Latest / What the Flux / Aussies are hoarding the pantry | Yen tanks, Uniqlo thanks | Anthropic's playing AI gatekeeper plus a special guest joins us

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Aussies are hoarding the pantry | Yen tanks, Uniqlo thanks | Anthropic's playing AI gatekeeper plus a special guest joins us · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Monday, the thirteenth
• 0:09
  Speaker 2: of April.
• 0:10
  Speaker 1: Jozi Wait. We spoke a few weeks ago about Combank's
• 0:12
  Speaker 1: one billion dollar mortgage fraud and that sounds big, but
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  Speaker 1: now across the Big four and Macquarie that amount has
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  Speaker 1: jumped over three billion. So I recommend just watch this space.
• 0:22
  Speaker 2: Heating up man. Speaking of heating up, the Flux app
• 0:25
  Speaker 2: has been heating up over the last few days with
• 0:27
  Speaker 2: thousands of people using the Flux subscription track to identify
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  Speaker 2: all the subscriptions that they have been paying every single
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  Speaker 2: month and not even using. We've saved some Flux uses
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  Speaker 2: hundreds and some thousands of dollars by just identifying all
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  Speaker 2: of the subscriptions they forgot about. So if you want
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  Speaker 2: Flux app and check out the subscription track.
• 0:44
  Speaker 1: Act to save some moula three delightful stories today, Josie Boy,
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  Speaker 1: let's do it for our first SPC. The fruit and
• 0:50
  Speaker 1: veged processor has been a major beneficiary as ossies are
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  Speaker 1: stocking up on baked beans and canned goods.
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  Speaker 2: Forget toilet paper. We've officially entered the baked beans era.
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  Speaker 1: Tell me all So. SPC is one of Australia's largest
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  Speaker 1: food manufacturers, best known for its pantry staple the.
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  Speaker 2: Kind of cancer that have been quietly sitting in your
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  Speaker 2: cupboard for decades collecting dust yep.
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  Speaker 1: Think SPC baked bean spaghetti, ARDMTA canned tomatoes, gold and
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  Speaker 1: valley fruit cups.
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  Speaker 2: And if you grew up in Australia, chances are SPC
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  Speaker 2: was in your lunch box at some point.
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  Speaker 1: Those little fruit snacks were strong trade currency in the playground.
• 1:22
  Speaker 1: Juice boy, you know it, I do and be man.
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  Speaker 2: SPC returned to the ASEX in twenty twenty four after
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  Speaker 2: nearly twenty years off the market.
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  Speaker 1: That was after they merged with Original Juice Company and.
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  Speaker 2: Now SPC said that its sales of canned goods has
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  Speaker 2: jumped out up to twenty percent in the last month.
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  Speaker 1: Mm hm, And what is the reason.
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  Speaker 2: Shoppers are stocking up on long life products because they're
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  Speaker 2: expecting a price increase over the coming months due to
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  Speaker 2: the war in the Middle East.
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  Speaker 1: Nothing like a bit of cost push inflation to drive
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  Speaker 1: up prices.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: Cost push inflation is when it becomes more expensive to
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  Speaker 1: produce goods, so businesses pass those costs onto consumers through
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  Speaker 1: higher prices.
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  Speaker 2: For contact being man, the price of oil per barrel
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  Speaker 2: jumped nearly sixty percent high as the start of this walk.
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  Speaker 1: Now does it? Oil isn't just about filling up your car.
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  Speaker 1: It affects almost everything.
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  Speaker 2: We're talking transport, manufacturing, packaging, even fertilizer for crops.
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  Speaker 1: In fact, locally transport providers have already increased prices by
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  Speaker 1: as much as thirty six percent.
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  Speaker 2: So companies like SPC are now dealing with higher costs
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  Speaker 2: across their entire supply chain.
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  Speaker 1: So to maintain their margins, they may increase product prices.
