New World, Sun Hung Kai Properties to offer clues amid rising property distress

DEBT woes from Hong Kong developer New World Development are set to continue as further losses loom.

The firm has been embroiled in turmoil as investors question its ability to cope with one of the highest debt burdens among the city’s developers.

In a dramatic bid to regain confidence, New World already replaced CEOs in rapid succession and has sought to use US$3.8 billion of additional properties as collateral to refinance some loans and ease liquidity pressure.

Peer Sun Hung Kai Properties is also due next week. Both companies’ outlook could hinge on to-be-announced measures for the city’s property market, expected in a budget speech by the government on Feb 26.

Looser restrictions to entice Chinese buyers could boost the sale of large luxury homes, said Bloomberg Intelligence (BI).

OCBC is expected to follow peers United Overseas Bank and DBS Group Holdings in returning cash to shareholders.

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New World proposes additional US$3.8b for loan collateral

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UBS halts margin loans on some New World Development securities

Asean Intelligence

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Sitting on at least S$3 billion in excess capital and backed by high-single-digit profit growth, OCBC could declare a special dividend, BI said. Buybacks would be a surprise as it might look to preserve cash for deals. BLOOMBERG