Australia, UK and Canada officially recognise Palestinian state

Good morning. Here's what happened overnight and what you need to know today.

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1.

Palestine recognised: Australia, Britain and Canada officially recognised Palestinian statehood on Sunday, marking a coordinated foreign policy change by three key US allies amid mounting global outrage over Israel’s offensive in Gaza. A joint statement released by Prime Minister Anthony Albanese and Minister for Foreign Affairs, Penny Wong, said Australia “formally recognises the independent and sovereign State of Palestine. In doing so, Australia recognises the legitimate and long-held aspirations of the people of Palestine to a state of their own.” The statement called for new momentum for a two-state solution, starting with a ceasefire in Gaza and release of Israeli hostages. The countries made the announcement ahead of the UN General Assembly in New York this week, with France, Belgium and other nations also expected to declare Palestinian statehood. Israel and the US have fiercely opposed the moves to recognise Palestine, which offer a sharp rebuke of Israeli leader Benjamin Netanyahu and his far-right government. (Capital Brief)(WSJ)(FT)(Bloomberg)(The Australian)

2.

Optus outage: Optus CEO Stephen Rue said the company will implement any recommendations from an independent review, after an emergency call outage resulted in three deaths on Thursday last week. The telecoms company revealed on Sunday that the impact was broader than initially thought, affecting emergency calls in SA, WA, NT and NSW. South Australian Police said on Sunday that preliminary investigations indicate the previously reported death of an eight-week-old boy, whose family was impacted by the outage, is unlikely to have been caused by the failure. In a statement published on Sunday, Rue said “early investigations show that it appears that established processes were not followed.” The CEO also told reporters that the Optus board is preparing to appoint an outside expert to lead the review, which will come alongside a government investigation. Optus was fined $12 million by the Australian Communications and Media Authority for a similar outage in 2023. (AFR)(The Australian)(ABC)(Bloomberg)

3.

Delaware calling: Australian design giant Canva paid $22.5 million to acquire Sydney-based advertising analytics startup MagicBrief, according to fresh corporate filings that detail a period of intense corporate activity at Australia's most valuable private tech company. The figure, disclosed in a footnote to Canva's financial statements for the 2021 and 2022 financial years lodged with ASIC, provides the first official confirmation of the acquisition price for the deal announced in June this year. The ASIC filings reveal a flurry of activity at Canva as it prepares for a potential IPO next year, including a consolidation into one global entity and the company organising a secondary share sale this year to allow employees to sell equity to new investors. Canva has ruled out an IPO until 2026, but the filings also show Canva restructured its corporate ownership in February, establishing a new Delaware-registered parent company while converting its previous Australian parent into Canva Australia Holdings. (Capital Brief)

4.

Due diligence: CEO of StrongRoom AI, Max Mito, denied he purposefully defrauded investor EVP and alleges the losses suffered by the VC after investing in his company are due to its own due diligence failures. In defence documents filed with the Federal Court, Mito argues details given to EVP before its $10.4 million investment were intended only as a starting point for the firm to "undertake its own investigations." Mito's defence argues that any losses that resulted after (the startup was valued at nearly $70 million in March but sold for just $3 million in June) are due to a failure to carry out those investigations. Mito denies the charge that he made representations to EVP that he knew to be false, but did admit to financial "discrepancies" in its accounts. The saga started in March when just weeks after investing in StrongRoom AI, EVP called police on its founders and alleged fraud. (Capital Brief)

5.

TikTok buyers: Donald Trump said Rupert and Lachlan Murdoch are likely to be part of a group of potential buyers to keep TikTok running in the United States. In an interview taped Friday and aired on Fox News’ The Sunday Briefing, Trump also named Oracle’s Larry Ellison and Dell Technologies CEO Michael Dell. He called the group “very prominent people” and “American patriots.” White House press secretary Karoline Leavitt on Saturday said the deal, which still needs to be signed, would make TikTok “majority-owned by Americans,” with six Americans on its seven-seat board. Data and privacy would be managed by Oracle, and the algorithm would be “controlled by America.” Trump and Chinese President Xi Jinping spoke by phone on Friday, with Trump saying the deal “is well on its way,” while China said only that both sides support efforts to reach a “proper deal.” The deal comes a 2024 law requiring ByteDance to divest or face a US ban. (Capital Brief)(Bloomberg)(The Hill)(BBC)

6.

Systemic risk: The concentration of higher-risk real estate construction and development investments in private credit is ripe for improvement for investors and market integrity, according to ASIC’s interim report into private credit set for release today. ASIC, which interviewed 30 parties involved in, or with knowledge of, private credit, estimates the sector to be at $200 billion, of which half is estimated to be in real estate. ASIC said when private credit was “done well” it was good for investors and borrowers and complemented the banking system, however, the concentration in real estate could present as a systemic risk for small and self-managed superannuation funds and sophisticated investors in a downturn. ASIC noted that, given the “relatively small size” of the sector, systemic risk was unlikely to be a major concern today. The watchdog flagged opaque remuneration and fee structures, inconsistent valuation practices and unclear definitions of key terms as key concerns. (Capital Brief)(Bloomberg)

7.

Visa panic: The White House clarified that Donald Trump’s new USD 100,000 ($151,650) fee for H-1B visas will apply only to new applicants and not to existing holders or renewals, easing some of the panic that spread after Trump signed the proclamation on Friday. Commerce Secretary Howard Lutnick had earlier said the fee would be annual, before the White House clarified it is a one-time charge. Trump also announced a “Trump Gold Card” visa offering residency for USD1 million, and a future USD5 million platinum version. In the hours after the order, companies including Microsoft, Amazon, Alphabet, JPMorgan and Goldman Sachs reportedly sent urgent messages warning employees on H-1B visas not to travel or to return to the US before the rules took effect at 12:01am Sunday local time. India (71% of H-1B approvals last year) faces particular disruption. Its USD283 billion IT industry, which earns 57% of revenue from the US, is expected to pause staff rotations, accelerate offshore delivery and increase local hiring. Separately on Friday, hackers targeted Collins Aerospace’s MUSE check-in system, disrupting London Heathrow, Berlin Brandenburg and Brussels airports. By Sunday, operations had largely recovered in Berlin and London, but Brussels cancelled 50 of 257 departures and asked airlines to cancel half of Monday’s flights. Regulators are investigating.(Bloomberg)(Reuters)(FT)(NYT)

8.

Prosecutor purge: Donald Trump demanded on Saturday that US Attorney General Pam Bondi move quickly to prosecute figures he considers his enemies, a day after he ousted the federal prosecutor who failed to charge two of his most-reviled adversaries, NY AG Letitia James and former FBI Director James Comey. In a Truth Social post addressed to “Pam,” Trump wrote, “We can’t delay any longer, it’s killing our reputation and credibility. They impeached me twice, and indicted me (5 times!), OVER NOTHING. JUSTICE MUST BE SERVED, NOW!!!” He named Comey, Senator Adam Schiff of California and James, saying he was reading about how they were “all guilty as hell, but nothing is going to be done.” Speaking later to reporters, Trump said, “They have to act. They have to act fast.” Trump said Erik S Siebert, the US attorney for the Eastern District of Virginia who was abruptly forced out from his post Friday, had claimed “that we had no case” against James. On Saturday, Trump announced he would nominate Lindsey Halligan, a former attorney on his personal legal team who now serves as a White House aide, to replace him. Halligan has never been a prosecutor. (Bloomberg)(WSJ)(NYT)(Donald Trump)