New World shares plunge 14% after it flags first loss in 20 years

New World Development, Hong Kong's most indebted major property developer, expects to post its first annual loss in two decades after writing down assets following an extended real estate slump.

The company will record a loss of HK$19 billion (S$3.2 billion) to HK$20 billion for the financial year ended in June, according to a filing to the Hong Kong stock exchange on Aug 31. The firm cited asset impairment, losses on investments and higher interest rates for the decline.

Its shares fell as much as 14 per cent on the morning of Sept 2 before closing 13 per cent lower at HK$6.83 for the day.

The developer, controlled by the family of billionaire Henry Cheng, has been under scrutiny in recent years due to its high debt levels.

Concerns over its financial struggles and overall pessimism on the property market have weighed on the shares, which have been among the worst performers for real estate companies in the city.