13 Apr 2026
| Click here for a PDF of this newsletter The escalation of the US-Iran conflict, which sent crude oil prices skyrocketing (up 43% to over US$110 per barrel) was the primary catalyst for March’s nasty stock market returns. Whilst the S&P 500 and Nasdaq endured falls of around 5%, the local market was harder hit with the ASX S&P/ASX All Ords Accumulation Index posting a 7.3% loss, its worst month in almost 4 years.
Smaller companies fared even worse with the S&P/ASX Small Industrials Index losing 8.4% and the S&P/ASX Emerging Companies Index down 11.1%. The Cyan C3G Fund was not spared the carnage, suffering a fall of 12.8%. Whilst this monthly result was very disappointing, it was on par with many of our peers, and the Fund does remain up 6% over one year, against a 0.8% fall in the S&P/ASX Small Industrials Index. The dispersion of individual stock returns in the All Ords was highly skewed with just 1:10 stocks rising, the median stock return being -12%. The All Ords index was bookended by fuel refiner and distributor, Viva Energy (VEA +45%) which is likely to benefit, at least in the short-term, from surging petrol prices, and Immutep (IMM -88%) which fell massively after they discontinued their Phase 3 cancer drug trial.
Gold certainly did not live up to its reputation as a defensive asset in this crisis, falling -11% in March, which saw amplified declines in ASX gold plays like Pantoro Gold (PNR), Kingsgate (KCN) and Lotus Resources (LOT) which all slumped ~40%. Indeed we would view the recent price momentum and investor behaviour over the past few months in the commodity as more of a speculative play than long-term investment thesis.
Adding to the local bearishness was the RBA’s decision to lift the official cash rate by 25 basis points to 4.10% on 17 March citing inflationary pressures and warning that further rate rises might be on the agenda. Internally, we are not convinced that this is the right move given the input prices driving inflation and the consequential slump in consumer confidence.
Despite the significantly bearish backdrop, the market remained reasonably active with the successful IPO of furniture manufacturer and retailer Koala (KOA +12%) and a host of other meaningful share placements including Weebit Nano Ltd Nano (WBT), 4DMedical (4DX) and Lumos Diagnostics (LDX). Click here for a PDF of this newsletter Month in Review Whilst the Cyan C3G Fund was impacted by various material share price falls including: Acusensus (ACE -16%), Locate Technologies (LOC -27%), Raiz (-15%), Readcloud (RCL -20%), and Verbrec (VBC -27%), these falls were all sustained due to the bearish market sentiment, and not from any specific negative company news. Indeed the majority of these companies reported strong 1H26 results in late February, as detailed in our 28 February 2026 report. The Fund did experience some good news with consumer health products manufacturing company, Bioxyne (BXN +5%) gaining ground after a strong 1H26 earnings result and positive investor response to its presentation to the NWR Healthcare Conference.
Advanced 3D metal printing manufacturer AML3D (AL3 +33%) bounced strongly off recent lows after reporting two material contracts in the defence space: a $9.9m order for four ARCEMY X machines to a US military shipbuilder; and a $2.6m order for US navy submarine parts. These should help attract further investor interest in this growing international Australian materials defence technology company. With a market cap of ~$120m, this valuation looks incredibly favourable when compared to other ASX defence plays like Droneshield (DRO $3.2bn), Elsight (ELS $1.5bn) and Electro Optic Systems (EOS $1.8bn).
The Fund took a placement, which settled early in April, in bacterial/viral point-of-care test company Lumos Diagnostics (LDX). The company has recently received regulatory clearance to roll out their FebriDX test with distributor Phase Scientific and it has already received an initial order, and the company’s largest, for US$1.3m. Media There were a number of media pieces done during the month as listed on our website and Linkedin. Outlook April has already seen significant volatility, mostly to the upside thus far, as hopes rise that the conflict in the Middle East is easing. There is still a tilt in the market favouring the large caps over the smalls which has seen the valuation gap widen over the past three years to a record level making the end of the market in which Cyan operates increasingly favourable.
The bond market continues to factor in 2 or 3 more rates rises – with 3yr bonds now yielding over 4.5% – but this may prove to be overly pessimistic if commodity prices ease further.
As we saw at the end of February, many of the Fund’s small-cap holdings delivered superior earnings growth and robust cash flows during the 1H26 reporting season. With many exposed to sectors including healthcare and government spending, they are likely to be less affected by economic uncertainly and consumer weakness. Whilst navigating a skittish stock market through global turmoil is both challenging and unpleasant, we are optimistic that the valuations that have materialised from the current market are likely to result in some serious upside in the coming months as investor panic subsides and the underlying fundamentals continue to prove themselves. 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 AFSL No. 453209 An investment in the Cyan C3G Fund can be made by clicking here |
