'Mr. Taiwan' faces hard sell in Taipei
Bloomberg News Service
TAIPEI, Taiwan — Clad in a suit, arms crossed, Peter Kurz stared out at readers from the pages of Taiwan's evening newspapers in April. "Foreign investors listen to this man. Wouldn't you?" half-page color ads asked in Chinese.
That indeed is the question for this 43-year-old American whom the local media have dubbed "Mr. Taiwan."
Kurz, formerly head of research at Merrill Lynch & Co. in Taipei, is something of an investment guru on the island, where he's well-known for frequent television appearances and his Mandarin and Taiwanese language skills. Now he's trying to capitalize on his star status to promote his new investment business and an eight-month-old Web site, mrtaiwan.com.
Seated in his offices beneath two Chinese characters that mean "go with the flow," he described his goal: to become the "Starbucks of local investment advisory business" by catering to Taiwan's legions of small investors.
Since leaving Merrill more than a year ago, Kurz has spent $4 million to set up a corporate-research business, his Web site and an investment fund. He employs about 40 people in Taipei and operates a branch office in San Francisco. Now the question is whether his start-ups can survive in today's tough market.
Taiwan's key stock index, the TWSE Index, has slumped 42 percent from a year ago, and daily trading volume has fallen to NT$60 billion (US$1.7 billion) from NT$110.4 billion (US$3.2 billion) in the first three months of this year.
"I've had a few sleepless nights managing the company in the tough market environment," Kurz said. "In a down market, sales are small. We're concentrating on institutional clients."
Investors
Can Kurz really serve institutional and small investors at the same time? He's trying. Besides selling subscriptions to his Web site, he's pushing another online service: wireless-linked personal digital assistants that give investors a research terminal in their pockets. Made by Eten Information Systems Ltd., the assistants rent for NT$3,500 (US$870) a month, which includes access to stock picks, prices and charts.
On the face of it, the opportunities are large. Individual investors account for 80 percent of turnover on Taiwan's stock market, Asia's third largest by market value. Kurz says the 170 or so local and foreign securities companies haven't paid enough attention to these retail investors.
While basic access to Kurn's Web site is free, a "gold" subscription of NT$1,999 (US$290) a month gives entry to in-depth reports and more recommendations. "Platinum" members paying NT$8,888 (US$2,320) a month get unrestricted access to all of mrtaiwan.com's research.
In Chinese society, the number 8 symbolizes prosperity. That's still a way off for mrtaiwan.com. The site has lost money since it opened in October, though Kurz won't say how much.
Stock picks
And the top picks? Last week the site recommended Asustek Computer Inc., Taiwan's biggest motherboard maker, which rose 4.2 percent in five days, and Quanta Computer Inc., the biggest notebook computer maker on the island, which added 1.3 percent. Realtek Semiconductor Corp., a designer of integrated circuits, gained 0.6 percent. By contrast, Compeq Manufacturing Ltd., a printed circuit board maker, fell 6.6 percent. The TWSE Index rose 4.2 percent in the week.
A graduate of Dartmouth College and Columbia University, Kurz first came to Taiwan in 1980 to study. That year he also met his wife, who is Chinese. He returned in 1988 as country head at Baring Securities, now ING Barings, before moving to Merrill Lynch in 1997.
Kurz has consistently attracted attention. Institutional Investor magazine ranked him the No. 1 equity strategist in Taiwan in 1992, 1996 and 1998, and gave top spot to his research teams in 1994, 1996 and 2000.
"He brings intellectual passion and fervor to his investment research," said Matei Michalca, who was hired by Kurz as an analyst at Merrill Lynch in Taipei. "He's a role model for many of us in the industry."
Competition
Kurz is now competing against his former employers to sell corporate research to foreign institutional investors. He distributes his products to institutions through Capital Securities Corp., Taiwan's second-biggest broker by market share, and directly to 14 local institutions.
Getting institutional money managers to sign up will be a challenge. "We like to maintain our existing relationships," said Francis Wong, who helps manage about $600 million in Asian stocks at American Express Asset Management Ltd. in Hong Kong. "We don't change our broker list that much."
The third leg of his business is a company that runs an investment fund, though Kurz won't say how much the fund has under management or disclose its investment strategy.
He said there's no conflict between his role as a fund adviser and as an analyst who recommends stocks.
"I don't get involved in portfolio management decisions, Kurz said. "I leave that to a colleague in San Francisco."
