1 00:00:04,080 --> 00:00:06,389 Sean Aylmer: Welcome to the Fear and Greed daily interview. I'm Sean 2 00:00:06,390 --> 00:00:09,780 Sean Aylmer: Aylmer. It's half year profit season on the ASX and 3 00:00:09,780 --> 00:00:13,320 Sean Aylmer: this is the week that things really kick off. Over 4 00:00:13,320 --> 00:00:15,930 Sean Aylmer: the next weeks, all companies with the December 31 half 5 00:00:15,930 --> 00:00:18,660 Sean Aylmer: or full year balance date, will update investors on how 6 00:00:18,660 --> 00:00:20,790 Sean Aylmer: they're going. Always a good time to check in with 7 00:00:20,790 --> 00:00:24,840 Sean Aylmer: Matthew Kidman, principal at Centennial Asset Management to find out 8 00:00:25,079 --> 00:00:27,150 Sean Aylmer: what he's keeping an eye on. Remember, this is general 9 00:00:27,150 --> 00:00:30,510 Sean Aylmer: information only. You should get professional advice before making any 10 00:00:30,510 --> 00:00:33,660 Sean Aylmer: investment decisions. Matthew, welcome back to Fear and Greed. 11 00:00:33,870 --> 00:00:34,740 Matthew Kidman: Hi Sean, how are you? 12 00:00:35,159 --> 00:00:38,040 Sean Aylmer: Well. Have you come back into the new year, which 13 00:00:38,460 --> 00:00:40,830 Sean Aylmer: admittedly is about five weeks old now or six weeks old, 14 00:00:41,220 --> 00:00:43,380 Sean Aylmer: full of vim and vigour for this reporting season? 15 00:00:43,979 --> 00:00:46,140 Matthew Kidman: Well, if we're going to talk about reporting season, how 16 00:00:46,140 --> 00:00:49,199 Matthew Kidman: people feeling going into it, it's completely different to what 17 00:00:49,409 --> 00:00:51,810 Matthew Kidman: would've been five or six or seven weeks ago when 18 00:00:51,810 --> 00:00:54,990 Matthew Kidman: we were heading into Christmas break and the markets had 19 00:00:54,990 --> 00:00:56,550 Matthew Kidman: sold off a bit and then we had this incredible 20 00:00:56,550 --> 00:01:01,050 Matthew Kidman: rally over January. Expectations in general have changed a little 21 00:01:01,050 --> 00:01:04,530 Matthew Kidman: bit, which makes it harder for companies to impress because 22 00:01:04,530 --> 00:01:07,500 Matthew Kidman: prices are generally higher. We had that rally, it's pretty 23 00:01:07,500 --> 00:01:10,890 Matthew Kidman: broad based. It wasn't any area in particular. Most stocks 24 00:01:10,890 --> 00:01:15,209 Matthew Kidman: went up during January, so now the expectation is make 25 00:01:15,209 --> 00:01:18,180 Matthew Kidman: your numbers, give us a good outlook, otherwise we're going 26 00:01:18,180 --> 00:01:19,649 Matthew Kidman: to be a bit nervous on the downside. 27 00:01:20,310 --> 00:01:22,200 Sean Aylmer: Okay, so we've had a few companies come out in 28 00:01:22,200 --> 00:01:24,179 Sean Aylmer: the last week though things really kick off this week. 29 00:01:24,180 --> 00:01:27,120 Sean Aylmer: AGL was a big one from last week, Suncorp, et 30 00:01:27,120 --> 00:01:29,819 Sean Aylmer: cetera. What are some of the themes that, it's probably 31 00:01:29,819 --> 00:01:31,620 Sean Aylmer: too early to say have emerged, but that you are 32 00:01:31,620 --> 00:01:33,900 Sean Aylmer: looking for over the next three or four weeks? 