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  Speaker 2: The result, consumers end up paying more at the checkout,
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  Speaker 2: and that's a big reason why consumers are stocking up
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  Speaker 2: now before the price increase hits and a big reason
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  Speaker 2: why SPC is seeing the fruits of all its labor.
• 2:33
  Speaker 2: Floxam we love talking all things business and investing on
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  Speaker 2: our podcast, so we're very excited to be joined by
• 2:39
  Speaker 2: Sue Leaf from SMP down Jones Indices. Sue is the
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  Speaker 2: director and a pack head of Index Investment Strategy and
• 2:45
  Speaker 2: SMP DJI is the company behind some of the world's
• 2:48
  Speaker 2: most famous benchmarks, like the s and P five hundred
• 2:51
  Speaker 2: and the smpasx two hundred. Today we're getting to what
• 2:54
  Speaker 2: an index provider actually does, how companies get in or
• 2:57
  Speaker 2: get kicked out, and what's really going on behind the scenes.
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  Speaker 2: So sue ocome toward the flocks.
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  Speaker 3: Hi, thanks for having me.
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  Speaker 2: So starting with the basics, what exactly does an index
• 3:05
  Speaker 2: provider do? Can you briefly explain the role of SMP
• 3:08
  Speaker 2: DJI versus ATF brand like and ashes.
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  Speaker 3: In short, an index provider makes indices and an ETF
• 3:15
  Speaker 3: manager makes an investment product that mimics the performance of
• 3:18
  Speaker 3: an index, so investors can gain exposure to the index
• 3:22
  Speaker 3: by buying or selling the TF. An index provider, like
• 3:26
  Speaker 3: SMP thousands indices, designs, calculates, and maintains indices. An index
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  Speaker 3: is simply a list of securities that change based on
• 3:35
  Speaker 3: a set of rules. SMP thousands induses publishes many indices
• 3:39
  Speaker 3: across geographies and asset classes, and the most well known
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  Speaker 3: ones include the SMP five hundred that measures the largest
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  Speaker 3: and most liquid five hundred US stocks, or the smpasx
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  Speaker 3: two hundred, which measures the largest two hundred stocks in Australia.
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  Speaker 3: By contrast, an INTF brand like I Shares is a
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  Speaker 3: fund manager. They create investment products that aim to track
• 4:02
  Speaker 3: the performance of an index.
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  Speaker 1: Very interesting, and another question that I think many members
• 4:08
  Speaker 1: of our audience would love to hear is how do
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  Speaker 1: companies get into an index and who decides what's in
• 4:15
  Speaker 1: and what's out.
• 4:16
  Speaker 3: Yes, companies are selected for an index based on the
• 4:19
  Speaker 3: eligibility criteria defined in the index methodology. So SMP Dollsands
• 4:24
  Speaker 3: Indices sets these rules and regularly reviews the index to
• 4:29
  Speaker 3: ensure it reflects its stated objective. The methodology is transparent
• 4:34
  Speaker 3: and publicly available, so everyone can see exactly how the
• 4:38
  Speaker 3: index is calculated.
• 4:40
  Speaker 2: Okay, so let's get a little bit more practical here.
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  Speaker 2: Using the I Shares Global one hundred ATF as an example,
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  Speaker 2: how are companies actually assessed?
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  Speaker 3: Yes, the SMP Global one hundred index focuses on multinational
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  Speaker 3: blue chip companies with global significance, So how do they
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  Speaker 3: pick those stocks? One example is more than thirty percent
• 5:02
  Speaker 3: of a company's revenue needs to be generated outside of
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  Speaker 3: the company's country of domicile to be eligible for this index.
