UK-exposed stocks shunned by investors

Clydesdale Bank has led a swift sell-off among local companies reliant on the UK for revenue.

Despite today’s fall, Clydesdale remains a good news story for those NAB shareholders who retained stock in the demerged vehicle. Picture: Mike Wilkinson/Bloomberg.

Australian investors have reacted swiftly to news of a heightened risk of a Brexit event, shunning several groups heavily reliant on the UK market for sales.

At the top of investors’ sell-off list was Clydesdale Bank, the only ASX-listed firm that derives all its revenue from the UK. The NAB spin-off endured its worst day since listing, sinking 6 per cent to $5.27 at 2.55pm (AEST).

Despite the fall Clydesdale remains a good news story for those NAB shareholders who retained stock in the demerged vehicle, remaining 25 per cent above its listing price in February.

Next on the hit list for traders came BT Investment and Henderson Group, both of which derive over 60 per cent of their revenue from UK sources, according to Bank of America Merrill Lynch.

In late afternoon trade, BT Investment backtracked 5 per cent to $9.16 and Henderson plunged 7 per cent to $4.64.

The moves represent a realisation the UK really could leave the European Union, with the latest polls showing a lead for the ‘Brexit’ vote. The surveys are complicated by a high proportion of people yet to make up their minds but show a clear and significant swing toward the departure option over the past few weeks.

A vote on the issue is due June 23, with many fearing a Brexit will weigh on business investment and hit growth.

Three other ASX-listed firms reap more than 25 per cent of their sales from the UK – Westfield, QBE Insurance and Iress – but the underperformance was less obvious as only around a third of their revenues are tied to Britain.

QBE endured the heaviest selling pressure of that trio, sliding 2.8 per cent to $11.62, outpacing a broader market drop of 2 per cent and falls of closer to 1.5 per cent from its main rivals.

Financial markets software firm Iress essentially matched the ASX200 with a 1.9 per cent retreat to $11.96, while Westfield shares managed to outperform, trading flat at $10.62.