Today’s News

The Big Picture

• Iran conflict enters its third week. Over the weekend, Trump called on countries to support his efforts to open the Strait of Hormuz and announced plans to move another 2,500 Marines to the Middle East. The oil price is back above $100 a barrel, with the global benchmark Brent Crude at $104. (9 News)
  
  

• Australia releases 20% of national fuel reserve. The Australian government is releasing this fuel into the market - the equivalent of 6 days worth of petrol and 5 days worth of diesel - to mitigate the impact of the Iran conflict. Demand for fuel has doubled as Australians stock up ahead of any more price rises or supply shortages. (ABC)
  
  

• Get ready for another rate rise. With the Reserve Bank set to meet on Tuesday, all 4 of Australia’s Big Banks are now forecasting a 25 basis points increase to 4.1%. (Capital Brief)
  
  

• Cuba negotiates with the US. Cuba has not received a fuel shipment in more than 3 months because of an US blockade and Trump’s threat of a “friendly takeover” of the island. After weeks of denying it, Cuban President Miguel Díaz-Canel confirmed that his government is now negotiating with the Trump Administration. (WSJ)

Companies in the news

• Online furniture seller, Koala, locks in IPO. The Australian company will list on the ASX under the ticker KOA on 31 March. It forecasts sales of $330 million in this financial year and is planning to raise $68 million as part of the listing. (Capital Brief)
  
  

• Kyle and Jackie O fight escalates for ARN. The ASX-listed radio station is now facing the threat of a wrongful termination lawsuit from Jackie O. Meanwhile, tomorrow (Tuesday) is the deadline ARN has given Kyle to remedy his breach of contract. (AFR)
  
  

• xAI had 11 co-founders. Just 2 remain. Elon Musk’s AI startup forced out two more cofounders last week as its Grok chatbot lags competitors from OpenAI, Google and Anthropic. Since being founded in March 2023, Musk has forced out 9 of the co-founders that started the business with him. (FT)
  
  

• BYD’s 5-minute charge. The Chinese electric car maker is launching a new model that can charge to 70% in 5 minutes and be fully charged in 12 minutes. The technology is intended to get an EV charged almost as quickly as filing a car with petrol. (FT)
  
  

• Macquarie walks back fund manager cull. In October, Macquarie announced it would remove 243 funds from its wealth platform in the wake of the collapse of the Shield Master Trust. After outcry from financial advisers and fund managers, that list is now just 80 funds. (Capital Brief)

What the…?

“Worth It”: Prime Minister risks $5,500 fine. Thousands of fans flooded onto the field on during the NRL game on Friday night as South Sydney player Alex Johnson became the all-time leading try scorer.

There was one surprising fan amongst them: Prime Minister Anthony Albanese. Before the games, fans were warned they faced 2-year bans and $5,500 fines if they stormed the field. Asked afterwards about the fine, the Prime Minister said it would have been “worth it to be part of history.” (Fox Sports)

A message from Centuria

Don't chase property trends, Pursue value

At Centuria, we stay ahead of the curve by proactively scanning the market to spot opportunities others may miss. With a disciplined investment process, deep market knowledge and a clear focus on starting with the end in mind, Centuria offers investors a distinct edge: one built on expertise, insight and agility.

Centuria’s property expertise spans a broad range of traditional and alternative property sectors including office, industrial, retail, healthcare, agriculture, data centres and real estate debt.

Today’s Insight

The Three D’s of Investment Risk

In a recent episode, we chatted with Ben Arnold from Schroders, and he had a great framework for identifying risks that centered around three D’s:

Deployment of Capital

AI companies are investing hundreds of billions of dollars into infrastructure — but will it be worth it? This is the first area to assess for risks: Do the returns of a company’s investments justify the costs? If an investment doesn’t seem like something that will at least cover its own costs, this may be a cause for concern.

Debt

This one is a little more obvious: Can a company handle the weight of its own debt? If it’s taking out new debt, will the return on the use of the debt outweigh the cost of the debt? Alphabet (aka Google) just issued a 100-year bond. While it lets Google not think about that debt for 100 years, that’s 100 years of interest to be paid. Google obviously thinks the investment funded by the bond will pay off in the long-run — do you?

Demand

Finally, is there demand for what a company is selling? Nvidia can’t build chips fast enough. Apple can charge whatever they want for an iPhone. Utilities providing water, gas and electricity have fairly bulletproof demand. If you can’t wrap your head around why a company’s goods or services are in-demand, there may be a risk there.

Today in Equity Mates