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  Speaker 3: What that means is these company's fortunes are often linked
• 5:13
  Speaker 3: to the global demand, not just the economic cycle of
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  Speaker 3: one country. This index contains many large kus companies like Nvidia, Apple, Microsoft, Amazon,
• 5:24
  Speaker 3: or Google, as well as South Korea Samsung Electronics, switzerlands Nesle,
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  Speaker 3: and Japan's Toyota Motor Corporation. And this index is designed
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  Speaker 3: to represent the large end global equities. So one screen
• 5:37
  Speaker 3: is a minimum market cap capitalization of five billion US dollars,
• 5:42
  Speaker 3: but the size isn't enough. A second key filter is liquidity,
• 5:46
  Speaker 3: which is basically how easily can this not be bought
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  Speaker 3: or sold? In practice, higher trading volume and better liquidity
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  Speaker 3: makes a company more index friendly because it's easier for
• 5:58
  Speaker 3: an index tracking fund to trade efficiently, So the index
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  Speaker 3: is not just big funds, but the big companies that
• 6:04
  Speaker 3: trade actively. And last, but not least, sector balance is
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  Speaker 3: considered to reflect the sector distribution of the global equity
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  Speaker 3: market through these one hundred stocks. A practical outcome of
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  Speaker 3: selecting the biggest global multinational is that the sector mix
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  Speaker 3: can look very different from the Australian market. For example,
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  Speaker 3: the SMP Global one hundred currently has about forty three
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  Speaker 3: percent in information technology, whereas SMPASX two hundred has only
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  Speaker 3: two percent.
• 6:36
  Speaker 2: Wow, So so good to have you on What the
• 6:38
  Speaker 2: Flex podcast learning more about the indices both in Australia
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  Speaker 2: and globally. Thanks for joining us, look forward to chatting again.
• 6:44
  Speaker 1: Thank you for our second story. Uniclo is heading for
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  Speaker 1: another record year with global expansion driving a surprise surge
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  Speaker 1: in profits.
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  Speaker 2: Unicloe officially the uniform of Australians right now, by man,
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  Speaker 2: so tell me more so.
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  Speaker 1: Uniclo is owned by a parent company called Retailing, which
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  Speaker 1: started as a single store in Hiroshima, Japan in nineteen
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  Speaker 1: eighty four.
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  Speaker 2: And be man, did you know the name Uniclo was
• 7:06
  Speaker 2: short for Unique Clothing? But the person submitting the company
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  Speaker 2: registration mistyped it with a Q instead of a C
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  Speaker 2: and the rest is history.
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  Speaker 1: Wow. Fast forward to today and Uniclo has got over
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  Speaker 1: twenty five hundred stores worldwide and will not stop growing.
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  Speaker 2: And now uniclothes lifted its full year profit forecast after
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  Speaker 2: reporting a much stronger than expected quarterly result.
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  Speaker 1: We're talking and operating profit jump of nearly thirty percent and.
• 7:28
  Speaker 2: Even better, b man, Uniclo upgraded its full year profit
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  Speaker 2: forecast to seven hundred billion yen.
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  Speaker 1: Oh wow, which puts it on track for a fifth
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  Speaker 1: consecutive record year.
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  Speaker 2: All right, numbers man, where is the growth coming from? Well,
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  Speaker 2: mainly North America and Europe. But Beman, Uniclo also has
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  Speaker 2: another secret weapon up at sleeve, the declining yen. Yeah,
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  Speaker 2: and so what is the key learning here? When your
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  Speaker 2: currency drops, your country can become a global shopping bargain overnight.
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  Speaker 1: Japanzien has fallen roughly twenty five to thirty percent against
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  Speaker 1: the US dollar since twenty twenty one, and Unicloe is
• 8:00
  Speaker 1: benefiting in two key ways.
• 8:02
  Speaker 2: Not only has the wiki enit dreven more tourism too Japan,
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  Speaker 2: but it's also helped with their sales.
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  Speaker 1: Tourists are basically arriving with empty suit cases and leaving
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  Speaker 1: dressed head to toe in Uniclo.
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  Speaker 2: In fact, b Man foreign shoppers now contribute around ten
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  Speaker 2: percent of unicloes domestic sales from Japan.
