$603m HMC / KKR Deal Wins Regulatory Approval. Downgrades to JDO Target Prices
Paper Mandate Market & Portfolio Commentary | 26 June 2026
Fund Status:
Bal Start: $1,176,668
Bought ZIP, HMC, GDG
Sold: None
Bal End: $1,155,783
Cash: $129,286
Overnight Markets
Wall Street ended the day down after a mixed session. Micron (+15.7%) led and Semis subsector (+2.31%), however Software (-2.66%) remains under pressure along with Hardware (-2.32%). Oil prices were in flux after an oil tanker was hit by a lone projectile in the Strait. The identity of the attackers are still unknown. SpaceX credit derivatives have begun trading, with CDS prices indicating there is a heavy default premium tied to SpaceX’s debt.
On the subject of higher prices, both Apple and Microsoft have increased prices, citing memory and storage as the culprit. Such a cheek considering the mass layoffs enacted by the latter in recent months. In other news, US Core PCE (one of the Fed’s key measures) of 3.4% annualised was slightly higher than expectations, suggesting Warsh may be under pressure to raise rates. However, John Williams (Fed NY President) stated rates are well positioned to handle inflation. ASX futures were up premarket.
Australian Market
Prior to market open, UBS downgraded their target price of Judo from $2.25 to $1.05. An aggressive cut. Some updates on the three clients: they are a mix of financial planning, a window manufacturer and a property-backed loan, all with director’s guarantees.
The ASX ended the day slightly up, +0.18%, driven by Materials (+0.81%). Utilities performance was higher, +1.01%, but constitutes a much lower weight in the index. Interestingly, one of our bench stocks (Lycopodium Ltd, LYL) had a good day (+5.28%). It was an idea from a while ago but we didn’t do any work on them. Besides we invested in SYL, SRG, SHA, and MND. Our construction exposure is well sorted. Out of curiosity we checked the price chart…up +39% in one month. Well, we can’t get them all.
Portfolio Commentary
The portfolio fell -0.35% while the benchmark (ASX300) slightly outperformed +0.16%. Materials were the best performing (PC2 +3.5%) while select names in Financials and Tech weighed us down. GDG was down (-3.7%) and added 1% to our position. We also increased our weights in HMC and ZIP. This brings our Financials exposure to 22%, still 11% underweight to the index.
HMC received ACCC and FIRB approval to partner with KKR for HMC’s Energy Platform. KKR will invest up to $603m into the Platform, $248m of which to fund the first Battery Energy Storage System (BESS) development.
JDO continues to fall (-3.8%), and a couple sell side firms downgraded their target prices; JPM remains overweight but dropped from $2.25 to $1.45. UBS downgraded to $1.05, while Jarden (despite downgrading) was the most bullish, dropping their target price to $2.00.
Investment Activity
Disclaimer: This is a paper portfolio. Content is for educational purposes only and does not constitute financial advice. Always do your own research.