33 00:01:34,200 --> 00:01:38,669 Matthew Kidman: Yeah, the last three years have been dominated by thematics 34 00:01:38,670 --> 00:01:41,670 Matthew Kidman: or as you economists like to say, macro, so it's 35 00:01:42,120 --> 00:01:44,970 Matthew Kidman: good every six months to do the micro, which is 36 00:01:44,970 --> 00:01:48,360 Matthew Kidman: the companies, and that macro does feed down into the 37 00:01:48,360 --> 00:01:51,900 Matthew Kidman: micro. We've had those handful of companies you've said. Two 38 00:01:51,900 --> 00:01:55,380 Matthew Kidman: things really stand out, the economy, the Aussie economy that 39 00:01:55,380 --> 00:01:59,880 Matthew Kidman: most Australian companies are exposed to, is still strong with 40 00:01:59,880 --> 00:02:02,820 Matthew Kidman: an expectation of slowing as the calendar year unfolds. The 41 00:02:02,820 --> 00:02:05,340 Matthew Kidman: other thing obviously that's hit us that's already been here 42 00:02:05,340 --> 00:02:08,880 Matthew Kidman: is inflation and how do companies handle that and can 43 00:02:08,880 --> 00:02:12,269 Matthew Kidman: they pass those costs on? You mentioned Transurban, big tollway 44 00:02:12,270 --> 00:02:15,930 Matthew Kidman: operator in Australia and offshore. Their contracts to run those 45 00:02:15,930 --> 00:02:20,550 Matthew Kidman: tollways is inflation indexed, which is terrific, they've been able 46 00:02:20,550 --> 00:02:22,800 Matthew Kidman: to do that. Their numbers come out, they pretty well 47 00:02:22,800 --> 00:02:25,500 Matthew Kidman: hit the mark. Other companies won't be so lucky, but 48 00:02:25,500 --> 00:02:28,620 Matthew Kidman: so far, so good. We saw in the insurance sector 49 00:02:28,620 --> 00:02:33,000 Matthew Kidman: you mentioned Suncorp. Well, IAG actually pre- announced a week 50 00:02:33,000 --> 00:02:37,139 Matthew Kidman: or so back and they got clobbered by inflationary claims, Suncorp 51 00:02:37,139 --> 00:02:39,120 Matthew Kidman: was able to manage it, it got bought on day 52 00:02:39,120 --> 00:02:42,360 Matthew Kidman: one, so they're the big issues that are affecting the 53 00:02:42,360 --> 00:02:43,500 Matthew Kidman: individual companies. 54 00:02:43,860 --> 00:02:46,620 Sean Aylmer: Okay, can we go into some of the sectors? I 55 00:02:46,620 --> 00:02:49,800 Sean Aylmer: know retail is one that's held by many, many people 56 00:02:49,800 --> 00:02:52,320 Sean Aylmer: out there. What do you think it means for the 57 00:02:52,320 --> 00:02:55,290 Sean Aylmer: discretionary and the consumer staples coming up? 58 00:02:55,740 --> 00:02:58,860 Matthew Kidman: Yeah, that's interesting. It feels like the people got the 59 00:02:58,860 --> 00:03:01,050 Matthew Kidman: discretionary wrong at the back end of last year. Things 60 00:03:01,050 --> 00:03:03,750 Matthew Kidman: were going to be stronger for longer and that's played 61 00:03:03,750 --> 00:03:06,990 Matthew Kidman: out now. A lot of stocks have rallied, but the 62 00:03:06,990 --> 00:03:11,669 Matthew Kidman: expectations are that we will see a slowdown sometime in 63 00:03:11,669 --> 00:03:13,680 Matthew Kidman: the six months. Now they've been expecting that for a 64 00:03:13,680 --> 00:03:17,310 Matthew Kidman: long time, but it's been a bullish area, so I 65 00:03:17,310 --> 00:03:19,740 Matthew Kidman: would think that unless, and we saw Nick Scali who 66 00:03:19,740 --> 00:03:24,660 Matthew Kidman: are the furniture manufacturers and retail outlets, they had a 67 00:03:24,660 --> 00:03:27,600 Matthew Kidman: great result, but they said January was down on last 68 00:03:27,600 --> 00:03:30,090 Matthew Kidman: year and so the market sold that aggressively. That's what 69 