HONG KONG: A growing number of Taiwan-based financial institutions are looking for ways to boost liquidity amid the economic crisis.

Leading financial firms are inviting investment directly or are listing their shares to try to raise capital.

Fubon Financial, Taiwan's leading financial holding firm, said yesterday it would welcome mainland investment up to a 20 percent stake in the company.

The firm also aims to raise its investment in Taiwan stocks and properties by NT$80 billion ($2.4 billion) in 2009, Richard Tsai, vice chairman of Fubon, was quoted by Taiwan media as saying.

Analysts predict Fubon's corporate peers are likely to have similar plans. The analysts anticipate more cross-Straits ventures and investment partnerships will be launched in the near future as authorities urge closer economic ties.

Fubon's announcement came less than two weeks after Taiwan Financial Holdings Co offered up to a 40 percent stake through an initial public offering.

Market watchers interpret the zeal among Taiwan companies as a potential invitation to mainland companies wishing to gain a foothold in the Taiwan market.

Beijing has outlined plans for encouraging mainland businesses to expand investments in Taiwan, and has scheduled several purchasing missions to buy food and consumer products.

Taiwan-funded companies, meanwhile, will be welcomed to expand their investments on the mainland.

Mega Financial Holding Co, Taiwan's biggest financial services company based on assets, said last month it plans to invest in smaller city banks on the mainland.

The Taipei-based company is targeting smaller city commercial banks and rural cooperatives in large cities such as Shanghai and Guangzhou, according to a Mega spokesman.

Taiwan's banks face a potential deterioration in asset quality as weak demand in the US and Europe hamper the ability of the island's exporters to repay debt, according to investment bank Goldman Sachs.

"As Taiwan is a highly export-dependent economy, we expect continuing weak end-customer demand will hurt corporate debt servicing capabilities," analysts at the firm said in a research note.

Separately, three major mainland shipping companies plan to invest in the biggest port in Kaohsiung, Reuters reported last month.

China COSCO, China Shipping Container Lines Co Ltd and China Merchants Group plan to invest in Kaohsiung port, the world's eighth largest in 2008.

(HK Edition 06/02/2009 page2)