The winners and losers from China's move to weaken currency
Mainland airline and property shares hardest hit while export-driven companies rally at the prospect of wares becoming more competitive
Mainland airline stocks nosedived on Tuesday as the yuan's devaluation rippled across the markets, separating the winners and losers as a result of Beijing's unexpected currency move.
Apart from airline shares, fears for listed companies with large dollar liabilities drove down property counters, while export-driven companies like Li & Fung rallied at the prospect of their wares turning more competitive.
China Southern Airlines fell 18.06 per cent to HK$6.76 and China Eastern Airlines dropped 16.39 per cent to HK$5.46, their worst daily performance since the World Trade Centre attacks of September 11, 2001.
The central bank on Tuesday set the daily guidance point - around which the yuan is allowed to trade up or down 2 per cent against the US dollar - weaker by almost 1.9 per cent.
"Exporters in general and especially in low-margin sectors like garments will benefit from the lower currency. A 2 per cent fall can make a big difference on profit and loss," said Stuart Allsopp, the head of country risk and financial markets strategy at BMI Research in Singapore.
Trading giant Li & Fung, which supplies Western retail majors like WalMart and Target, rose 4.9 per cent to HK$5.70, its best one-day performance in nearly six months.