14 Oct 2025
September proved to be a modestly challenging month for the Australian stock market, with the S&P/ASX All Ords Accumulation and S&P/ASX Small Industrials Indices posting declines of 0.5% and 0.7% respectively. However there was some extreme bullishness at the micro end of the market with the S&P/ASX Emerging Companies Index galloping 13.4% higher, driven much by strength in resources stocks.
The Cyan C3G Fund had a solid month with a return of 6.5% taking its 12 month return to 20.9%, well ahead of the S&P/ASX All Ords Accumulation’s 10.5% gain.
One of the more notable developments over September was the RBA’s decision to hold the cash rate steady at 3.60%, despite earlier expectations of further cuts. This came in response to higher-than-anticipated inflation data and a rebound in consumer spending.
Bond markets now reflect this uncertainty, pricing in only a 33% chance of a rate cut at the RBA’s November meeting. The Australian dollar reacted to the slightly higher than expected interest rates and renewed confidence in the local economy by appreciating 1.1% to USD 0.66, its highest level in almost a year.
Housing continued to show signs of recovery which, while challenging for affordability, contributes
The Federal Government’s expansion of the 5% deposit home loan scheme can be expected to boost demand among first-home buyers. This uptick in housing activity is likely to support to sectors like construction and retail in the coming months.
The market was incredibly active with numerous placements being offered to sophisticated investors, particularly in hot spaces like defence, critical minerals and technology. Whilst the IPO space is yet to really fire up, there is a growing line-up of names sounding out the market and looking to list before the end of CY2025.
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Month in Review
The Fund enjoyed a number of strong performances in the month as the stock market continues to reward underlying corporate progress and attribute increasing value to many previously unloved small cap stocks.
One of the best performers, albeit off a depressed base, was Swift Networks (SW1 +75%). SW1 provides tailored TV-based entertainment systems to the mining and aged care sectors – similar to the systems you find on airlines. Swift provides their proprietary systems to clients such as Chevron, Roy Hill, Pilbara Minerals and Anglo Gold totalling more than 13,000 rooms and generated subscription revenues of more than $14m in FY25. The company has been moving into the aged-care sector and the uplift in share price came when they announced the signing of a master services agreement with Opal HealthCare. The agreement is initially for just four of Opal’s aged-care sites but can be expected to roll out to many more of Opal’s 142 locations over time. SW1 raised $1.5m (to which Cyan subscribed) to fund this expansion and we see this deal as a true inflection point for the company.
We’re seeing brilliant early returns on our investment in AI-Media (AIM+56%) following their FY25 report detailing strong upticks in tech revenues, hardware sales, and deployed encoders. Crucially, AI-Media is at a major inflexion point with its artificial intelligence technology now more accurate and efficient than its prior human-involved processes. This transition from a human workforce to AI is delivering significantly improved margins for AIM.
The Fund also saw some solid returns from our longer-term investments:
- Consumer investment platform Raiz (RZI +14%) which has seen strong growth in FUM due to buoyant global markets and, subject to customer churn, should enjoy further growth in revenues after a product price rise in August.
- Smart traffic camera manufacturer Acusensus (ACE +13%) continued its recent run after releasing impressive FY 25 results, and followed this up in September with new a $8.7m, five year fixed camera contract in WA.
This was little in the way of significant pullbacks with just a handful of stocks posting single digit declines.
Improving liquidity allowed the Fund to opportunistically reduce and rebalance some of our better performing holdings and deploy that capital into new opportunities through placements and on market purchases.
Media
There were a number of media pieces done during the month as listed on our website and Linkedin.
Outlook
There is tangible momentum at the smaller end of the market which appears to be accelerating through October and into the end of calendar 2025 as corporate departments rush to complete deals.
The Fund currently has a number of outstanding catalysts including discounted placements yet to settle and some upcoming IPOs both in Australia and NZ.
Despite recent strong performances, valuations of the Fund’s investments remain relatively undemanding (and in some cases downright attractive), especially in relation to the larger cap cap stocks and some of the hotter sectors of the small cap market. Factors we think make the near-mid term performance outlook incredibly attractive.
While the broader market remains influenced by global uncertainty and tighter financial conditions, as mentioned, many smaller companies are trading at attractive valuations, with strong balance sheets and clear pathways to growth. Domestic infrastructure spending, optimistic investors and demand for high-quality niche services and products are driving margins and earnings resilience across sectors.
By focusing on businesses with strong management teams, scalable models, structural tailwinds and near-term catalysts, we believe the Cyan C3G Fund is well placed to deliver solid returns over the medium term.
Please stay in touch with our intra-month commentary via Linkedin or feel free to contact us at any time.