25 Australian stocks with big UK operations could be hit by Brexit, warns Credit Suisse

Even if Brexit wiped out on Friday $2.1 trillion from the global markets, experts say the impact of the decision by 52 percent of Britons to leave the European Union would not be as strong as the Lehman Brothers. However, it would still impact some Australian shareholders, especially companies with large operations in UK.

Business Insider explains that despite Lloyds Bank shares shedding 21 percent and RBS 27 percent, the Lehman Brothers and hedge fund LTCM’s collapse caused big losses to financial institutions and banks questioned each other’s solvency. In turn, investors, institutions and traders doubted the survival even of banking giant Citibank.

On the same day that the Brexit vote was known, stocks on the Australian Stock Exchange (ASX) with large UK operations logged losses. It was topped by CYBG – the holding company of Clydesdale Bank, a former NAB subsidiary – which declined 17.51 percent. Other major losers were fund managers BT Investment 14.19 percent and Henderson Group 12.03 percent.

In a new report by Credit Suisse, 25 Australian companies were listed as potentially at risk with the results of the Thursday EU referendum.

Among health care companies, the firms on the list are Ansell, Ramsay Health and Sonic Healthcare. Brambles is the only one in the support services on the list, as with Breville for appliances and Treasury Wine for alcohol. Among airlines, only Qantas is on the list, while other loners are Brambles for support services, Clydesdale for banks, Flight Centre for travel, Macquarie Group for diversified financial services, Wesfarmers for retailers and Iress for data processing.

Among asset managers, two are on the list – BT Investment Management and Henderson, while among REITs, on the list are Goodman, Lend Lease and Westfield. There are four insurers on the list, namely Insurance Australia, Medibank, QBE Insurance and Suncorp and two infrastructure firms, Macquarie Atlas and Sydney Airport.

Hasan Tevfik, who led the Credit Suisse research team that drew the list, says that since “many UK-exposed companies have already endured a considerable sell-off,” owning shares in the 25 listed Aussie companies “are only for the brave.”

Also on Friday, 10-year Australian bond yields went down 2 percent when the results of Brexit came out, while the Australian currency which slumped 4 percent but recovered over the weekend to US74.66ȼ, reports the Sydney Morning Herald.

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