Chunghwa Post to invest NT$10 billion in overseas bonds next year

Dec 08, 2003 Ι Industry In-Focus Ι Furniture Ι By Ben, CENS
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Taipei, Dec. 8, 2003 (CENS)--To increase investment channels, Chunghwa Post Co., Ltd. Will invest NT$10 billion (US$294.11 million at US$1:NT$34) in foreign government bonds and corporate bonds and will consign a foreign asset management company to carry out the investment project next year.

Chunghwa Post, converted from the Directorates General of Posts under the Ministry of Transportation and Communications, is now studying the nature of foreign government bonds and corporate bonds. It hopes to publicly select a world renowned asset management company at the beginning of next year.

Hsu Jen-shou, president of Chunghwa Post, said the NT$10 billion (US$294.11 million) fund to be funneled into foreign bond market would come from the company's simple life insurance premiums. The overseas investment project still needs the approval of the Central Bank of China. If everything goes smoothly, the company is expected to carry out the overseas investment project in the first quarter of next year at the earliest.

The company will also set aside NT$15 billion (US$441.17 million) to invest in the domestic bourse by commissioning a domestic securities company to be singled out by the company by the end of this year.

In the past, the company consigned specialized financial institutions to handle stock investment for two years. This time, the company will extend the duration to three years, hoping that the commissioned companies will fully fulfill their performance in the longer investment duration.

At present, Chunghwa Post has NT$300 billion (US$8.82 billion) fund available for investment in the stock market. Of this, the company handles NT$150 billion (US$4.41 billion) by itself and consigns NT$30 billion (US$882.35 million) to some specialized financial institutions. Accordingly, the company still has NT$120 billion (US$3.52 billion) in hand for investment in the domestic bourse.

The company said it would select a domestic securities investment trust company to handle domestic stock investment, particularly in the most profitable listed companies of each industrial categories.

Chunghwa anticipated it would score total gains of more than NT$15 billion (US$441.17 million) from investment in the domestic stock market this year if the domestic stock market remains bullish in December.

Thanks to the surge of the domestic stock market, Chunghwa has earned NT$10.5 billion (US$308.82 million) from its self-handled NT$150 billion (US$4.41 billion) stock investment, representing a 7% return on investment, so far this year. The company also saw a 4% return by scoring a gain of NT$1.2 billion (US$35.29 million) from the NT$30 billion (US$882.35 million) stock investment handled by commissioned domestic securities investment trust companies.
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