Taiwan maintains its investment in SE Asia
Taiwan maintains its investment in SE Asia
TAIPEI (Dow Jones): China Development Corp. isn't backing down
from its investments in Southeast Asia but is keeping its focus
on targets in Thailand and Malaysia where markets appear to have
bottomed out, a top official from the company said yesterday.
Indonesia's latest crisis hasn't scared China Development, one
of Taiwan's largest and most well-known financial institutions,
from scouring the region for bargain companies, Benny Hu, the
company's president said in an interview with Dow Jones
Newswires.
Indonesia's limited affect on neighboring markets has made
China Development more comfortable with its strategy of targeting
Thailand and Malaysia where the company already has some
investments, Hu said.
The currencies "in Malaysia and Thailand weren't affected by
(Indonesia's) political turmoil," Hu said. "This seemed to
indicate each country was more independent. The Asian financial
crisis had less of a 'domino' effect."
"These last two weeks served as a test" to see whether
neighboring countries could withstand Indonesia's political
storm, Hu added.
China Development, one of the more outspoken Taiwanese
companies advocating Southeast Asian investment, has always been
slow on investing in Indonesia, Hu said.
The company's only Indonesian investment is a US$12 million
stake in PT Tamara Bank, accumulated over the past three years.
Provisions have already been made against losses from this
investment, Hu said.
About 11 percent of China Development's US$1 billion
investment portfolio is located offshore in Asia, Europe and the
U.S. Hu didn't have exact figures on how much of that 11 percent
is invested in Southeast Asia, though he said the percentage was
"small."
Still, China Development has been one of the more vocal of
Taiwanese companies aiming to grab large stakes in beleaguered
Southeast Asian companies. The company, which counts the ruling
Kuomintang Party as one of its major shareholders, is evaluating
financial companies, telecommunications operators and
agribusinesses in Thailand and Malaysia for acquisitions.
"We're putting the money...in several phases," Hu said. "We're
not putting it all in at one time. We don't worry too much about
the risks since we do our due diligence."
"The worst thing to do is do nothing," Hu added.
China Development Corp. is also leading the creation of an
investment company targeting Southeast Asia for sometime this
summer. The total capital of this company was recently raised to
NT$30 billion from NT$20 billion.
Though most of the attention these days has been focused on
the company's Southeast Asian push, executives at China
Development continue to concentrate on Taiwanese investments
which make up a large part of the portfolio.