AGP Executive Report

Markets & Rates: Global stocks traded mixed as Iran-war oil uncertainty kept investors jittery; the ASX 200 still managed a rebound to 8,604.7 (+1.2%) while tech-led weakness weighed abroad. RBA & Housing: The RBA warned Middle East pressures are harming housing, and NSW Treasury flagged a hit to growth forecasts after higher oil and inflation pressures. Digital Money & Banking Tech: The RBA joined Project Acacia work on tokenised wholesale markets, while iManage pushed a new “MCP Server” to connect governed business knowledge to AI tools. Governance & Super: AustralianSuper chair Don Russell told boards to stop chasing short-term deal boosts from investment banks. Energy Transition: NSW launched its biggest renewable tender (2.5GW wind/solar plus 12GWh long-duration storage) aimed at keeping power reliable as coal exits. Payments & Retail Friction: Buyers still complain about incorrect invoices and slow approvals, keeping e-invoicing pressure on.

Markets & Rates: The ASX is set for a firmer open after Wall Street steadied, but the big drumbeat is still inflation and oil. RBA assistant governor Sarah Hunter warned higher energy costs could pass through fast and lift inflation expectations, raising the risk of recession. Budget Backlash (CGT): Small business and young founders are pushing back hard on federal capital gains tax changes, arguing the new cost-base indexation and minimum tax rate will make exits and reinvestment harder. RBA Watch: Hunter’s comments land as the RBA has already reversed some easing and keeps a close eye on expectations “baking” into prices and wages. Public Sector Reform (NZ): New Zealand’s government says it will cut agencies and nearly 9,000 public servants, with AI embedded across services. Lottery Scrutiny (Vic): Victoria’s 40-year lottery licence extension is headed for auditor review over whether the process optimised value. Energy Transition (SAF): Australia’s SAF push gets a boost as the Renewable Fuel Scheme expands to low-carbon liquid fuels, aiming to reduce airline cost concerns.

Rare-earths crackdown: Australia has ordered China-linked shareholders to sell stakes in Northern Minerals, citing national-security concerns and warning of further action if needed—another escalation in the rare-earths control fight. Private markets: Bain Capital has announced the final close of Asia Fund VI at $10.5b, topping its $7b target and signalling continued appetite for Asia dealmaking. Crypto flows: Crypto funds logged $1.07b in net outflows for the week to May 16, the first negative week in seven, as Iran-linked risk sentiment pressured markets. Housing pressure: The “missing middle” theme keeps spreading, with “citizen developers” building small-scale multi-unit homes to ease supply constraints. Regional health investment: Mount Gambier’s new mental health sub-acute and rehab unit is now taking patients, doubling bed capacity as South Australia expands rural care.

Banks under pressure: Major lenders are holding back parts of Reserve Bank rate hikes on savings, with reports CBA kept 10 bps off a May rise for existing NetBank Saver customers—fueling fresh anger as savers say they’re being short-changed. Housing squeeze hits buyers fast: Budget changes are already reshaping borrowing power, with brokers warning negative gearing limits could cut new-investor loan capacity by around 30% in some cases, while 20,000 homes reserved for first-home buyers leave others locked out. Market mood turns risk-off: ASX small caps slid again as oil climbed and bond yields jumped on Middle East Strait of Hormuz fears, tightening conditions for households and governments. NZ banking fight spills into Australia: New Zealand First’s BNZ buyback talk is back in focus, but analysts warn nationalisation would send a “bad signal” to foreign investors. Critical minerals spotlight: Treasurer Jim Chalmers ordered six investors to sell Northern Minerals shares over Chinese influence concerns. Corporate drama: Rex’s former directors face ASIC action over profit expectations ahead of a $35m loss.

ASX & Capital Markets: Weebit Nano has completed a $73m raise on the ASX via a share purchase plan, issuing 3.7m new shares at $4.50 to fund scale-up and commercialisation of its ReRAM memory tech. Housing & Policy: The Albanese government has locked in a $2.4bn Queensland homes deal—51,000 new builds including 20,000 for first home buyers—backed by $2bn in federal support (grants plus zero-interest loans) aimed at unlocking roads, water and sewerage. Budget Backlash: A Newspoll snapshot shows Labor’s primary vote down to 29% and One Nation up, with Angus Taylor edging ahead as preferred PM—while many voters say housing-tax changes won’t help or will worsen things. Airline Safety: Qantas diverted a Melbourne–Dallas flight to Tahiti after a passenger allegedly bit a flight attendant, with the airline issuing a lifetime ban. Tech Governance: Higher education leaders are reacting to Canvas disruptions, highlighting how much teaching and assessment relies on third-party platforms.

