Issue #29 | Home Advantage

ASX - Top 3 Winners & Losers
Deals Down Under - Optus’ $2bn+ Sale
Global Markets - Korea Market Crash
Other News - Aussie Politics, Sport and Culture

The S&P/ASX 200 rose for a fourth straight month, up 2.3% for July, its second-best month of 2026, and climbing 1.56% this week. The market found support from softer than expected June inflation data and the RBA reinforcing expectations that the cash rate holds at 4.35% next month. Overseas, tech-heavy Asian markets were crushed, boosting demand for the ASX as a safe haven. South Korea then rebounded with a record intraday surge of 18%, as recovery in AI backed companies SK Hynix and Samsung spilled into a rally across copper and other materials stocks locally.

This week’s best performers

WiseTech Global (ASX:WTC) +20.92%

WiseTech shares jumped after the logistics software giant announced the acquisition of FRDM.ai, an AI-powered supply chain risk platform that draws on more than 6 billion trade records to flag issues like forced labour and sanctions exposure. The deal slots into WiseTech's VerifyWise initiative, extending its compliance tools to full multi-tier supply chains, and builds on a network that already connects more than 500,000 enterprises following its e2open acquisition. It's part of a broader ASX tech rebound this week, with Xero adding 13% as beaten-down software names found buyers again. 

Lovisa Holdings (ASX:LOV) +15.49%

The jewellery retailer staged a sharp reversal after softer than expected June inflation data cut the odds of further RBA rate hikes, sparking a rotation into rate-sensitive consumer discretionary names. Lovisa's growth stock profile made it one of the biggest beneficiaries, with the rally still not enough to pull the stock out of the red, down 25.94% over the past 12 months. Whether the rally sticks depends on the RBA following through and leaving rates unchanged next month.

Viva Energy (ASX:VEA) +14.00%

The fuel and convenience retailer surged after reporting unaudited first-half EBITDA of $770-780 million, more than double the $305 million posted a year earlier, driven by a Geelong Refinery margin that more than doubled to US$21.1 a barrel. Net debt also fell to $1.7 billion from $2.1 billion. Management pointed to a regional shortage of oil supply and refining capacity as the driver, and expects margins to stay above historical averages for the rest of 2026.

This week’s worst performers

Liontown (ASX:LTR) -18.57%

The lithium miner slid despite reporting $137 million of net cash flow for the June quarter, up from $23 million a year earlier, and meeting all of its FY26 production and cost guidance. The issue was price and cost, not volume, with Liontown's average realised sale price coming in below what the market had forecasted, while all-in sustaining costs rose 5% quarter on quarter. Liontown’s cash still climbed to $561 million, up 32% for the quarter, so it looks like investors reacting to weaker prices rather than any real problem with how the mine's running.

DroneShield (ASX:DRO) -16.91%

The counter-drone company tumbled even after announcing $23.2 million in new European military contracts, as markets focused instead on FY26 revenue guidance of $250-270 million, roughly 21% below the $328 million analysts had expected. The stock is now trading 73% below its 52-week high, with half-year results due August 26 the next real test of whether the guidance reset was conservative or an actual slowdown. 

Champion Iron. (ASX:CIA) -12.56%

The iron ore miner, dual-listed on the ASX and Toronto Stock Exchange, fell after Q1 FY2027 revenue at its Quebec-based Bloom Lake mine fell 8.5% year on year to CAD 356.9 million, with net income flipping from a CAD 23.8 million profit to a CAD 41.5 million loss. The company still has a high debt load and big projects like DRPF and Kami to fund, so this quarter's numbers will add pressure on management to show costs are under control.

For 25 years, Optus has been entirely owned by Singapore's Singtel. That could be about to change, with Wellington-based infrastructure investor Morrison securing a seven-week exclusivity period to finalise a bid for more than 30 per cent of Australia's second-largest telco, in a deal that could be worth more than $2 billion.

Morrison's pitch to potential backers, delivered by New York-based chief investment officer William Smales, is built around a "bringing Optus home" narrative aimed squarely at Australia's $4.5 trillion superannuation sector, with at least six funds already in discussions to join the bidder consortium. The firm is also offering those funds "negative controls", giving minority shareholders power to block certain company decisions.

The numbers underpinning the pitch are the real hook. Morrison values its bid at six times Optus's earnings, well below Telstra's 8.7 times and TPG's 7.1 times, and argues there's room to lift postpaid pricing by 20 per cent and close an earnings margin gap to Telstra, which sits at 37.2 per cent against Optus's 27 per cent.

For Singtel, the logic runs the other way. The company first flagged considering a minority stake sale back in May, after Optus contributed to its parent's regulatory and remediation provisions and booked a writedown exiting its Optus Sport assets and talks with Brookfield over a stake last year fell through.

While Optus would be a mega-deal for Morrison, there are a few problems the telco has to manage first. It's still working through the fallout from last September's Triple Zero outage that was linked to two deaths, with the ACMA now suing Optus in the Federal Court over more than 1,000 alleged breaches of its emergency call obligations, on top of a 2022 hack that exposed millions of customers' data.

South Korea's Kospi index has gone from the best performing major market in the world to one of its worst in a matter of weeks, and retail investors are counting the cost. Tens of millions of Korean retail investors piled into leveraged single stock ETFs tracking chip giants Samsung Electronics and SK Hynix during this year's AI fuelled rally, and many are now deep underwater.

The Kospi has shed close to 40% since its June peak, with two of its worst single sessions wiping more than $2tn off the market in 48 hours. Margin debt hit a record 38.6tn won last month before the wave of forced liquidations dragged it back down, and brokerages say close to half their Samsung clients and most of their SK Hynix clients are now sitting on losses. South Korea's finance minister has since apologised over the leveraged products and flagged tighter regulation.

The trigger was a mix of factors. Regulators approved 16 leveraged ETFs tracking Samsung and SK Hynix in May, which made swings in both stocks worse once sentiment turned. That turn came as China said it had begun mass producing its own chipmaking tools, feeding fears it's closing the AI gap on Korea. SK Hynix added to the panic with plans to lift spending 50% this year, even after profit surged sixfold but missed expectations. With so many investors on margin, the falls triggered forced selling that fed further falls, a spiral some analysts say is edging toward a financial crisis.

For Australia, the fallout has been an unlikely win. The ASX 200 has spent years lagging Wall Street and Asia's tech heavy markets, largely because local tech stocks make up just 2% of the index. That weakness is now working in its favour, with global funds rotating out of Korea and into Australia's big, liquid blue chips as the AI trade wobbles. The big four banks have rallied more than 8% since June 30, with Commonwealth Bank back within striking distance of its record high, while the ASX 200 sits at a five-month high.

It's a reminder that the ASX's low exposure to tech can work both ways. The market missed most of the AI boom on the way up, but that same setup is now sheltering it on the way down.

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