☕️ Bullish note

Analyst research notes still matter. Don’t let anyone tell you otherwise.

July 06, 2023

Good morning.

Analyst research notes still matter. Don’t let anyone tell you otherwise.

Sometimes dismissed as mere advertising for an investment bank’s more lucrative capital markets or M&A franchises, sell side research can still move the market and shouldn’t be ignored by investors. We had a good example of that this week with one of the biggest stocks on the ASX, which we get into below.

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MARKET MOVERS

*Stock data as of the market close. Commodities and crypto data in USD.

Market News: Telstra shares outperformed the market yesterday off the back of an upgrade from UBS, which now has the stock as a ‘buy’.

UBS says that the giant telco is better positioned to pass on mobile price rises and not lose subscribers than its competitors like TPG Telecom are. And lifting prices is something you need to do in an inflationary environment like this.

Telstra earlier in the week hit the headlines after it signed a reselling deal with Elon Musk’s low-orbit satellite business, Starlink. That deal is a step-change for Telstra which has historically sought to compete with its rivals using its own infrastructure as its point of advantage.

Nevertheless it was the bullish note from UBS yesterday that lifted the stock, and if the broker’s price target of $4.75 proves accurate it would see Telstra shares hitting their highest levels since 2016.

THE QUICK SYNC

  • The US Federal Reserve sees more interest rate hikes ahead, but at a slower pace than the quickfire tightening of the past 18 months. (CNBC)

  • Telstra considered the unpredictability of Elon Musk’s business decisions before signing a deal with his satellite business Starlink. (The Guardian)

    • Telstra’s Starlink deal is the first of many partnerships it will form with satellite operators. (The Australian)

  • Buzzfeed is looking to raise US$150 million from asset sales to avoid a delisting. (The Information)

  • PWC tipped off Google about the start date of new tax laws in Australia. (Reuters | Yahoo Finance)

TRADING FLOOR

M&A:

  • Nib acquires NDIS marketplace platform Kynd. (BNA)

  • Worldwide Hotels Group subsidiary purchased Novotel & ibis Melbourne Central Hotel for $170m. (BNA)

  • MYOB has entertained informal offers for PayGlobal. (AFR)

  • Credit funds are understood to be preparing financing packages to lob at Star Entertainment. (AFR)

  • Johns Lyng Group has agreed to buy Smoke Alarms Australia and Linkfire after raising $65m. (AFR)

  • Wyloo has increased its interest and voting power in Mincor to about 90.87%. (SMH)

  • Macquarie is looking to partner with another contender in the race for Alinta Energy’s WA assets. (The Australian)

  • Investment bankers have been weighing options for Chrysos as it has been loss-making. (The Australian)

  • Coronado Global Resources could be having second thoughts about BHP acquisition. (The Australian)

  • Crescent Capital lines up for Cura Group. (The Australian)

Capital Markets:

  • Johns Lyng Group has priced its $65m placement at $5.15 a share or towards the top end of the bookbuild range. (AFR)

  • Alceon is seeking $77m from investors (AFR)

VC:

  • EVOS, a Brisbane-based startup, has secured $5m from existing investors. (BNA | StartupDaily)

  • Inspace, a proptech startup has raised $6m in a Series A co-led by B Capital. (StartupDaily | SmartCompany)

  • Aussie startups raise $810m in Q2 as investor sentiment picks up. (BNA)

Others:

  • AustralianSuper is banking on a recession as inflation softens real returns. (SMH)

THE WATERCOOLER