Issue #33 | The Price of Power

ASX - Top 3 Winners & Losers
Deals Down Under - Ausgrid's $3bn Sale
Global Markets - Economic D-Day
Other News - Aussie Politics, Sport and Culture

The ASX 200 finished the week up 0.4% as blockbuster earnings from Nvidia and Salesforce reignited a global tech rally, pulling local tech stocks along for the ride. That optimism ran up against Australia's hottest inflation print in months, with core inflation holding at 3.6%, well above forecasts, pushing traders to lift the odds of a September RBA rate hike to 38% from just 17% before the data. It's a disappointing result for investors hoping for a rate cut in the near future. 

This week’s best performers

Data#3 (ASX:DTL) +18.60%

Data#3, the IT services and reseller group jumped after its FY26 result showed revenue up 6.3% to $917.4m and net profit up 13.1% to $54.5m. Recurring revenue, mostly from software and managed services, now makes up 70% of total sales, giving the business a steadier base than its one-off hardware resales. Investors also liked the board’s future plans for AI and cyber security investment through FY27, building on a record $3.4bn in gross sales for the year.

Ansell Limited (ASX:ANN) +17.45%

Ansell, the protective equipment manufacturer, rallied after FY26 sales rose 6.8% to USD2.14bn and earnings per share climbed to 148.6 US cents. Ansell's 113% cash conversion statistic caught investors' eyes, meaning profit was actually converting into cash despite its ongoing task to integrate its recent acquisition of Kimberly-Clark's PPE unit. Management reported strong balance sheet flexibility for further growth and acquisitions, which gave investors confidence there is more upside to come. 

Silex Systems (ASX:SLX) +16.63%

The company that specialises in laser-based isotope separation technology, Silex Systems, surged after reporting a near 100% jump in revenue year on year, with FY26 revenue jumping to $26.74m from $13.68m the year before. The company is still losing money, but at a slower rate, with net losses narrowing to $38.62m from $42.56m, a sign the business is edging closer to commercialising its technology rather than just burning cash on research. Having already run up around 30% over the past month, the stock shows little sign of slowing down. 

This week’s worst performers

PEXA Group (ASX:PXA) -17.53%

Regulators hit PEXA Group hard this week, with a draft recommendation to cut fees it can charge for lodging property transactions ultimately sending the stock sliding. Australia's main digital property settlement platform, PEXA operates in something close to a monopoly for that function, so a material fee cut would hit a core and recurring slice of group revenue. Despite the sell-off, PEXA has improved its profitability through its UK expansion and data arm, offering some diversification to the business. 

Generation Development Group (ASX:GDG) -16.01%

Generation Development Group, the diversified financial services company, fell despite delivering record numbers, with group funds under management reaching $46.5bn, up 37% for FY26, alongside sales inflows of roughly $9.7bn. The drop shows how a stock priced for high growth can still get punished if investors think the pace of that growth might be slowing, even when the headline results look strong. Attention has shifted to fee pressure and the cost of integrating recent acquisitions like the $320m Evidentia buy and the $1.8bn Xplore Wealth migration. 

Aussie Broadband (ASX:ABB) -13.66%

Aussie Broadband fell despite a solid FY26 result, with underlying earnings per share up 25.8% and a fully franked dividend that beat expectations by 20%. The problem was FY27 guidance, which came in below what the market expected. Statutory profit also missed, dragged down by a one-off loss on the sale of its Digital Sense business. It's the second year running that a strong reporting season hasn't been enough to keep the stock up.

New York-listed DigitalBridge has been named preferred bidder for Ausgrid's Plus Es, Australia's largest smart meter provider, in a deal valuing the business at about $3 billion. The digital infrastructure investor beat a consortium of Future Fund, Morrison and Aware Super in the final round of a long-running auction run by RBC Capital Markets, having earlier seen off KKR and Global Infrastructure Partners.

The deal hands DigitalBridge control of a business with 36% share of the smart meter market, ahead of rivals Intellihub and Bluecurrent. Plus Es supplies meters to AGL Energy, Alinta Energy, EnergyAustralia and Red Energy, and generated $150 million in earnings for the 2025 financial year after compounding at 25% annually, driven by a legal requirement for retailers to phase out old meters by 2030.

For Ausgrid, the sale caps years of shareholder disagreement over how to handle the business between NSW, IFM Investors, APG and AustralianSuper. S&P has said offloading Plus Es would reduce Ausgrid's exposure to unregulated earnings, leaving the group drawing about 90% of earnings from its regulated network operations.

DigitalBridge has framed Plus Es as sitting at the intersection of digital infrastructure and the energy transition, with the deal adding to a run of global capital treating metering networks as a new class of digital infrastructure. It follows DigitalBridge's unsuccessful tilt at Macquarie's AirTrunk in 2024, when it lost out to Blackstone and Canada Pension Plan Investment Board.

Treasury Secretary Scott Bessent unveiled a long-promised sanctions campaign against Iran on Monday, branding it an "economic D-Day." Washington applied about 60 new sanctions on entities tied to Iran's weapons trade and cyber operations, targeting five sectors Bessent called Iran's "vital lifelines": crypto assets, gold, aviation, shipping and technology. He declined to name specific countries in scope, though he pointed at nations buying Iranian oil, an unmistakable reference to China, which sources roughly half its Gulf oil through routes connected to Iran.

The announcement follows six months of war between the US, Israel and Iran that has killed thousands without producing a military breakthrough or a negotiated settlement. With the conflict deeply unpopular ahead of November's midterm elections, the sanctions campaign is widely read as an electoral tactic as much as a strategic one.

Reactions arrived quickly. Iran's economy minister called the sanctions an "economic terrorist attack" and warned the US should "expect an attack" in response. More significantly, China and Russia have given no indication they intend to comply, with Beijing calling the measures "illegal unilateral sanctions." Trump this week shrugged off questions about compliance, after reports that Putin plans to meet Iran's president.

Markets read the announcement as de-escalation rather than a prelude to renewed conflict. Brent crude fell 3.9% to $US88.58 a barrel and West Texas Intermediate dropped 3.1% to $US82.36, as traders concluded sanctions posed less risk to oil supply than a resumption of fighting.

The real test is enforcement. The UAE has already cut ties with Iran, but without China and Russia on board, two of Iran's largest economic partners, the campaign's reach is limited from the outset.

For Australia, the falling oil price eases some of the petrol price pressure that built up during the conflict, taking pressure off an input the Reserve Bank has been watching. That relief could reverse quickly if enforcement against China escalates or Iran moves on its threats to Gulf shipping.

Thanks for reading Capital Down Under till the end! If you enjoyed this week's issue, feel free to forward it to a friend – we'd really appreciate it.

Also, if you had any thoughts, tips or ideas for next week, just hit reply.