00:03:30,090 --> 00:03:32,669 Matthew Kidman: the market's looking for, sign that things are slowing down 70 00:03:32,790 --> 00:03:36,270 Matthew Kidman: and so I think consumer discretionary is going to be 71 00:03:36,270 --> 00:03:39,960 Matthew Kidman: tough to actually be able to put out the results 72 00:03:39,990 --> 00:03:42,570 Matthew Kidman: and so their share prices go up. It'll be rare. 73 00:03:42,930 --> 00:03:45,450 Matthew Kidman: The staples on the other hand seem at last to 74 00:03:45,450 --> 00:03:47,760 Matthew Kidman: be coming to grips with the inflationary environment, which we 75 00:03:47,760 --> 00:03:51,060 Matthew Kidman: talked about before, and there's a general feel towards those 76 00:03:51,060 --> 00:03:54,930 Matthew Kidman: defensive sectors because last year inflation was hurting them. They 77 00:03:54,930 --> 00:03:57,180 Matthew Kidman: were passing it on, but they were lagging. Now, it 78 00:03:57,180 --> 00:04:01,470 Matthew Kidman: seems like food prices are moderating and you're getting those 79 00:04:01,470 --> 00:04:04,380 Matthew Kidman: price increases are helping their margins, so it's turned a 80 00:04:04,380 --> 00:04:07,770 Matthew Kidman: little bit, so there's a reasonable amount of expectation about 81 00:04:07,770 --> 00:04:11,400 Matthew Kidman: coals, net cash and obviously Woolworths. Even a little bit 82 00:04:11,400 --> 00:04:13,830 Matthew Kidman: for Westfarmers, they sit in the middle of discretionary and 83 00:04:13,830 --> 00:04:17,940 Matthew Kidman: staple at obviously with Bunnings, and then you've got Endeavor 84 00:04:17,940 --> 00:04:20,190 Matthew Kidman: which was spun out of Woolworths. They're the ones that 85 00:04:21,120 --> 00:04:24,000 Matthew Kidman: the market is heading towards, it's a bit more defensive. 86 00:04:24,540 --> 00:04:26,549 Sean Aylmer: All right. I just want to mention talk about tech 87 00:04:26,550 --> 00:04:28,650 Sean Aylmer: stocks for a moment. It seems that that is one 88 00:04:28,650 --> 00:04:32,910 Sean Aylmer: sector where the macro theme really still is maybe not 89 00:04:32,910 --> 00:04:35,610 Sean Aylmer: dominant, but very, very important because as soon as there's 90 00:04:35,610 --> 00:04:39,120 Sean Aylmer: expectations of higher rates, the tech stocks seem to get 91 00:04:39,420 --> 00:04:42,180 Sean Aylmer: sold off and then the opposite also . 92 00:04:42,750 --> 00:04:45,570 Matthew Kidman: Correct. It's been interesting, talking about this the other day 93 00:04:45,570 --> 00:04:49,109 Matthew Kidman: with a few people. The tech market in Australia is not very deep, nothing like 94 00:04:49,110 --> 00:04:51,630 Matthew Kidman: the US and parts of Europe, but we do have 95 00:04:51,630 --> 00:04:55,950 Matthew Kidman: a handful of reasonably sized tech related companies and then 96 00:04:55,950 --> 00:04:57,900 Matthew Kidman: we've got a whole bunch of smaller ones who are 97 00:04:57,900 --> 00:04:59,820 Matthew Kidman: trying to get out of the ground and become those 98 00:04:59,820 --> 00:05:04,109 Matthew Kidman: bigger companies. The larger companies are doing a great job, 99 00:05:04,200 --> 00:05:07,859 Matthew Kidman: whether it be TechnologyOne, WiseTech and the like. They've been 100 00:05:07,860 --> 00:05:11,670 Matthew Kidman: able to pass on those cost increases, but they're expensive 101 00:05:11,670 --> 00:05:14,460 Matthew Kidman: and your analysis is if interest rates go up and 102 