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Speaker 1: Today on Fear and Greed business news. You can use

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Speaker 1: soul Pats and Brickworks to soul Pats and Brickworks to merge,

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Speaker 1: creating a top forty company. On the ASX, relations between

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Speaker 1: Canberra and Washington worson over defense spending and regional Australia

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Speaker 1: beating the capital cities when it comes to house price growth.

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Speaker 1: Plus Ukraine's audacious attack on Russian military installments and byd

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Speaker 1: told to stop discounting it's electric vehicles. It's Tuesday, the

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Speaker 1: third of June twenty twenty five. I'm Michael Thompson and

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Speaker 1: good morning Sean Aylmer. Good morning, Michael, Sean great newsletter

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Speaker 1: this morning. If you haven't signed up already, head along

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Speaker 1: to Fearangreed dot com dot au. I'll put a link

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Speaker 1: in today's show notes, so it's very easy to do

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Speaker 1: it and you will get the newsletter every weekday by

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Speaker 1: six am. Quick cheat sheet, isn't it?

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Speaker 2: Quick cheat sheet? We've got six stories, plus tables, plus

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Speaker 2: a bit of commentary, all sorts of things in there

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Speaker 2: that you need to get your day going.

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Speaker 1: And it takes about three minutes to read and you

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Speaker 1: will guaranteed arrive at work better prepared than your colleague.

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Speaker 1: On with the show, Sean, on with It. The main

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Speaker 1: story this morning is big one. One of Australia's biggest conglomerates,

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Speaker 1: soul Pats, is merging with building materials group Brickworks, creating

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Speaker 1: a new company worth around fourteen billion dollars.

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Speaker 2: Both companies have a storied history in corporate Australia and

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Speaker 2: are backed by the billionaire Milner family. For the last

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Speaker 2: fifty six years, each company has owned part of the other. Currently,

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Speaker 2: soul Patz owns about forty three percent of Brickworks. Brickworks

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Speaker 2: has about twenty six percent of soul Pats. The idea

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Speaker 2: was that each would buy each other's shares in order

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Speaker 2: to protect themselves from corporate raiders, and it has succeeded

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Speaker 2: for nearly six decades. The boss of soul Pats, Todd Barlow,

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Speaker 2: yesterday said merging now made strategic and financial sense. Simplifying

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Speaker 2: the structure it adds scale creates a more investable company.

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Speaker 2: Is the country's second oldest listed company. It was founded

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Speaker 2: in the eighteen eighties as a pharmacy business in Sydney's Balmain,

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Speaker 2: listed in nineteen oh three as Washington h Soul Pattinson.

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Speaker 2: Nowadays it has interests in coal, Telco's finance, all sorts

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Speaker 2: of things. The current chair, Robert Milner, is the fourth

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Speaker 2: member of the family to run the business. Brickworks listed

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Speaker 2: on the AX in nineteen sixty, though it is more

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Speaker 2: than ninety years old. Guess what it does.

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Speaker 1: Wouldn't have anything to do with bricks, that's.

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Speaker 2: Right, makes bricks forty five manufacturing plans. It does other things,

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Speaker 2: but primarily bricks. Bricks seventeen Blix bricks seventeen different brands,

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Speaker 2: including austral Bricks, which Michael and I'm the build a

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Speaker 2: house I had, I know all about austral Bricks.

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Speaker 1: Oh yeah, you paid a lot of money to ostral Bricks.

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Speaker 1: I'm kissing at the time.

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Speaker 2: Anyway, the two have finally come together.

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Speaker 1: Was there a sense of inevitability about that? Then? If

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Speaker 1: they did own such sizeable chunks of each other, was

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Speaker 1: it always going to happen?

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Speaker 2: Yes, And there's been kind of corporate raids on it.

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Speaker 2: There's been investment bankers trying to pull them together for

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Speaker 2: a long long time. Now it's actually happening.

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Speaker 1: Okay, So how big just in relative terms compared to say,

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Speaker 1: other companies on the as ASX. How big is this

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Speaker 1: going to be once the merger is actually completed.

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Speaker 2: Well on the back of share price jumps yesterday, so

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Speaker 2: Brickworks was up twenty seven percent, sol Pats was up

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Speaker 2: sixteen percent. The new entity will be close to a

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Speaker 2: top forty company. Now they're talking about a fourteen billion

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Speaker 2: dollar deal. To be honest, after the share price jumps yesterday,

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Speaker 2: we're talking close at eighteen or nineteen, possibly twenty billion dollars.

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Speaker 2: It's sort of, you know, around Quantus, James Hardy, Jbhi

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Speaker 2: Fi Cochlear, So that's kind of where we're going. Sol

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Speaker 2: Pat's boasts of never having missed a dividend since listing

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Speaker 2: in nineteen oh three.

