14 Jan 2026
Click here for a PDF of this newsletter
The domestic stock market posted a fragmented but muted “Santa Rally” in December 2025, with the S&P/ASX All Ords Accumulation Index rising 1.3%. Much of this was driven by a sharp rally in commodities, with gold rising more than 3%, silver nearly 28%, and copper 6%. This resulted in significant divergence at the smaller end of the market, with the S&P/ASX Small Industrials Accumulation Index falling 2.0%, while the resources‑laden S&P/ASX Emerging Companies Index surged 10.2%.
Further, the overall gain in the All Ords was narrow, with just three of the eleven industry sectors rising. Materials led the way, gaining almost 7%, followed by Financials, which rose 3%. Information technology and Healthcare underperformed sharply, each sliding more than 7%.
The Cyan C3G Fund posted a respectable return of 0.6%, given the Fund’s purely Industrials investment focus. This took the Fund’s return for 2025 to 20.5%, well ahead of the S&P/ASX All Ords Accumulation Index’s 10.6% gain.
Click here for a PDF of this newsletter
Month in Review
December was another period of intra‑month volatility driven by sporadic trading volumes. That said, the majority of positions finished the month within 10% of the previous month’s closing price, though a few key contributors stood out:
Verbrec (VBC +33%) is an engineering services firm that made several strong strategic moves in recent months, which materialised in December’s stock rise. Firstly, it sold a non‑core training business for $11.2m in cash and subsequently acquired another engineering business, Alliance Automation, for $5.5m. This represents a positive step‑change for the company, which is now forecast to generate annualised revenue of approximately $150m and EBITDA of around $9m. This is expected to accelerate above $12m as synergies are realised and the combined offering gains traction. The company is still trading on an enterprise value of just ~$47m, even after December’s price run. We remain invested and see potential for material further upside.
ReadCloud (RCL +15%) services the education sector through digital learning content (eBooks), vocational education and training (VET) content through its ReadCloudVET division and vocational training to industry, particularly in early childhood education and healthcare (Southern Solutions). It released a solid result in late November and, although no further news emerged in December, the share price strengthened, albeit on low trading volumes. The VET‑in‑Schools division, one of RCL’s three business units, is performing strongly and appears well placed for a robust 2026, which should drive further earnings growth. We see the business as undervalued (and underappreciated) given its exposure to strong strategic assets in a growing segment of the education sector.
Locate Technologies (LOC.NZ +25%) has experienced an eventful few months. This long‑held Fund position has a multi‑pronged growth strategy: ongoing expansion of its core delivery and route‑optimisation software, Locate2U, and the more recently announced Bitcoin Treasury Strategy. To execute this strategy more effectively, the company decided to delist from the ASX and list on the NZSX. This transition occurred in December and, on a currency‑adjusted basis, the share price rose 25%. Management now intends to accelerate its Bitcoin Treasury Strategy, which it has far greater freedom to pursue as an NZSX‑listed entity.
BeforePay (B4P –12%) is an Australian‑based and proven fintech that continues to grow domestically while building a presence in the US, using its IP to deliver credit‑decisioning tools for US‑based banks and fintechs. The company performed very well throughout 2025, with the share price rising 54% for the year. Although no negative news emerged in December, the price retraced 10% during the month. We continue to have strong conviction in this well‑managed fintech and, although we took some profit at higher prices, we remain invested.
Raiz Invest (RZI –10%) is another fintech that delivered strong returns in 2025 (+40%) but declined in December despite no news. We have held RZI for several years and are encouraged to see it beginning to drive revenue growth and accelerate operating profitability. We also believe M&A activity – either as acquirer or target – remains a strong possibility.
Media
There were a number of media pieces done during the month as listed on our website and Linkedin.
Outlook
The Reserve Bank of Australia (RBA) left the cash rate unchanged at 3.60%, but softer‑than‑expected inflation data in early January 2026 has eased expectations of further rate hikes. We expect this will provide some stability through January, allowing the market to focus on fundamentals as it looks ahead to the February interim reporting season.
A number of our key portfolio positions are well placed, and we look forward to upcoming news in the months ahead. Two specific examples are Acusensus (ACE) and Alcidion (ALC). In December, Acusensus raised $30m in new equity capital to fund contract mobilisation, litigation costs, and growth initiatives, including a pipeline of opportunities in the US. We believe this is a likely leading indicator of further contract success in the coming periods.
Similarly, Alcidion has a strong domestic business and is achieving impressive results offshore. The company is looking to build on a strong FY25 and has started the year positively, announcing a new $35m contract in early January with University Hospitals Sussex NHS Foundation Trust in the UK.
These two investments sit within what we believe is a well‑diversified portfolio of growth‑focused businesses positioned to deliver strong Fund outcomes across 2026.
Please stay in touch with our intra-month commentary via Linkedin or feel free to contact us at any time.
Dean Fergie and Graeme Carson
Cyan Investment Management