Solar-Glass Push: ClearVue is teaming with Chinese partner LandVac to build solar “power-generating glass” in Hong Kong, aiming to cut building energy use by about 70% as oil-price shocks and geopolitics keep pressure on power bills. Trade-War Fallout: Australia faces a potential multi-billion-dollar bill after Landbridge sued over the Albanese government’s attempt to end the Darwin Port lease on national-security grounds. Budget Shockwaves: Housing and investment tax changes are still roiling young buyers—Housing Minister Clare O’Neil won’t guarantee they won’t end up in “negative equity,” while Treasurer Jim Chalmers plays down any post-budget popularity bounce. Markets & Banks: The week’s banking mood stays fragile after CBA-led sell-offs and broader uncertainty around how the tax settings will hit investors. Eurovision Politics: Bulgaria’s Dara wins Eurovision in a final overshadowed by protests and a boycott tied to Israel’s participation.

Housing Pressure Test: Australia’s negative gearing overhaul is being stress-tested at auctions today, with buyers already reporting fewer bidders and more first-home focus as the new rules start to bite. Policy Fallout: The budget’s tax changes remain the week’s big driver of uncertainty for property investors and renters, with “transition” expectations now front and centre. Energy Momentum: Home battery installations have now passed 400,000, with ministers pointing to grid benefits and lower wholesale prices as the policy’s payoff. Market Watch: Genus has moved to lock in a $200m equity raising to fund its $325m M&A push for MPC Kinetic, signalling continued appetite for energy-transition infrastructure deals. Coastal Safety: NSW is rolling out shark-bite trauma kits to 129 beaches, aiming to cut response times when seconds matter.

Fuel Security Watch: Anthony Albanese says Australia’s liquid-fuel position is improving, with 44 days of petrol on hand (up from last week) and 36 days of diesel, but the government has left the door ajar to extend the halved petrol excise relief beyond its end-June expiry—an assessment is promised ahead of 1 July. Housing & Tax Shockwaves: Labor’s investor-tax overhaul is still roiling markets and auctions, with experts split on whether it cools prices or simply spooks building investment. Banking Sentiment: CBA shares have been hit hard this week amid fears the budget settings will weigh on home lending and broader bank earnings. Trust Transparency Push: A new spotlight on Australia’s “one million trusts” argues discretionary trust secrecy is leaving beneficiaries in the dark and enabling asset hiding. Energy/Industry Signals: Inpex’s Ichthys LNG emissions are deemed “very low” risk by the NT regulator, though reporting documentation was criticised. Regional Finance: The ADB backed a $259,400 trade-and-green-growth technical assistance project that includes Australia-funded support for Azerbaijan.

ASX Mood Shift: Australia’s market chatter is dominated by the latest risk-off tone across Asia after Trump’s China trip failed to move the needle on Middle East tensions, with oil jumping and investors fretting about inflation and growth. Banking Spotlight: The week’s big local driver remains the CBA-led bank sell-off and the knock-on effect for the ASX 200, as traders weigh how Budget-driven tax changes could hit investor behaviour and bank earnings. Housing & Wealth: New research keeps hammering home that Gen Z and Millennials still see property as the route to financial stability and long-term wealth—despite the policy shake-up. AI in Financial Services: IAG says it’s embedding AI at scale, reporting dozens of generative AI agents and hundreds of “activators” tailoring use cases across claims, fraud and customer service. Climate Capital: Lightrock has closed a $500m climate fund with an India mandate, targeting energy access and clean cooking across emerging markets.

Housing & Tax Shock Fallout: Opposition leader Angus Taylor used his budget reply to promise a Coalition rollback of Labor’s housing tax changes—indexing tax thresholds to inflation and vowing to repeal negative gearing and capital gains tax reforms—while Labor hit back over “un-costed nonsense” and the lack of clear price-tag. Banking & Markets: The big-bank hangover is still rippling through the ASX, with Commonwealth Bank’s plunge driving broader pressure on bank stocks and sentiment. Disability Funding Fight: A campaign group backing the NDIS says new bill powers for the minister could cut whole categories of funding, risking participants’ budgets. Competition & Consumer Pressure: New Zealand’s Commerce Commission is pushing its first State of Competition report, arguing incumbents can’t hide behind “small and remote” excuses—an echo of the wider push for tougher competition policy. Energy & Cost of Living: NBN wholesale prices are set to rise again from July 1, and the federal government has secured extra diesel shipments to keep regional supply moving. Resources Watch: Maronan Metals’ early drilling at its Queensland project points to strong shallow copper-gold alongside existing silver-lead.

Markets Mood: Asia’s risk appetite stayed soft as investors digested the Trump–Xi summit and rate-hike chatter, while the NZX50 slid 0.3% with Air New Zealand down 5.8% after a fresh fuel-cost warning. Budget Fallout (Australia): The 2026–27 Budget’s tax changes—especially around capital gains—kept the spotlight on investor incentives and home/wealth planning, with business voices already pushing back. Banking & Housing Shockwave: The big theme across the week is how quickly policy shifts are feeding into bank sentiment and property expectations, with CBA-led pressure a recurring headline. Tourism Pressure (Sri Lanka): THASL warned tourism earnings could miss billions without urgent reforms, pointing to forex leakages and policy delays. Tech & Dealflow: Nitro launched Nitro Automate for AI-linked document workflows, while Mobix Labs flagged a rare-earth and critical-minerals acquisition plan tied to US defence supply chains. Energy/Geopolitics: Chevron agreed to sell SE Asian downstream assets to Eneos for $2.2bn, as demand shifts keep reshaping regional fuel markets.