00:05:14,460 --> 00:05:17,429 Matthew Kidman: we're talking the longer dated bonds here, because when you 103 00:05:17,760 --> 00:05:20,490 Matthew Kidman: analyze what a company's worth, you're doing the discount rate 104 00:05:20,490 --> 00:05:22,980 Matthew Kidman: of what it's worth today on future cash flows, those 105 00:05:22,980 --> 00:05:25,320 Matthew Kidman: bond rates, yields go back up, which they have in 106 00:05:25,320 --> 00:05:27,990 Matthew Kidman: the last couple of weeks. Those stocks struggle. I got 107 00:05:27,990 --> 00:05:32,279 Matthew Kidman: to say at the smaller end, in more aspirational technology 108 00:05:32,279 --> 00:05:34,950 Matthew Kidman: companies, which there's a lot more of, it's been very 109 00:05:34,950 --> 00:05:37,080 Matthew Kidman: difficult. You get the odd one like Nuix, which has 110 00:05:37,080 --> 00:05:39,599 Matthew Kidman: been a colorful character on the share market since it 111 00:05:39,600 --> 00:05:42,330 Matthew Kidman: listed. It got a good result during the week in 112 00:05:42,330 --> 00:05:44,400 Matthew Kidman: the sense that one of its legal cases went in 113 00:05:44,400 --> 00:05:48,150 Matthew Kidman: their favor and it bounced. But generally those small, struggling 114 00:05:48,150 --> 00:05:50,880 Matthew Kidman: to be profitable tech companies, I don't see a lot 115 00:05:50,880 --> 00:05:52,620 Matthew Kidman: of life for them at the moment. And the big 116 00:05:52,620 --> 00:05:55,020 Matthew Kidman: ones, they're going to rely on interest rates rather than 117 00:05:55,020 --> 00:05:56,490 Matthew Kidman: outrageously good earnings. 118 00:05:57,150 --> 00:05:59,159 Sean Aylmer: Stay with me, Matthew. We will be back in a 119 00:05:59,160 --> 00:06:08,190 Sean Aylmer: moment. My guest this morning is Matthew Kidman, principal at 120 00:06:08,190 --> 00:06:13,620 Sean Aylmer: Centennial Asset Management. Industrials. It's a sector which is actually 121 00:06:13,620 --> 00:06:16,320 Sean Aylmer: hard, sort of an amorphous group of companies out there 122 00:06:16,320 --> 00:06:18,630 Sean Aylmer: when we just put them all in the industrials. We 123 00:06:18,630 --> 00:06:21,750 Sean Aylmer: have had some come out and they're a group where 124 00:06:21,750 --> 00:06:24,990 Sean Aylmer: you can really see inflation hitting basically input costs, but 125 00:06:24,990 --> 00:06:27,120 Sean Aylmer: often they're passing on to customs, Amcor, I think was 126 00:06:27,120 --> 00:06:28,979 Sean Aylmer: an example from that last week. What do you think 127 00:06:28,980 --> 00:06:31,500 Sean Aylmer: about the industrials? Well, firstly, who are the industrials and 128 00:06:31,500 --> 00:06:32,219 Sean Aylmer: what do you think about? 129 00:06:33,000 --> 00:06:36,930 Matthew Kidman: The industrials are a collection of various companies. Amcor being 130 00:06:36,930 --> 00:06:40,380 Matthew Kidman: one of the bigger ones, Brambles, they've got great overseas 131 00:06:40,380 --> 00:06:44,460 Matthew Kidman: exposure. Then you go down even to the steel companies and other 132 00:06:44,460 --> 00:06:49,560 Matthew Kidman: manufacturing companies like a Reliance and so on. Some are 133 00:06:49,920 --> 00:06:52,950 Matthew Kidman: exposed to different sectors. Their real problem is just what 134 00:06:52,950 --> 00:06:55,529 Matthew Kidman: you'll hit on. They've got two great things to convince 135 00:06:55,529 --> 00:06:59,219 Matthew Kidman: investors