Top Biz News
Buy Taiwan stocks with cross-Straits ties
(Agencies)
Updated: 2010-03-11 11:54
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Investors should buy shares of Taiwan companies that benefit most from the island's closer ties with the mainland, according to the manager of Taiwan's best-performing equities fund.
Investment interest in the economic integration with the mainland "will increase," said Steve Champion, whose $80 million Taiwan Greater China Fund's 94 percent return in the past year was the best among 231 funds investing in Taiwan stocks. "This process has the potential to increase the demand for many Taiwan equities and provide a major upside surprise."
Cheng Shin Rubber Industry Co, Giant Manufacturing Co, Taiwan Cement Corp, Hon Hai Precision Industry Co and Acer Inc will gain from the improving ties because of their operations on the mainland and their valuations, he said. Hon Hai, the world's largest contract maker of electronics, is the biggest holding in his fund, data compiled by Bloomberg showed.
The mainland plans to sign an economic accord this year with Taiwan to promote trade and investment across the Strait, Premier Wen Jiabao said in his annual speech to the National People's Congress in Beijing on March 5.
Taiex outlook
The Taiwan fund, managed from Champion's Nanking Road Capital Management's office in Hartford, Connecticut, beat the 68 percent advance in the Taiex index in the past year. The benchmark measure may surpass the 2007 high of 9,860 in the next one year, said the fund manager, who spent 14 years living in Taiwan. The Taiex rose 8.49, or 0.1 percent, to 7,779.08 at the close, a six-week high.
"The economic integration between Taiwan and the mainland is one of the great macro stories in the world today," Champion, 64, said in an e-mailed reply to queries. "I think it's a great time for long-term investors to invest in Taiwan."
Champion said corporate earnings in Taiwan may increase 75 percent to 80 percent this year, based on general market expectations.