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  Speaker 1: But globally there's another tailwind. When uniclose sells in stronger
• 8:21
  Speaker 1: currencies like the US dollar or euro, those earnings convert
• 8:24
  Speaker 1: back into more yen on the company's financial statements, So
• 8:27
  Speaker 1: even if they sell the exact same number of clothes,
• 8:30
  Speaker 1: their revenue can still go up. So Jessie Boy currency
• 8:32
  Speaker 1: movements can amplify international earnings without any change in sales volume.
• 8:37
  Speaker 1: For our third and final story, Anthropy is holding back
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  Speaker 1: its most powerful AI model and only giving it to
• 8:43
  Speaker 1: big tech to stop hackers winning the AI arms race.
• 8:46
  Speaker 2: This one kind of feels the little sci fi eb man,
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  Speaker 2: Tell me what's happening.
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  Speaker 1: So, jazie boy. Anthropy is one of the world's biggest
• 8:52
  Speaker 1: AI companies, the one behind the Claude model.
• 8:54
  Speaker 2: Think chat jipt is quieter but arguably more powerful cousin.
• 8:58
  Speaker 2: Over the past few months, Claude has been every Yeah,
• 9:00
  Speaker 2: they've rolled out things like Claud Cowork cloud skills and
• 9:02
  Speaker 2: newer versions of Claud code too. And they've just built
• 9:05
  Speaker 2: a new AI model called Mythos, but they're not releasing
• 9:07
  Speaker 2: it to the public, okay, And why is that?
• 9:10
  Speaker 1: Well, because the thing is apparently a little too good,
• 9:13
  Speaker 1: a little bit too effective at hacking.
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  Speaker 2: And Theropy claims that Mythos has uncovered thousands of software
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  Speaker 2: vulnerabilities across thousands of companies, some that have been hiding
• 9:22
  Speaker 2: in systems for up to twenty seven years. So instead
• 9:26
  Speaker 2: of launching it like a normal AI product, Anthropy is
• 9:28
  Speaker 2: only giving access to a select group of heavy hitters
• 9:31
  Speaker 2: like your Amazon's, your Apples, your Microsoft, your Googles, and
• 9:33
  Speaker 2: your JP Morgans.
• 9:35
  Speaker 1: So what's the key learning here?
• 9:36
  Speaker 2: AI isn't just helping companies build better products, it's also
• 9:39
  Speaker 2: uncovering their weaknesses.
• 9:41
  Speaker 1: And in the cybersecurity world, the AI arms race has
• 9:44
  Speaker 1: become especially intense.
• 9:45
  Speaker 2: Yeah, we know that AI can now automate tasks that
• 9:48
  Speaker 2: usually required highly skilled and many humans, like scanning code,
• 9:52
  Speaker 2: identifying vulnerabilities, or even launching cyber attacks. In fact, the
• 9:56
  Speaker 2: man Mythos found a bug in software that had already
• 9:58
  Speaker 2: been tested over five million times and no human had
• 10:02
  Speaker 2: spotted it.
• 10:02
  Speaker 1: And if you think about cybersecurity, in the past, companies
• 10:05
  Speaker 1: usually had a bit more breathing room to respond to threats, but.
• 10:08
  Speaker 2: In this new world of AI, that window is shrinking fast.
• 10:11
  Speaker 1: And the stakes are pretty high. When you're talking about banks,
• 10:14
  Speaker 1: or energy companies and other systems that we all rely on,
• 10:17
  Speaker 1: for example being Man Commbanking, west Pack both use AWS
• 10:20
  Speaker 1: to store their cloud data, and NAB has ninety percent
• 10:22
  Speaker 1: of its apps in the cloud with a mix of AWS,
• 10:24
  Speaker 1: Microsoft as Or, and Google Cloud.
• 10:26
  Speaker 2: So Anthropy is trying to give the biggest cloud players
• 10:29
  Speaker 2: early access to these powerful tools before the bad actors
• 10:32
  Speaker 2: can get their hands on it and potentially act. If
• 10:34
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• 10:55
  Speaker 1: Thanks for listening and we'll see you on Wednesday. The
• 10:59
  Speaker 1: infant discussed in this podcast is intended to provide educational
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