on, inflation, which Amcor came out. Numbers looked all 136 00:06:59,220 --> 00:07:02,099 Matthew Kidman: right, but they were struggling to pass on their costs and 137 00:07:02,100 --> 00:07:04,680 Matthew Kidman: they're lagging, which we talked about with the retailers before 138 00:07:05,010 --> 00:07:08,160 Matthew Kidman: the staples. The industrials, that's what they've got to cope 139 00:07:08,160 --> 00:07:10,380 Matthew Kidman: with. Can they pass their prices on? How much of 140 00:07:10,380 --> 00:07:12,840 Matthew Kidman: a lag is there? And they're going to be doing it into 141 00:07:12,840 --> 00:07:15,480 Matthew Kidman: a time where most things around the world are slowing, 142 00:07:15,480 --> 00:07:17,460 Matthew Kidman: maybe not as quickly as we thought at one stage, 143 00:07:17,460 --> 00:07:21,660 Matthew Kidman: but the economies are generally just easing off the US, 144 00:07:21,660 --> 00:07:24,420 Matthew Kidman: Europe and probably three or four months later will be 145 00:07:24,420 --> 00:07:27,360 Matthew Kidman: Australia. It's going to be tough for those companies. 146 00:07:27,780 --> 00:07:30,330 Sean Aylmer: Financials, it's not actually a big time for financials because 147 00:07:30,330 --> 00:07:32,670 Sean Aylmer: three of the big four banks don't report, although we 148 00:07:32,670 --> 00:07:35,370 Sean Aylmer: get quarterly reports, but Commonwealth Bank will be out. We've 149 00:07:35,370 --> 00:07:38,400 Sean Aylmer: had Macquarie Group, which was a pretty good result. What 150 00:07:38,400 --> 00:07:39,840 Sean Aylmer: do you think of them, financials? 151 00:07:39,930 --> 00:07:42,510 Matthew Kidman: Yeah. Well, Macquarie was just about the first one. They 152 00:07:42,510 --> 00:07:46,320 Matthew Kidman: gave us a quarterly update and it was very good, 153 00:07:46,440 --> 00:07:49,200 Matthew Kidman: but that as usual, Macquarie can pull a lot of levers, so it's 154 00:07:49,200 --> 00:07:52,740 Matthew Kidman: slightly different to our big mortgage based banks. I think 155 00:07:52,740 --> 00:07:54,660 Matthew Kidman: you get a really good result from CBA. It's the 156 00:07:54,660 --> 00:07:58,559 Matthew Kidman: biggest, it's important, you'll get a good result. We saw 157 00:07:58,980 --> 00:08:02,550 Matthew Kidman: with Macquarie with their banking arm, margins are pretty strong at 158 00:08:02,640 --> 00:08:06,000 Matthew Kidman: the moment with that net interest margin, and we saw 159 00:08:06,000 --> 00:08:08,190 Matthew Kidman: with ANZ, they put out there quarterly earlier this week 160 00:08:08,190 --> 00:08:11,760 Matthew Kidman: and debts were down. Everything about a good economy showed 161 00:08:11,760 --> 00:08:14,760 Matthew Kidman: up in the balance sheet. But maybe it's peak in 162 00:08:14,760 --> 00:08:19,890 Matthew Kidman: terms of their margins because the competitive nature of deposits, 163 00:08:19,890 --> 00:08:22,800 Matthew Kidman: which funds the bulk of their balance sheet was very 164 00:08:22,800 --> 00:08:24,870 Matthew Kidman: good for a while, but now people are jumping over 165 00:08:24,870 --> 00:08:26,910 Matthew Kidman: each other to give you better deposits and so on. 166 00:08:27,210 --> 00:08:30,840 Matthew Kidman: It's begun to become harder. This might be peak time 167 00:08:30,840 --> 00:08:33,030 Matthew Kidman: for the banks, but I think what you'll find is 168 00:08:33,059 --> 00:08:35,550 Matthew Kidman: they will