Issue #40 | Pricing the Fear

ASX - Top 3 Winners & Losers
Deals Down Under - Nearmap IPO
Global Markets - Hormuz attacks
Other News - Aussie Politics, Sport and Culture

The ASX 200 rose 1.03% this week, a third straight weekly gain, as miners and tech stocks bounced back from a sharp AI-led sell-off midweek. Miners, which tend to trade as a proxy for AI because of their copper exposure, led Friday’s recovery, while banks and consumer staples fell.

This week’s best performers

Wisetech Global (ASX:WTC) +11.83%
WiseTech Global, the logistics software provider, rose 11.83% in a week when ASIC closed two investigations with no-action letters, one into alleged share trading by Richard White and two employees and one into governance. That isn’t a finding on conduct, and a probe into one person who isn’t an employee is still running. The next result and integrating e2open remain the bigger tests.

Bank of Queensland (ASX:BOQ) +7.85%
Bank of Queensland’s FY26 profit rose 88% to $250m, but cash earnings, which strip out one-off items, fell 7% to $358m. The market cared more about capital, with its core buffer against losses up 70 basis points to 11.64% and a 15c special dividend helped by a $3.6bn equipment finance loan sale to Challenger. Home lending shrank 8%, and the shares are down 9% over 12 months.

Treasury Wine Estates (ASX:TWE) +7.65%
Holding guidance lifted Treasury Wine Estates, the owner of Penfolds and Wolf Blass, 7.65%. At its AGM it said underlying EBIT (earnings before interest and tax) should be at least equal to last year, with Penfolds sales in China slightly ahead of plan after tariffs were removed. But the stock now trades above Macquarie’s neutral price target, so the February half-year result is the next test.

This week’s worst performers

Vulcan Energy Resources (ASX:VUL) -17.25%
A plan by the EU to cap Chinese hybrid vehicle imports sent lithium prices lower, and Vulcan Energy, the German geothermal lithium developer, fell 17.25% with it. It reported no project setback, but as a developer with no production yet, its value rests on future lithium prices. Raising the capital it needs gets harder as the share price falls, and the September quarter report in late October should update funding.

Ingenia Communities (ASX:INA) -16.81%
Ingenia Communities, the senior community and land lease operator, fell 16.81% even though Warburg Pincus lifted its cash proposal to $5.25, labelled best and final. At $3.96, the shares sit well below that, which suggests the market doubts a deal gets done. The latest results were strong, with second-half revenue up to $301.9m and net income more than doubling to $89m, lifting net margin from 15.3% to 29.5%. But rent caps in Queensland and NSW and fines over illegal cooking bans still weigh on the business, and the proposed Peet acquisition has to be integrated without hurting margins.

Deep Yellow (ASX:DYL) -16.33%
Deep Yellow, the uranium developer behind the Tumas project in Namibia, fell 16.33% after delaying its final investment decision, the formal go-ahead to commit the full construction budget, beyond Q4 2026. Management blamed equity market conditions for limiting funding for uranium developers. Construction continues, funded from existing cash, but the shares are down 67% over 12 months and Tumas stays a project waiting on money.

A week after Firmus Technologies pulled its IPO, the next big ASX listing is already taking shape, and it’s a familiar name. Nearmap, the aerial imaging software business, left the ASX in 2022 as a $1.06bn company when private equity firm Thoma Bravo bought it at $2.10 a share. Now Thoma Bravo has reportedly hired Goldman Sachs and Barrenjoey to prepare an IPO targeting more than US$4bn ($5.75bn), over five times that exit value. That would make it the biggest deal in the pipeline, bar Glencore’s ASX debut, which doesn’t raise any new money. 

The business has changed a lot since. Nearmap was expecting US$350m of revenue for FY26 and is said to have profit margins as high as 50%. Under Thoma Bravo it has shifted from a niche aerial data provider to a property intelligence platform, competing with established players like Cotality and Verisk. Two acquisitions pushed it into insurance, with Betterview helping spot property risks and sharpen underwriting, and Itel supplying building material pricing and repair-versus-replace analysis.

The tension is the price. US$4bn values Nearmap at more than 11 times its annual revenue, and Firmus just showed what happens when investors don’t buy the story. Its forecasts leaned on data centres not yet built, more than half its shares were free to be sold as soon as it listed, and the big US investors never bid at the size the banks promised. Nearmap has real revenue and margins on its side, but it will need to limit early backers selling out, avoid late surprises and show the demand is there before it sets a price. It also has a record to answer for, as Estia Health is the latest business that struggled on the ASX but looked better in private equity’s hands. Nearmap’s numbers are strong, but after Firmus, buyers will want proof they justify US$4bn before they put money in.

The past two weeks have been the most violent for shipping since the US and Israel went to war with Iran in February. Iran has stepped up attacks on commercial ships as it tries to reassert control over the Strait of Hormuz, where the US has been escorting more tankers through. Ships reporting attacks hit a record 12 in the week to 11 October, up from 10 the week before, and Iran is now also targeting vessels off Qatar and in the Gulf of Oman. Oil moving through the strait has slipped to 12.6 million barrels a day, down from 15 million at the end of September and around 17 million before the war. Crude has climbed back to around $US106 a barrel.

Prices are staying high for two reasons. First, moving oil has become slower and more expensive, with shipowners demanding record freight rates and higher insurance to sail through the Gulf. Second, the buffers that protected markets earlier in the war have run out. The International Energy Agency says strategic stockpiles are largely run down and refining capacity is stretched, making refined fuels like diesel even tighter than crude. Ahead of the US midterms, President Donald Trump struck a deal for Russian diesel that briefly cut US diesel futures by nearly 5%, but the supply equals only about 3% of global seaborne diesel trade, and prices remain more than 80% above prewar levels.

Australia is especially exposed. It imports almost 90% of its diesel and was the largest diesel importer globally last year, and diesel now costs more than $2.50 a litre at the pump. Airlines are passing on the cost. Virgin Australia has told travel agents it is raising airfares and expects its fuel bill to rise $49 million to $700 million in the first half of FY27 now that its hedging has expired. It is also cutting seats by 3%, while Qantas plans cuts of 3 to 5%. Virgin shares have fallen more than 20% this year.

Relief looks a long way off. Oxford Economics expects crude to stay above $US100 until mid next year, and the IEA warns diesel will stay tight even if ceasefires hold. For Australia, that means fuel costs flowing into transport, food and consumer goods, adding to inflation pressure on the Reserve Bank of Australia.

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