Markets Jolt: Commonwealth Bank’s record 10.4% plunge after a profit miss and Budget fears around negative gearing/CGT is dragging the ASX 200 into another shaky session, with futures pointing to a softer open after a fourth straight banking-led slide. Budget Fallout: The wider investor mood is still dominated by Chalmers’ 2026 tax overhaul—plus fresh gripes that welfare and Centrelink increases were left out while trust tax changes are set to hit dozens of MPs. Policy & Pay: ACTU is pushing for award wage rises above inflation, arguing Trump’s Iran-linked war costs are squeezing low-paid workers. Crypto/Tech Risk: Canvas is back for some schools after a ShinyHunters hack, but deadlines remain looming. Corporate Moves: Burley Minerals is raising up to $1m for Pilbara drilling, while BMG has snapped up Jet’s music publishing interests. Global Watch: Asia stocks are mixed as investors split between AI optimism and Middle East-driven oil and reserve pressures.

Budget Shock to Banks: Jim Chalmers’ housing tax overhaul is still rattling the big four, with Westpac leading the NZX/ASX-style sell-off and Commonwealth Bank on track for its biggest one-day drop as investors price in higher bad-debt risk and a hit to investor demand. Housing & Wealth Fight: The core changes—negative gearing ended for new investors and capital gains discounts tightened—are being framed as “fairer” for first-home buyers, but the market is treating it as a supply-and-demand jolt that could take years to unwind. Policy Fallout: The Coalition is already promising to repeal parts of the investor tax curbs, setting up a fresh election-year tax war. Global Risk Mood: Overseas, oil and inflation worries are keeping traders cautious, while the US/China summit and Iran tensions add volatility. Other Signals: Healius shares plunged after guidance cuts, underlining how cost pressure is spreading beyond banks.

Budget 2026 Fallout: Jim Chalmers’ tax-and-housing overhaul is already sparking a political and market backlash, with the Coalition vowing to repeal negative gearing and capital gains changes, while Albanese insists the reforms won’t curb ambition and targets 75,000 first-home buyers via new-build rules and a revised CGT approach. Banking Pressure: Commonwealth Bank shares slid to a three-month low after profit growth came with higher loan-loss buffers, and arrears hit the highest level since 2019—raising fresh questions for lenders as investors reprice risk. Cyber & Education: Canvas’s parent Instructure says it reached an agreement with hackers after a major ransomware attack, returning stolen data and claiming logs were shredded—an Australia-wide hit across universities and education departments. Critical Minerals & Deals: The US and South Africa held early-stage talks in Johannesburg on critical minerals supply, while ASX rare-earth and med-tech names push into US capital markets and trials. Tech/AI & Markets: Agentic AI is moving from pilots to government priorities across Asia-Pacific, as ASX stocks react to guidance shocks and broader geopolitics.

Budget Shockwaves: Treasurer Jim Chalmers’ 2026-27 Budget doubles down on “fairness” with a housing-focused tax overhaul—negative gearing limited to new builds from next year and the 50% CGT discount replaced by inflation-adjusted indexation from July 2027—while also flagging a worst-case Iran-driven fuel/inflation scenario. Housing & Wealth Politics: The government says the changes help about 75,000 Australians into homes, but critics warn it targets the “baby boomer holy trinity” and could hit investors and supply. NDIS Pressure: Up to 160,000 people face funding cuts as the government tries to slow NDIS growth. Cyber & Identity Risk: Sophos reports 71% of organisations had an identity breach in the past year, with identity attacks driving ransomware. Payments & Data Centres: Alceon backs INSITE DC’s Australian AI data-centre pipeline; Fiserv launches Clover Reserve powered by Tabit for fine dining. Markets Mood: Shares were under pressure ahead of Budget, with banks and CSL dragged by risk-off sentiment.

Markets & Rates: ASX futures edged up as Wall Street hit fresh highs, but oil and Middle East ceasefire jitters kept a lid on risk appetite; locally, the ASX had slipped after CSL’s 16% plunge to a nine-year low, dragging healthcare and wiping about $9bn in value. Budget Watch: Treasurer Jim Chalmers is preparing a 2026/27 tax reset aimed at “resilience and reform”, with bracket creep tackled via the Working Australian Tax Offset, while negative gearing and capital gains tax concessions are still the big political fight. Household Pressure: A new survey says 42% of Aussies have under $1,000 in savings and 77% are stressed, with groceries and rent/mortgage the top worries. Business Mood: NAB data shows confidence stuck in gloom as energy costs squeeze margins and capex. Corporate & Watchdog: ASIC has launched a formal probe into DroneShield’s disclosures and share sales. Regional Moves: Vanuatu’s cabinet approved an updated Nakamal Agreement with Australia, signalling a possible compromise after months of tension.