Taiwan fund expects 25% returns in S.E.Asia

Taiwan fund expects 25% returns in S.E.Asia

TAIPEI (Reuters): Taiwan's China Development Corp said yesterday it and other backers of a T$20 billion private Southeast Asia Fund expect 25 percent annual returns from their investments in the financially battered region.

"We are looking at very profitable opportunities there," China Development president Benny Hu told reporters.

"We can expect 25 percent annual returns from the investments," Hu said.

China Development, a leading Taiwan venture capital and investment firm, is at the forefront of a government-inspired drive whereby Taiwan will lend a helping hand to the battered region through private investments and possible state aid.

Taiwan has used the drive as a means of defying a diplomatic embargo enforced by arch rival China, which has warned southeast Asia not allow to the wealthy Nationalist-ruled island to exploit their difficulties for its own political gain.

Several high-profile Taiwan companies have committed to joining the T$20 billion (US$620 million) Southeast Asia Fund, which was announced in recent weeks.

Hu said a holding company for the fund would be set up within three months.

Hu said the private fund would invest 70 percent in listed stocks in southeast Asia, with the remaining 30 percent slated for unlisted companies.

Hu played down local media reports that the fund had decided to invest US$100 million in Malaysian stocks, saying actual investment in Malaysia could be "far more" than that.

"I don't know where this magic number came from. We have not made any decision since we are still in the process of forming the holding company," Hu said.

"Actually we could invest far more than US$100 million in Malaysia stocks." Hu said Malaysia and Thailand looked especially promising.

"Thailand and Malaysia have a lot of opportunities. We need to grasp these opportunities," he added.