Taipei, July 3, 2009 (CENS)--Taiwan Ratings Corp. (TRC) recently rated `twAAf` for the fixed-income fund issued by Shin Kong Chi-Li Fund, with such rating reflecting the following strengths:

--Good credit quality: Shin Kong Chi-Li Fund`s assets totaled NT$5.1 billion as of June 25, 2009, comprising repurchase agreements (repos, 61.3%), and bank deposits (38.7%). The credit quality of the fund`s repo counterparties and their collaterals are generally satisfactory. The credit quality of its term deposits ranges from satisfactory to strong with most rated `twA` or above.

--Very strong liquidity position and very short maturity profile: The fund has very strong liquidity and did not hold any bond investments as of June 25, 2009. At the same time, the fund`s weighted average maturity was about 0.16 years, which is very short.

These strengths are partly offset by the following weakness:
--Industry risks: Taiwan`s fixed-income fund market is highly volatile, with the total fund size peaking at NT$2.4 trillion at the end of May 2004 and bottoming at NT$687 billion at the end of October 2008. Volatility has fallen from previous highs as most bond funds have transformed into quasi-money funds that possess higher liquidity. Nonetheless, the fixed-income fund market remains sensitive to short-term interest rate movements and adverse events.

At present, Shin Kong Investment Trust Co. (SKIT) manages Shin Kong Chi-Li Fund. The SKIT is wholly owned by the Shin Kong Financial Holding Co., which has a strong presence in Taiwan`s life insurance industry. At the end of May 2009, SKIT`s total funds totaled NT$32.4 billion, or 1.65% share of domestic mutual fund market.


(by Ben Shen)