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CEOWORLD magazine - Latest - Banking and Finance - New World Development Shares Soar by 23% After Adrian Cheng Steps Down as CEO

Banking and FinanceCEO Briefing

New World Development Shares Soar by 23% After Adrian Cheng Steps Down as CEO

Shares of New World Development, one of Hong Kong’s major property companies, surged by 23% on Friday after the unexpected resignation of Adrian Cheng, a member of the company’s founding family. The company had temporarily halted trading on Thursday, later announcing that Cheng would be stepping down to focus on “public services and personal commitments.”

Following his departure, Chief Operating Officer Eric Ma Siu-Cheung has been appointed as the new CEO, a rare instance of an outsider taking the helm of a family-controlled business in Hong Kong. This leadership shift comes at a critical time for the company, which is grappling with significant challenges.

New World Development recently reported an expected loss of between $2.4 billion and $2.6 billion for the financial year ending in June, driven by falling sales, investment losses, and impairment charges. The company is also burdened by high levels of debt, a problem that has been exacerbated by the broader property market struggles in Hong Kong and mainland China.

Market analysts view the change in leadership as a positive move, signaling improved corporate governance. Alicia Garcia-Herrero, Chief Economist for Asia Pacific at Natixis, noted that this development reflects the importance of having strong management in difficult times.

The sharp rise in New World Development’s stock is also being fueled by recent stimulus measures announced by China. The Chinese central bank has introduced policies aimed at stabilizing the economy, including steps to support the struggling real estate sector. On Thursday, China’s top leaders underscored the need for enhanced fiscal and monetary measures to prevent further declines in the real estate market, addressing broader concerns such as employment and an aging population.

 

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CEOWORLD magazine - Latest - Banking and Finance - New World Development Shares Soar by 23% After Adrian Cheng Steps Down as CEO
Anna Siampani
Anna Siampani, Lifestyle Editorial Director at the CEOWORLD magazine, working with reporters covering the luxury travel, high-end fashion, hospitality, and lifestyle industries. As lifestyle editorial director, Anna oversees CEOWORLD magazine's daily digital editorial operations, editing and writing features, essays, news, and other content, in addition to editing the magazine's cover stories, astrology pages, and more. You can reach Anna by mail at anna@ceoworld.biz