Shares in New World Development (NWD) yesterday surged 10.83 per cent as the group was meeting fund managers in Hong Kong to promote its stock after the announcement of disappointing profit results. The company's shares closed at $15.35. New World Development last week posted a 40.88 per cent drop to $1.26 billion in its full-year results to June 30. It is understood that the group's executives will next week start meeting institutional investors in Europe to market its mainland property unit New World China Land. Shares in New World China Land yesterday closed up $0.075 to $3.80, still far below the issue price of $9.50 when they were floated on the stock exchange in July. Some analysts said the New World Development surge was based on a technical rebound and short-covering ahead of the launch of a government index fund. The rebound also came as rumours circulated in the market that the company has plans to buy out the Chinese medicine firm Tung Fong Hung (Holdings). Dresdner Kleinwort Benson property analyst Terry Ip expected the rebound would be short-lived, taking into account the dismal outlook for the group's earnings this year. Goldman Sachs recently downgraded the stock to 'market performer' from 'market outperformer' as the catalysts to boost earnings were temporarily absent. In its latest research report, the brokerage house said the catalysts for New World Development were a better valuation for its telecommunications assets, which were likely to be sold or partially sold. Other accelerators for its earnings included an improved outlook for its businesses in the mainland and a return to historical production volumes for its Hong Kong property business. But Goldman Sachs said that New World Development was well on track for a recovery. PROPERTY
