TAIPEI (XFN-ASIA) - Share prices are expected to open sharply higher with
investors welcoming the election victory of Ma Ying-jeou, the opposition
presidential candidate who promised to improve ties with Beijing, dealers said.
Worries over China's response to the polls are also expected to ease after
two referendums on joining the United Nations did not achieve the required
turnout.
The Kuomintang party's Ma won 58.45 pct of the vote on Saturday, against
41.55 pct for Frank Hsieh of the ruling Democratic Progressive Party.
Ma is due to take office on May 20 as President Chen Shui-bian steps down
after serving the maximum two terms.
Less than 36 percent of voters cast their ballots in the accompanying
referendums, well below the minimum requirement of 50 pct.
Taiwan lost its UN seat to China in 1971.
On Friday, the weighted index closed up 187.37 points or 2.25 pct at
8,524.99, after moving in a range between 8,412.52 and 8,539.91.
Foreign investors were net buyers of shares worth 25.25 bln twd, local
investment trusts were net buyers of shares worth 3.95 bln twd, and brokers were
net buyers of shares worth 2.55 bln twd.
Michael On, president of Beyond, said the election results went according to
expectations and the local bourse could be poised for upswing for perhaps a few
days in a row.
"There are expectations of economic benefits from the easing of restrictions
on tourism and transport links across the Taiwan Strait," On said.
Following the landside victory, Ma told reporters that his priorities
include allowing more China tourists to visit Taiwan and enhancing air links.
The president-elect will initially push for weekend charter flights between
the mainland and Taiwan before the introduction of scheduled direct air links.
Beyond's On said transport firms, property developers and financial
companies with a China presence could be the major beneficiaries of the
post-election rally.
However, profit-taking could emerge soon as the economy still faces
challenges, while China still has to agree to any deregulation proposed by
Taiwan, he said.
Alex Huang, an assistant vice president at Mega International Investment
Services, expects the post-election rally to run for one or two days before the
market consolidates upward.
"Removal of political uncertainty after the election will be sufficient to
boost sentiment," he said.
"Ma's victory raises market expectations of policy adjustments to enhance
economic development as he has provided a direction for the removal of
restrictions, particular in cross-strait ties."
The political developments point to foreign capital inflow as well as the
return of local funds to the market, he said.
"Taiwan entities are expected to remit 70 bln usd a year back to home for
investment," he added.
Huang said tourism, transport, construction, retailers and asset plays could
be the major beneficiaries in the next few days, although this lead may have at
least been partly factored into prices.
In the medium-term, liquid crystal display panel makers, integrated circuits
design houses, light-emitting diode firms, and financials could attract laggard
buying, Huang said.
adela.lin@afxasia.com
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xfnal/xfntm
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