SOURCE: The Taiwan Greater China Fund

December 13, 2007 17:06 ET

The Taiwan Greater China Fund's November 2007 Monthly Update

NEW YORK, NY--(Marketwire - December 13, 2007) - The Taiwan Greater China Fund's (NYSE: TFC) net asset value (NAV) in November matched the performance of its primary benchmark, the Taiwan China Strategy Index (TCS Index) as computed by MSCI, but underperformed the total return in US$ terms of Taiwan Stock Exchange Index (TAIEX). The Fund's share price during the month underperformed both the TCS Index and the TAIEX in US$ terms as the discount widened. The Fund's NAV decreased 13.5% while its share price decreased by 15.0%, compared to a 13.5% decrease in the TCS Index and an 11.2% decrease in US$ terms of the TAIEX. The Fund's discount to net asset value averaged 12.6% during November, with a low of 9.2%, a high of 15.2%, and a closing value of 11.1%. During the month, the Taiwan dollar appreciated 0.4% against the U.S. dollar.

A combination of worries about the impact of the sub-prime crisis on the U.S. economy and nervousness about inflation in both Taiwan and China led to one of the largest monthly declines in the TAIEX in nearly 5 years, falling by 11.2% in US$ terms. The Shanghai Shenzhen 300 Index declined 15.83% in US$ terms in November. Inflation in Taiwan rose to a 13-year high with consumer prices rising 5.33% in October from a year earlier, primarily due to food and energy price increases. Consumer prices rose in China by 6.5%, the highest in 11 years. Despite the inflationary pressures, Taiwan's economy remains strong. GDP grew 6.92% in the 3rd quarter over the prior year, the fastest pace in three years, and the government has raised its full year forecast to 5.46%, up from 4.58%. Exports in October grew by 14.4%, while sales to China and Hong Kong were up 17.3%. Exports orders, indicating shipments over the next 1-3 months, are up 18% over a year ago.

Total Return         1 Month  3 Months  6 Months   YTD   1 Year   3 Years
------------         -------  --------  --------  -----  ------   -------
Fund (NAV) **         -13.5%     -1.8%     12.8%  14.7%   17.4%     61.6%
Fund (US$ Share
 Price)               -15.0      -0.6      11.8    9.1    12.5      59.5
Taiwan China Strategy
 Index                -13.5      -0.9      13.6   15.8    18.7      66.6
TAIEX (US$)           -11.2      -2.0      11.5   14.6    17.9      63.3
NT$/US$                 0.4       2.3       2.3    1.0     0.5      -0.2

Past results are not necessarily indicative of future performance of the Fund. Rates of return and principal value will fluctuate and you may have a gain or a loss when you sell shares. Performance figures reflect reinvested dividends and capital gains. Dividends and capital gains reinvested are on a net basis, after the deduction of applicable taxes. The returns shown above for the TCS Index are also calculated on a net basis but the TAIEX is measured on a gross return basis, with the full reinvestment of all dividends received. February 27, 2004 is a significant date for measurement as it is when the Fund fully implemented its China-focused investment strategy. Returns for the Fund, TCS Index and TAIEX are in US Dollars. Source: Bloomberg except MSCI for TCS Index. For more information and important disclosures on the TCS Index please see the Fund's website at Returns, except 12-month period, are not annualized.

** Total returns reflect changes in NAV per share during each period and assume that dividends and capital gains distributions, if any, were reinvested. These percentages are not an indication of the performance of a shareholder's investment in the Fund based on market price

Portfolio Management

The Fund holds about 100% of its assets in equities. Such holdings are well diversified among top quality stocks, with investment decisions based on a fundamental approach to securities and economic analysis. Portfolio holdings and sector composition are subject to change.

Top Ten Holdings as of                Industry Diversification as of
 November 30, 2007                     November 30, 2007

                           % of Net                                % of Net
Company                     Assets    Ten Largest Sectors           Assets
-------                    --------   -------------------          --------
Hon Hai Precision Ind. Co.    9.3%    Computer Systems & Hardware    18.4%
Nan Ya Plastic Corp.          8.0     Semiconductors                 16.7
Mediatek Inc.                 5.9     Plastics & Petrochemicals      13.3
Asustek Computer              5.4     Electronic Components          12.9
China Steel Corp.             5.0     Flat Panel Displays             9.1
Taiwan Semiconductor Mfg. Co. 4.8     Computer Peripherals/ODM        5.8
AU Optronics Corp             4.2     Steel                           5.0
Delta Electronics             3.7     Foods                           4.3
Formosa Chemical Fiber Corp.  2.9     Cement                          3.7
Foxconn Technology Corp.      2.7     Rubber                          1.6

Per Share Standing at November 30, 2007:
-----   -----
$8.11   $7.21

The opinions and forecasts expressed are those of the portfolio manager and may not actually come to pass. The information presented is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of a particular security. Fund shares are not FDIC insured and are not deposits or other obligations of, or guaranteed by, any bank. Fund shares involve investment risk, including possible loss of principal.

Contact Information

  • The Taiwan Greater China Fund

    Portfolio Management:
    Steven R. Champion, President
    Rm. 1001, 10F, 205 DunHua N. Road
    Taipei, Taiwan, R.O.C.
    Tel: 886-2-2715-2988

    Shareholder Services:
    Patricia Baronowski
    The Altman Group
    New York, NY 10165
    Tel: 1-212-681-9600