Taipei: Taiwan's government, with stakes in companies from China Steel to Land Bank of Taiwan, said it's considering setting up a state investment firm similar to Singapore's Temasek Holdings to manage the island's assets.

A group of academics and experts was asked to submit a proposal by the end of this year on setting up a committee or investment company to manage resources and boost returns, Finance Minister Lee Sush-der said in an interview.

Countries from Norway to Singapore have set up state funds to manage their wealth. Sovereign funds' assets globally rose nine per cent to $3.5 trillion (Dh13 trillion) in 2009, London-based research firm Preqin said in March.

Temasek, founded in 1974 to foster Singapore's banks, airlines and ports, remains the biggest holder in six of its 10 biggest firms by market value.

The ruling Kuomintang party in December 2009 approved a plan to dispose of assets accumulated over its years in power.

The KMT in June sought bids for Central Investment Holding, which has stakes in companies and land and had a net worth of at the time of about NT$20 billion ($629 million), said Chen Shu-rong, a spokeswoman for the party.

Former President Chen Shui-bian in 2003 introduced curbs on government and political party ownership of the media companies, to force the KMT to relinquish its interests in these companies.

The Taiwanese entity won't use foreign currency reserves, which are controlled by the central bank, for investments, Lee said. The island's foreign exchange holdings reached $362 billion by the end of June.

Climb in assets

Taiwan's finance ministry is studying the possibility of setting up a state-owned holding company, the Economic Daily News reported yesterday, without saying where it got the information.

Temasek, which owns shares in Singapore's biggest bank and its largest telephone company, said assets climbed 43 per cent to S$186 billion ($137 billion) in the year to March 31.

China Investment, the mainland's sovereign wealth fund, posted an 11.7 per cent return on its overseas portfolio in 2009.