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Speaker 1: It's a pretty impressive record.

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Speaker 2: And it's increased dividends every year for twenty four years.

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Speaker 2: So even during COVID it increased dividends. Creating one company

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Speaker 2: will certainly help that streak keep going. Creates a bigger,

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Speaker 2: more investable company. Given the share price jump yesterday, clearly

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Speaker 2: investors like it.

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Speaker 1: Sean, When I was reading about this story yesterday, I

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Speaker 1: heard for the first time the term dividend aristocrats. It

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Speaker 1: is companies, and it's come out of the US companies

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Speaker 1: that have been able to increase their dividends year on

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Speaker 1: year for twenty five years. Oh wow, So that means

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Speaker 1: that sole part of you away is on the verge

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Speaker 1: of doing that, right. Yeah. Isn't that a cool little

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Speaker 1: piece of trivia? Cool?

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Speaker 2: Yep?

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Speaker 1: Anyway, Moving away now from that story, moving to politics

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Speaker 1: Sean relations between Canberra and Washington over defense spending are worsening,

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Speaker 1: with Prime Minister Anthony Abernezi rejecting US calls for Australia

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Speaker 1: to spend another forty billion dollars a year on the military.

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Speaker 2: Yesterday morning, the Pentagon issue a statement about the meeting

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Speaker 2: between Defense Mister Richard Miles and US Defense Secretary Peter

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Speaker 2: Hegsath over the weekend. It says that Secretary Hexath conveyed

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Speaker 2: that Australia should increase its defense spending to three and

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Speaker 2: a half percent of its GDP as soon as possible. Now,

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Speaker 2: Australia's budgeted for defense spending to hit about two and

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Speaker 2: a half percent of GDP by the end of the year. Yesterday,

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Speaker 2: the Prime Minister pushed back on the US's demands. I

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Speaker 2: quote him, what you should do in defense is decide

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Speaker 2: what you need your capability and then provide for it

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Speaker 2: really does add to tensions over particularly tariffs. But now defense,

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Speaker 2: now the tariffs and steel and aluminium, which were doubled

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Speaker 2: over the weekend, is a point end of that discussion.

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Speaker 2: But you can really see defense kind of joining maybe

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Speaker 2: two point ends. I don't think that's good. That's how

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Speaker 2: it works, but it's all over the show. That's all right.

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Speaker 2: A fork did a third one.

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Speaker 1: That's a good image, isn't it have a fork just

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Speaker 1: with two points right? Like a barbecue fork only has

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Speaker 1: like a carving side. What. I love that.

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Speaker 2: Story, very serious story. You're off because you're excited about

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Speaker 2: your barbecue fork. The previous story, which was about the

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Speaker 2: merger of two big companies, you thought, oh, aristocrat.

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Speaker 1: Like, there's always another angle.

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Speaker 2: Stick to the main game.

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Speaker 1: No, no, I refuse as someone who does stick to

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Speaker 1: the main game. Your guest today, Sean. After the show,

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Speaker 1: you were speaking with James Current, the professor of modern

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Speaker 1: history at Sydney University, a podcaster, a columnist. He knows

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Speaker 1: his stuff, he.

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Speaker 2: Does and is a lovely fella. We talked to him

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Speaker 2: about what's going on around the globe. We start with

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Speaker 2: us and Australia and China, how that fits into it,

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Speaker 2: how Australia should play it. Then we move into Europe

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Speaker 2: and talk about that as well, kind of. I mean,

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Speaker 2: James is extremely knowledgeable on this and he's just got

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Speaker 2: an interesting take on how the government is performing, the

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Speaker 2: Australian government's performing dealing with Donald Trump and how it

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Speaker 2: should perform.

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Speaker 1: It's a great chat. It is coming up after the

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Speaker 1: show now. Regionalist Australia is leading the national property markets,

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Speaker 1: with the strongest growth over the past year coming in

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Speaker 1: Western Australia and South Australia outside Perth and Adelaide.

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Speaker 2: That's right, Perth and Adelaide are the best performing capital

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Speaker 2: city markets over the past twelve months, according to Coatality

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Speaker 2: formerly known as court Logic, but the regions in those

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Speaker 2: states have performed even better beyond wa In South Australia,

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Speaker 2: the best performing state, it's Queensland over the past twelve months,

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Speaker 2: but the regions in the Sunshine State are doing even better.

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Speaker 2: They're up eight percent, whereas Brisbane's up a bit over

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Speaker 2: seven percent. If it invested in New South Wales, you

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Speaker 2: would have been better off buying regional prices up more

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Speaker 2: than three percent there, compared to just over one percent

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Speaker 2: in Sydney Regional Victoria was flat, but Melbourne actually went backwards,

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Speaker 2: so again the regions beat the capital cities in that state.

