☕️DNR’s contrarian DNA

Why DNR Capital thinks the markets have got Telstra all wrong.

Good morning.

DNR Capital’s Scott Kelly believes the markets “misunderstood” Telstra’s job cuts announcement and placed too much emphasis on the company's social licence as it looks to cut its cost base. Kelly tells Capital Brief that this misses Telstra’s pricing power, with the telco in position to capture greater margins moving ahead, and goes to explain why Telstra is the third largest position in his income fund.

While there is always a risk the theory could blow up (à la Kim Jong Un’s spy satellite dreams), DNR's contrarian streak has proved profitable in the cases of Woodside and Ampol, where the investor saw the upside and bet against overblown threats.

ASX as at market close. Commodities and crypto in USD.

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Market movers

Shares in Pro Medicus inched up over 2% during trading yesterday, to close at $114.31,after the healthcare informatics company announced that its US subsidiary Visage Imaging had secured five new contracts worth a combined $45 million. The contracts, which are expected to be completed within the next six months, include deals with paediatric hospitals Nationwide Children's Hospital, worth a $11.5 million over seven years, and Nicklaus Children's Hospital, totalling $6.5 million over five years. Pro Medicus has seen its $11.8 billion market cap grow almost 150-fold in the last 10 years.

The quick sync

  • Hess shareholders have approved the company’s US$53 billion ($80 billion) merger with US oil company, Chevron. (Capital Brief)

  • BHP and Anglo American remain split on deal details as BHP CEO Mike Henry lands in London for last ditch talks. (Bloomberg)

  • Aussie super funds are increasingly exerting direct influence on investee company strategy, particularly when it comes to ESG. (Capital Brief)

  • Ex-Pioneer CEO lashes out at the US Federal Trade Commission over accusations he colluded with OPEC. (Financial Times)

    Nine Network could be exposed to ‘positive duty’ obligations as harassment scandal deepens. (Capital Brief)


  • Qube Holdings will acquire the Melbourne International RoRo & Automotive Terminal from Wallenius Wilhelmsen. (Capital Brief)

  • Openmarkets is exploring a bid for Integrated Portfolio Solutions, which was put up for sale six months ago by Berkshire Global Advisors. (AFR)

  • Southern Cross Media is investigating a revised proposal with Australian Community Media. (Capital Brief)

  • BlueScope won't buy South32's Illawarra coal business, opening the door for Golden Energy and M Resources to acquire it at $2.54b. (Capital Brief)

  • Levitt-Safety is seeking a buyer for its mining-focused communications division, NLT Digital Solutions. (AFR)

  • AirTrunk's bankers have upgraded earnings forecasts, anticipating faster leasing of its data centres, for the company's $15b sale. (AFR)

  • Next Capital has acquired a majority stake in education business Scentia. (AFR)

  • Antony Catalano wants Southern Cross Austereo to buy his regional media business and has enlisted Barrenjoey and Arnold Bloch Leibler to facilitate the deal. (AFR)

  • T-Mobile is buying most of UScellular in a move to expand its network. (Capital Brief)

  • Fonterra set to sell billions in global assets - bankers will be approached soon. (The Australian)

Capital Markets

  • Australian Gold & Copper raised $11m by selling new shares, with main backer Delin Mining buying-in to retain its majority stake. (AFR)

  • Saudi Aramco plans to sell $10-20b of stock in a long-awaited share sale. (Capital Brief)

  • Macquarie analysts recommend buying HMC Capital after it acquired Payton Capital. (Capital Brief)


  • After setting up Tietto Minerals as a takeover target for Zhaojin Capital, gold operator Matt Wilcox has joined Toubani Resources. (SMH)

  • Bailador Technology Investments invested $20m in telehealth startup Updoc. (Startup Daily)

People moves

  • Thorney is pushing for a board revamp after failed private discussions to restructure the smash repairer's board. (AFR)

  • Bilyana Smith, a marketing veteran and angel investor, has become the new chair of the startup community Fishburners. (Startup Daily)

  • Iain Ross takes over as acting chair of the Net Zero Economy Agency. (Capital Brief)

☝️ Know about a deal or people move we don’t? Hit reply.

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