hurdle.

For Australia, an end to the Middle East conflict would ease fuel prices, take pressure off the RBA and reduce the risk of further rate hikes. However, it’s important to recognise that Tuesday’s ceasefire was only ever a two-week pause, and markets may have moved too quickly.

Overnight, that fragility was exposed.

Following the collapse of 21-hour peace talks in Pakistan, Trump announced the US would begin blockading the Strait of Hormuz, a move widely seen as an escalation rather than de-escalation. Iran has warned any attempt to enforce the blockade would be treated as a breach of the ceasefire and an act of war.

For markets, this flips the narrative again. Oil prices now face renewed upside risk, inflation expectations could reaccelerate, and the brief rally in equities may prove short-lived.

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