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Speaker 2: The only other geography to go backwards was the act

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Speaker 2: at Fill more than half percent. I don't think that

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Speaker 2: has a region.

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Speaker 1: No, now, Sean, do you know what today is? It

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Speaker 1: is Tuesday.

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Speaker 2: Yes, I've been thrown I do know what it is.

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Speaker 1: Look what I have brought into the studio today. It

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Speaker 1: is the first official copies of my new novel, All

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Speaker 1: the Perfect Days, which is published today. Nearly dropped it

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Speaker 1: and it is in bookshops from today.

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Speaker 2: It's a big day, Michael. That's very very something to

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Speaker 2: be very proud of. Thank you your second novel. And

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Speaker 2: I've got to say I read it. Oh really yeah,

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Speaker 2: well actually that's not true. I'm about fifty pages from

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Speaker 2: the end.

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Speaker 1: Oh. I won't spoil it.

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Speaker 2: No, but it's fantastic. It is an absolute page turner. Oh,

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Speaker 2: that's what i'd say. And of course we'll be talking

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Speaker 2: about it on Thursday night.

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Speaker 1: That's right. We have the launch of the book, but

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Speaker 1: we also have for those who are able to come along,

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Speaker 1: and we are doing this in Sydney, the first ever

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Speaker 1: live recording of Fear and Greed's weekend edition. It's going

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Speaker 1: to be a whole lot of fun. It's going to

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Speaker 1: be a really good night. There are still a few

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Speaker 1: tickets available. If you're able to make it, then please

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Speaker 1: you need the book. It is free. I'll put a

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Speaker 1: link in today's show notes. You can get those tickets

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Speaker 1: through event right. But please come along and join us.

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Speaker 1: If you happened to be in Sydney. We would love

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Speaker 1: to see you there, We would. Michael and we will

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Speaker 1: take a quick break now, Sean, and we'll be back

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Speaker 1: in a moment with the rest of the day's business news. Sean.

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Speaker 1: Prime Minister Anthony Alberanezi says he is considering introducing low

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Speaker 1: and zero interest loans to assist farmers through the drought.

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Speaker 2: The Prime Minister said the nation is seeing more extreme

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Speaker 2: weather events of different varieties and the government's working with

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Speaker 2: farmer groups to address the challenges. He said there are

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Speaker 2: already some provisions for loans, the government's considering more. He

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Speaker 2: also announced the more funding for the Rural Financial Counseling

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Speaker 2: Service to assist farmers through this challenging period.

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Speaker 1: One company Sean who doesn't mind the tariff hikes. Blue

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Speaker 1: Scope Steel We've talked a bit about this in the past.

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Speaker 1: It owns a big meal in Ohio and could well

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Speaker 1: be a winner from the tariff as a result. At

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Speaker 1: share price job five percent yesterday.

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Speaker 2: So as we mentioned, Donald Trump doubled tariffs on steel

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Speaker 2: and aluminum fifty percent over the weekend. Bluescope's US operations

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Speaker 2: supply automotive white goods and agricultural industrial steel about three

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Speaker 2: million tons a year. Do you think Port Kember in

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Speaker 2: New South Wales big operation that's about two fifty thousand

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Speaker 2: to three hundred thousand tons a year. This is three million,

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Speaker 2: It's ten times bigger. Quite amazing that it's huge.

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Speaker 1: Something else interesting out of the US. It happened in

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Speaker 1: the US first, Now it's happening here. We're seeing investors

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Speaker 1: dumping gold ETFs and they're heading for cryptos instead.

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Speaker 2: Last month, bitcoin exchange traded funds attracted eighty seven million dollars,

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Speaker 2: compared to just one and a half million for gold

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Speaker 2: bullion ETFs. According to Van Eck, if investors got in early,

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Speaker 2: and they probably did pretty well. Bitcoin was up ten

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Speaker 2: percent in May, hitting an all time high just under

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Speaker 2: one hundred and twelve thousand US dollars a unit. Gold

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Speaker 2: was actually down slightly in May. In recent sessions, Bitcoin

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Speaker 2: has come back a bit, trading around one hundred and

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Speaker 2: five thousand US dollars a unit. But people are definitely

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Speaker 2: going into crypto ets just quickly.

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Speaker 1: Local markets, how do they perform?

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Speaker 2: Yesterday, S and Pax closed down a touched four and

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Speaker 2: fourteen points. Energy stocks led the way lower. Westpac NAB

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Speaker 2: both on one percent. Query Group about the same. Fortes

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Speaker 2: Kew Metals Group Rio they were down two percent. BHP

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Speaker 2: was off one point two. Best performers the steady stocks

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Speaker 2: Michaels level dependent on economic conditions, think Telstra, Transurban, Woolies

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Speaker 2: and Culs okay.

