The weakening yuan has stripped value from the ASX this week but not all Australian companies are losers when China sneezes.
Analysts at Credit Suisse says the winners include those stocks which benefit from the dividend trade, international earners and those companies with a Chinese cost base.
Losers include commodity companies at least at first, Australian companies competing with Chinese companies and those with customers in China.
Here’s the equity strategy when the yuan is down:
Australian beneficiaries of a weaker Yuan include those exposed to the dividend trade (National Australia Bank, Macquarie Group and M2 Group), those with international earnings (Aristocrat, CSL and ResMed) and those with a some costs from China such as JB Hi-Fi, Harvey Norman and Breville.
Credit Suisse say stocks expected to suffer from further Yuan weakness include commodity producers Iluka, Origin, Santos, those competing with Chinese companies such as Arrium, Bluescope and Sims Metal, and those selling to Chinese consumers such as Crown and Treasury Wines.