report or Commonwealth Bank will report and the 169 00:08:35,550 --> 00:08:37,740 Matthew Kidman: others will give their quarterlies and they'll look pretty good, 170 00:08:37,800 --> 00:08:40,950 Matthew Kidman: and that'll be, that might push them a little bit 171 00:08:40,950 --> 00:08:43,589 Matthew Kidman: higher, but as I said, the 3, 4, 6 months 172 00:08:43,590 --> 00:08:44,939 Matthew Kidman: out might get a bit tough for them. 173 00:08:45,450 --> 00:08:47,820 Sean Aylmer: Okay. I want to mention healthcare and then I want 174 00:08:47,820 --> 00:08:49,589 Sean Aylmer: to go into small caps because you've obviously spent a 175 00:08:49,590 --> 00:08:51,600 Sean Aylmer: lot of your years looking at small caps particularly, but 176 00:08:51,600 --> 00:08:52,620 Sean Aylmer: just quickly, healthcare. 177 00:08:53,100 --> 00:08:57,420 Matthew Kidman: Healthcare is interesting because once again, it's various companies, but 178 00:08:57,420 --> 00:08:59,820 Matthew Kidman: a lot of them at the big end have overseas 179 00:08:59,820 --> 00:09:02,820 Matthew Kidman: exposures and so in this period it's going to be 180 00:09:02,820 --> 00:09:04,979 Matthew Kidman: hard because they're going to be fighting a stronger Aussie 181 00:09:04,980 --> 00:09:07,770 Matthew Kidman: dollar, which has been rallying three or four months in 182 00:09:07,770 --> 00:09:11,820 Matthew Kidman: a row. But I think they get support over time, 183 00:09:11,880 --> 00:09:15,870 Matthew Kidman: especially if we can't stop the interest rate cycle. If 184 00:09:15,870 --> 00:09:17,940 Matthew Kidman: the fed's got to keep going, if the reserve bank's 185 00:09:17,940 --> 00:09:19,590 Matthew Kidman: got to keep going into the middle of the year, 186 00:09:19,890 --> 00:09:22,110 Matthew Kidman: that's probably a safe place to be because they are 187 00:09:22,110 --> 00:09:25,260 Matthew Kidman: defensive and if the US has got to keep raising 188 00:09:25,260 --> 00:09:27,450 Matthew Kidman: interest rates, we get a bad inflation number next week, 189 00:09:27,450 --> 00:09:29,910 Matthew Kidman: that US Dollar's probably going to firm. Just keep an 190 00:09:29,910 --> 00:09:31,920 Matthew Kidman: eye out for that. That's not a bad place to be. 191 00:09:32,790 --> 00:09:34,710 Sean Aylmer: Okay. Small caps, Matthew, you've spent a lot of time 192 00:09:34,710 --> 00:09:36,719 Sean Aylmer: looking at small caps. How do you think they will 193 00:09:36,720 --> 00:09:40,620 Sean Aylmer: perform over the next six or 12 months vis-a-vis large caps? 194 00:09:41,190 --> 00:09:43,620 Matthew Kidman: Yeah, I think over a 12- month period you're going 195 00:09:43,620 --> 00:09:45,689 Matthew Kidman: to get a good return. There's no doubt about that 196 00:09:45,690 --> 00:09:48,929 Matthew Kidman: because they've been sold off. There's more opportunities across a 197 00:09:48,929 --> 00:09:52,349 Matthew Kidman: lot of different industries. I wouldn't like to say everyone's 198 00:09:52,350 --> 00:09:55,140 Matthew Kidman: going to perform, but I think this reporting season is 199 00:09:55,140 --> 00:09:57,990 Matthew Kidman: going to be very tough for them because it's going 200 00:09:57,990 --> 00:09:59,880 Matthew Kidman: to be really hit and miss. As I said, if 201 00:09:59,880 --> 00:10:02,250 Matthew Kidman: it was back before Christmas in December when everyone was a bit 202 00:10:02,400 --> 00:10:04,800 Matthew Kidman: down in the mouth