STOCKWATCH: New World Devt slightly higher on Regent Hotel disposal

HONG KONG (AFX-ASIA) - New World Development shares were slightly higher but still underperforming the market in afternoon trade after news that the company will sell the Regent Hotel to Bass PLC for 346 mln usd in cash, dealers said.

	    The said the stock had traded unchanged over the morning and picked up only slightly after the news, with the sales price coming in below expectations.

	    At 3:12 pm, New World Development was up 0.10 hkd at 10.20 hkd on trade of 3.01 mln shares.

	    The Hang Seng Index was up 266.29 points at 13,725.47 on turnover of 6.27 bln hkd.

	    A property analyst with a regional brokerage said New World Development has finally found a buyer for the hotel and this will help it improve its debt position.

	    "Based on the selling price, I expect New World Development will reduce its gearing ratio to 42 pct from the current 46 pct," the analyst said, adding he expects New World Development will book the disposal as an exceptional gain for the year to June 2002.

	    However, the analyst said the selling price of 346 mln usd is lower than market expectations.

	    "The market had expected a price of about 3.2 bln hkd (410 mln usd), although that level, to me, was a little too high. 

	    "The selling price of 346 mln usd represents about 5.2 mln hkd per room and it is reasonable," he said.

	    The analyst said New World Development will have to dispose of other assets to further reduce its gearing ratio.

	    "The company has been trying to sell its telecom assets but it is not easy at the moment given the weak sentiment towards the global telecom sector," the analyst said.

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