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Speaker 1: Turning to international news, now Ukraine. This is an incredible story.

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Speaker 1: This it launched a massive drone attack on four airfields

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Speaker 1: deep inside Russia. These are a long way across the border.

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Speaker 1: They housed strategic bombers used in air raids, and Ukrainian

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Speaker 1: officials say that more than forty aircraft were hit and destroyed.

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Speaker 2: According to the Financial Times, the drones struck four Russian

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Speaker 2: military airfields in one coordinated operation. Thousands of kilometers away

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Speaker 2: from the front line. Aircraft were burning, apparently including at

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Speaker 2: the Blaya Airfield, which is about five hundred kilometers east

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Speaker 2: of the Ukrainian border. Video footage filmed by Ukrainian reconnaissance

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Speaker 2: aircraft and shared by officials appear to show one Russian

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Speaker 2: airfield in flames and drones attacking several planes. On a

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Speaker 2: message on next President Vladimir Zelenski called it an absolutely

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Speaker 2: brilliant result. The operation actually was started planning eighteen months ago,

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Speaker 2: its codenain Operation Spiderweb. Zelenski oversaw it and remarkable to

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Speaker 2: be able to attack Russian military fields so far from home.

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Speaker 1: Yes, so deep. That was the thing about this, that

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Speaker 1: they were thousands of kilometers into Russia, and a lot

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Speaker 1: of these the big strategic aircraft, the big bombers, had

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Speaker 1: been moved further away from Ukraine in order to protect them,

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Speaker 1: and so they thought Russia thought they were safe being

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Speaker 1: that far away. And it's worth reading up on how

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Speaker 1: they did it in terms of smuggling. These drones in

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Speaker 1: driven in through the border across Russia on the back

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Speaker 1: of trucks, and the truck drivers didn't actually know what

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Speaker 1: they were carrying. And then all of a sudden, the

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Speaker 1: drones all just took off and flew over the It

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Speaker 1: sounds like science fiction. Yeah, it's quite extraordinary, incredible. Chinese

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Speaker 1: electric vehicle maker BYD Sean might be selling record numbers

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Speaker 1: of its cars, but a share price is falling on

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Speaker 1: the back of concerns over its deep discounting policy.

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Speaker 2: BYD sold three hundred and seventy seven thousand passenger cars

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Speaker 2: last month, the highest number this year, fifteen percent more

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Speaker 2: than twelve months ago. It's now selling more pure evs

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Speaker 2: than plug in hybrids. Interestingly, but it's share price down

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Speaker 2: five percent yesterday, fifteen percent last week. That's because it's

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Speaker 2: been cutting prices by up to one third. Now good

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Speaker 2: news for weak consumers. We like the idea that BYD

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Speaker 2: are cutting the prices. However, the reductions are so severe

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Speaker 2: that the People's Daily, which is basically the mouthpiece of

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Speaker 2: China's Communist Party, started has started criticizing it. And they

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Speaker 2: talk about the rat race competition, and they're worried that

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Speaker 2: low priced, low quality will damage the made in China brand.

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Speaker 2: Moral of this story, Michael, discount prices can't go on forever.

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Speaker 1: Okay, up next, Sean, The fear and Greed Daily Interview

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Speaker 1: Professor James Curran. It is a great interview just to

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Speaker 1: get across everything that's going on in geopolitics at the moment,

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Speaker 1: So well worth a listener. Is coming up next and

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Speaker 1: keep an eye on your playlist at midday today a

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Speaker 1: new episode of Ask Fear and Green Day bonus episode.

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Speaker 1: We have them four days a week, so kind of

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Speaker 1: not so much bonus, pretty regular. But yes, it is

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Speaker 1: a good one. This is all about GDP.

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Speaker 2: It is very in fact, the question is from Michael.

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Speaker 2: It's a very good question, he says. He just says,

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Speaker 2: is GDP the most important economic figure?

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Speaker 1: Yeah, cracking question. If you'd said it wasn't a good question,

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Speaker 1: I was going to tell you if it was from

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Speaker 1: someone else, as from a listener. No, it's actually from me.

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Speaker 1: If it's a good one, all right, Thank you, Sewan,

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Speaker 1: Thanks Michael. It's Tuesday, the third of June twenty twenty five.

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Speaker 1: Make sure you're following the podcast and please join us

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Speaker 1: online on LinkedIn, Instagram, x TikTok and Facebook. I'm Michael

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Speaker 1: Thompson And that was Fear and Agreed. Have a great day.