The logo of New World Tower, where New World Development Company Limited is headquartered in Hong Kong, China, on Thursday, September 26, 2024.
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Hong Kong New World Development’s share price follows Founding family member Adrian Cheng resigns.
The Hong Kong-listed shares of the major development company rose 23% after trading resumed on Friday.
The company said in a statement, Trading suspended on Thursday Following Cheng’s departure, “pending an announcement,” he will devote more time to “public service and other personal commitments.”
The company announced that Chief Operating Officer Ma Siu-cheung has been appointed as its new chief executive, a rare move for an outsider to lead a Hong Kong family business.
developer, In a document last monthsaid it expected losses attributable to shareholders to be HK$19 billion (US$2.4 billion) to HK$20 billion (US$2.6 billion) in the fiscal year ended Juneweighed down by lower sales, investment losses and impairment charges.
The New World’s troubles come as real estate problems continue to plague Hong Kong and mainland China. Statements from developers indicate it is also burdened by rising debt levels.
“This clearly shows that corporate governance does matter. Having all these tycoons and their favorite sons or daughters, most of whom are sons, is not really the way to run these companies,” said Ally, chief economist for Asia Pacific at Natixis. Alicia Garcia-Herrero said.
“I think by now the tycoons in Asia, especially in Hong Kong, have realized that when the market is tough, it’s really hard to do well unless you have the best management,” she added.
The economist added that a major driver of New World’s share price surge was also attributed to China’s stimulus measures.
Hong Kong and Chinese stocks have posted broader gains in recent sessions after China’s central bank announced a raft of stimulus measures on Tuesday.
China’s top leader also announced on Thursday that authorities must work to stem the slide in the property market. Minutes of the meeting showed leaders urged stronger fiscal and monetary policy support to address a range of topics including employment and an aging population.
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