Today’s News

The Big Picture

• Oil passes $115 for first time in four years. Fears of a protracted conflict grew after Mojtaba Khamenei, the conflict hardliner son of deceased leader Ali Khamenei, was named Supreme Leader. Arab states have stopped producing oil as they are unable to export oil via the Strait of Hormuz, sending oil prices over $115, their highest since the start of the Russia-Ukraine conflict. (FT)
  
  

• ASX collapses on fears of extended oil crunch. The ASX 200 fell 4%, erasing nearly $120 billion as oil soars to a four-year high. Westpac estimates a three-month Hormuz disruption could lift already-high Australian inflation by 1.5 percentage points and cut GDP growth by 0.5 percentage points. (AFR | Capital Brief)
  
  

• Australian petrol retailers accused of opportunistic price gouging. Australia’s competition watchdog has accused petrol retailers of spiking gas prices on the news of the Iran conflict, despite actual cost impacts not having hit yet. Sydney gas prices spiked 25 cents in the five-day period starting 27 February. (Guardian)
  
  

• Fortuitous timing for Aussie oil refineries. Australia’s last two oil refineries are negotiating an increase in taxpayer subsidies in order for them to remain operational, which is increasingly vital given the present supply crunch. Roughly 80% of liquid fuels in Australia are imported, with Ampol’s Brisbane refinery and Viva Energy’s Geelong refinery accounting for the remaining 20%. (SMH)
  
  

• Seventh narco sub highlights massive surge in drug smuggling. A seventh drug smuggling vessel has been discovered near Australia. French Polynesian authorities seized $3.4 billion of cocaine in the past month, but Pacific authorities are inundated and overrun with the increased volume of drug smuggling. (ABC)
  
  

• Government warns AI titans to stick to Australian values. Assistant Technology and Digital Economy Minister Andrew Charlton has warned AI firms to comply with Australian values and interests or face harsh regulations, mirroring the government’s recent stance on social media companies. He stated “we cannot allow global algorithms to determine our values.” (AFR)

Companies in the news

• Qantas, Virgin fall on oil price spike. The two airlines fell 10% and 7%, respectively, on market open yesterday as investors feared high oil prices would hit their operating costs. The conflict itself has also impacted the airlines, interrupting air travel across the Middle East. (AFR)
  
  

• EOS rebounds from activist short sellers. The Canberra anti-drone firm, whose stock has risen 700% in the past year, was the target of a negative research report by a US short seller. EOS rebutted the report in a 15-page reply, reaffirming its financial situation. Investors sided with EOS as the stock’s price recovered quickly. (Capital Brief)
  
  

• Koala locks in IPO. The online furniture retailer will be the first Aussie IPO of 2026, seeking to raise $68 million at a $300 million valuation. SkinKandy, I-MED, Greencross, Amart Furniture, and Estia Health are some of the other name of the potential IPO list for 2026. (AFR)
  
  

• CommBank refers brokers and accountants to police over loan fraud. The bank is working to unravel up to $1 billion of fraudulent loans. The accountants and mortgage brokers appear to have been taking advantage of CommBank’s referrer program, which pays commissions for sending clients to the bank. (AFR)
  
  

• Kalshi and Polymarket seek $20 billion valuations. The two dominant prediction market firms are seeking to raise money at the same valuation, which is double what they were valued in late 2025. Kalshi is believed to be generating $1.5 billion of annual revenue at present. (WSJ)
  
  

• Senior leader leaves OpenAI over Pentagon safety concerns. The head of OpenAI’s robotics team cited the firm’s unpopular Pentagon deal as the cause for her departure, stating “surveillance of Americans without judicial oversight and lethal autonomy without human authorization are lines that deserved more deliberation than they got.” (Bloomberg)

What the…?

The pursuit of artificial general intelligence has centered around creating an artificial mind, but Eon Systems seem to have circumvented that step. They copied the brain of a fruit fly, neuron by neuron, and plugged it into a virtual fruit fly, which then acted like a normal fruit fly in a video from a simulated environment.

With no prior training, the virtual fly sought out food and moved around the environment autonomously. Eon’s next goal is to recreate a mouse’s brain, which has 560 times more neurons than the fruit fly. In the words of one of Eon’s team, “The ghost is no longer in the machine. The machine is becoming the ghost”. (X)

A message from Schroders

Expanding globally is not just about hiring fast. It is about choosing the right structure. Get the latest global equity insights from Schroder’s worldwide team of portfolio managers and analysts at www.schroders.com.au/insights. You can also find information on investing in the Schroder Global Equity Alpha Fund (ASX:ALPH) on the site, and revisit out interview with Portfolio Manager Frank Thormann from 21st November 2025.

Today’s Insight

Emerging markets, demystified

On yesterday’s episode, we went into depth on emerging markets. So what are they? Different indexes qualify different countries as “emerging”, but some typical characteristics are an expanding middle class, rapid industrialisation, and increasing integration in to global trade.

Believe it or not, emerging markets include Asian powerhouses China, Taiwan, India, and sometimes Korea (depending on the index issuer). It also includes Middle Eastern powers like Qatar and the United Arab Emirates, as well as enduring European countries like Poland and Greece.

The investment thesis is comparable to venture capital: Investors are getting in early on countries and companies with massive but unproven growth potential. The International Monetary Fund projects that emerging markets will provide double the returns of developed economies over the next five years.

But like any investment, emerging markets carry risks. Illiquid equity markets, volatile currencies, and weak corporate governance are the typical risks in emerging markets. Check out the full episode to catch the rest of our breakdown on emerging markets.

Today in Equity Mates