New World Development Chairman Cheng Yu-tung predicts that the local property market will become stable next year, and the housing prices will linger within a 10-percent range.

Speaking on the sidelines of the annual general meeting yesterday, Cheng Yu-tung told reporters that Hong Kong's economy won't be as hard-hit as the US and Europe, as it is backed by the mainland economy.

Talking about the local housing sector, he said overall housing market is expected to perform steadily in 2009, while fluctuation of flat prices will not exceed 10 percent.

"Although the financial turmoil is affecting the general sales in primary market, our projects' turnover doesn't see a notable drop recently," he said.

The company's executive director, Steward Leung, said that the company's new residential project in Yuen Long is still waiting for the approval of pre-sale consent. The company hasn't yet finalized the date to launch the project.

Managing director Henry Cheng said that the increase in mortgage rates won't hurt the property market, saying the prime rate of local lenders still has room to drop in anticipation of the rate cuts by foreign central banks.

He also dismissed the news reports that the mainland regulator has turned down the company's A-shares listing plan.

Commenting on the mainland property market, Cheng Yu-tung noted that the central government's relaxing monetary policy helps revive the market as well as stimulate Hong Kong-listed mainland property stocks, adding the company will keep an eye on the north to seize any new business opportunity that fits its strategy.

New World China, the group's mainland property arm, expressed interest in tapping the A-share market via participating in the restructuring of Shenzhen-listed Stellar Megaunion Corp.

Separately, Cheng Yu-tung said that the local equity market is unlikely to see a downswing in the near future because the market is about to hit the bottom.

He predicted that mainland infrastructure stocks will outperform the market due to the central government's stimulus package.

However, the tycoon said he has no intention to underweight those kinds of stocks in the short run, nor does he plan to tap the IPO market amid the stock market slump.

In the same meeting, New World Development executive director Adrian Cheng said that the group's investment vehicle New World Strategic Investment is seeking to explore the alternative energy territory, such as the solar power-generation parts business.

He added that the company will strive to increase its exposure to the retail sector in the first two quarters of next year.

(HK Edition 12/03/2008 page2)