Investors dump small caps; cash usage rises; Adidas the winner in marathon record
News in brief
IFM Investors has made a $6.9 billion bid for Atlas Arteria, but the toll road group’s board appears unenthused about the offer. (For more on this story, see the Fear-o-meter below).
After years of decline, the use of cash in the economy has reversed, with around 15 per cent of payments now made using notes and coins, and 50 per cent of Australians using cash in a typical week. Older Australians and lower income households tend to use cash more, but representatives of all age groups pay with it.
When it comes to investing, space is back. VanEck’s space innovators exchange-traded fund has risen more than 220 per cent in the last year. Betashares plans to launch a space ETF next month, the first of its kind for the ASX. Space is no longer the domain of governments, but also open to commercial companies launching rockets, building satellite networks and mapping the Earth from orbit.
Iran has sent a new proposal to the US to reopen the Strait of Hormuz and end the war that includes putting off nuclear negotiations. The plan, conveyed through mediators in Pakistan, calls for extending the ceasefire so the parties can work toward a permanent end to the fighting, according to the Axios news outlet.
Two runners have broken the magical two-hour mark for the 42-kilometre marathon for the first time and the winner is Adidas. Both runners, and the winner of the women’s event, wore Adidas’ new and ultra-light $US500 racing shoe.
Fear-o-meter
IFM Investors' $6.9 billion bid for Atlas Arteria is not going to be friendly. That was made clear by the Atlas board when in a statement after the bid said the $4.75 a share offer represents a premium of just ten per cent on the last closing price.
The word “just” tells the story.
IFM isn’t happy either saying it was concerned about the long-term sustained share price underperformance at Atlas, and a recent change in strategic direction to potentially pursue M&A.
Atlas Arteria said it would establish an independent board committee to consider the bid. It must, because after taking 20 per cent of the toll road group in 2022, IFM has been creeping up the registry and now owns around one-third of it.
Atlas’ share price has tumbled since the outbreak of the conflict in the Middle East. Fears that drivers won’t use roads as much, thanks to higher fuel costs, has hit the company. IFM and the other 80,000 shareholders have lost out.
Atlas makes the bulk of its money from concessions in France, and it also owns roads in Germany and the US. Its share price has underperformed its peer on the ASX, Transurban, and its largest shareholder is getting frustrated.
IFM thinks it can do better. If successful, it will take yet another infrastructure asset off the ASX.
Whichever way it goes, it is likely to be a feisty battle.
Fear & Greed Q+A today
Telstra CEO Vicki Brady joins Fear & Greed at the Microsoft AI Tour to talk about how Australia's biggest telco rolled out AI across its operations - one of the first major companies in Australia to fully embrace the technology:
"One of the biggest learnings we had early on was when we looked at our customer-facing teams — about 8,000 people — and we said, let’s build a generative AI assistant that helps them navigate over 2,000 knowledge articles and manuals more easily.
We piloted it with about 60 people, and they came back and said, ‘it’s giving us the wrong answers’. So you immediately assume the AI is the issue.
But when we actually dug into it, the problem wasn’t the AI — it was the underlying data. Some of the manuals and knowledge articles weren’t up to date.
So we had to stop, go back and fix that foundational data, and that took about nine months longer than we originally planned. But once we did that and rolled it out properly, people said, ‘wow, this is amazing’. So it was a really important lesson — you’ve got to get the foundations right."
Fear & Greed is a media partner of the Microsoft AI Tour
Australian small caps – companies ranked 101 to 300 on the ASX in terms of valuation – have been among the poorest performers on the bourse this year, with only the technology index doing worse. So far this year, the ASX small ordinaries index is down 7 per cent, while the index of top 20 companies is up six per cent.
The buffeting of global markets from the war in the Middle East and spike in energy costs has hit smaller stocks hardest, and investors have looked for perceived safer assets. It comes on the back of a strong 2025 for the small caps sector.
Materials, financials and industrials make up about half the index. Some of the higher profile stocks to tumble this year include construction company Lendlease, tracking group Life360, ship builder Austal and carrier Virgin Australia. Flight Centre, buy-now-pay-later group Zip Co and one-time blue-chip AMP are also down 20 per cent or more.
Greed-o-meter
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