Fubon spots overseas investment opportunities

Despite weakening credit profile, the company to direct more funds into foreign investments with fixed incomes.

Fubon Financial Holding Co, the nation’s largest financial service provider by assets, aims to increase its stake in overseas fixed-income investments, unfazed by their weakening credit profile, as they promise higher yields, senior executives said on Thursday.

“We will channel more funds into overseas investments with fixed incomes,” attracted by their higher yields, Fubon Financial president Victor Kong told an investors conference.

To that end, the conglomerate has filed for regulatory approval for its plan to raise the ceiling on its overseas stakes to 45 percent of total investments, from 35.7 percent as of June 30, or NT$523.6 billion ($18.12 billion), Kong said.

US fixed income investments account for 39.9 percent of the life insurance subsidiary’s, Fubon Life Insurance Co., investment portfolio, Kong said.

Government bonds and Treasury bills make up 20.4 percent of the share, while mortgage-backed securities constitute another 31.9 percent, company data indicated.

“Taiwan has excessive savings and Fubon Life, as a long-term savings collector, has no choice but to seek investment instruments overseas because the domestic market is too small to absorb [idle] liquidity,” Kong said.

View the full story in Taipei Times.