and valuations were low. But things have 203 00:10:04,800 --> 00:10:09,030 Matthew Kidman: rallied 10, 15% for a lot of companies. And I think this 204 00:10:09,090 --> 00:10:11,459 Matthew Kidman: is going to be the messiest results season because it's 205 00:10:11,460 --> 00:10:15,449 Matthew Kidman: the transition from an old economy that was doing quite 206 00:10:15,450 --> 00:10:17,910 Matthew Kidman: well to where we're going with higher interest rates and 207 00:10:17,910 --> 00:10:20,729 Matthew Kidman: there'll be a slowdown. I think that makes it hard 208 00:10:20,730 --> 00:10:23,130 Matthew Kidman: in the short term for most small caps, not all, 209 00:10:23,130 --> 00:10:26,130 Matthew Kidman: but a lot. There'll be a lot of volatilities we 210 00:10:26,130 --> 00:10:30,030 Matthew Kidman: talked about before. It's hard with reporting season now because 211 00:10:30,030 --> 00:10:33,480 Matthew Kidman: it's a trading event for most people. The key here, 212 00:10:33,480 --> 00:10:36,330 Matthew Kidman: if anyone's watching results, is look at them, but maybe 213 00:10:36,330 --> 00:10:38,970 Matthew Kidman: just take a few days to digest it because we'll 214 00:10:38,970 --> 00:10:42,660 Matthew Kidman: see company prices move around a lot and probably not 215 00:10:42,660 --> 00:10:46,230 Matthew Kidman: justified, but I think most of them will report decent 216 00:10:46,230 --> 00:10:49,620 Matthew Kidman: results. But their outlook will reflect that things are slowing 217 00:10:49,620 --> 00:10:52,290 Matthew Kidman: down globally, especially in Australia where they've got the exposure. 218 00:10:52,500 --> 00:10:56,369 Matthew Kidman: Now, if we get some benign inflation numbers and the 219 00:10:56,370 --> 00:10:59,670 Matthew Kidman: Australian Dollar, especially how the US and the Australian Dollar 220 00:10:59,670 --> 00:11:02,490 Matthew Kidman: continues to firm, so it's come from 62 cents, got 221 00:11:02,490 --> 00:11:05,520 Matthew Kidman: up to 7, 1 now back to high sixties, if 222 00:11:05,520 --> 00:11:08,850 Matthew Kidman: it firms, that's always a great sign for the Australian small cap 223 00:11:08,850 --> 00:11:12,839 Matthew Kidman: market. It means that people aren't as nervous, people are 224 00:11:12,840 --> 00:11:14,400 Matthew Kidman: a bit more confident, so just keep an eye on 225 00:11:14,400 --> 00:11:17,040 Matthew Kidman: that Australian Dollar. If the Australian Dollar falls back into 226 00:11:17,040 --> 00:11:18,840 Matthew Kidman: the mid- sixties, I think it's a tough time in 227 00:11:18,840 --> 00:11:20,850 Matthew Kidman: the short term for a small caps. 228 00:11:21,330 --> 00:11:23,190 Sean Aylmer: Matthew, thank you for talking to Fear and Greed. 229 00:11:23,580 --> 00:11:24,120 Matthew Kidman: Thanks Sean. 230 00:11:24,630 --> 00:11:27,840 Sean Aylmer: That was Matthew Kidman, principal at Centennial Asset Management. This 231 00:11:27,840 --> 00:11:30,179 Sean Aylmer: is the Fear and Greed daily interview. Remember, this information 232 00:11:30,179 --> 00:11:32,459 Sean Aylmer: is general in nature, and of course you should seek 233 00:11:32,460 --> 00:11:35,910 Sean Aylmer: professional advice before making any investment decisions. Join us every 234 00:11:35,910 --> 00:11:38,309 Sean Aylmer: morning for the full episode of Fear and Greed, Australias 235 00:11:38,309 --> 00:11:41,429 Sean Aylmer: most popular business podcast, Sean Aylmer. Enjoy your day.