TAIPEI (XFN-ASIA) - Share prices were sharply higher on hopes for improved
economic ties with China after the opposition Kuomintang party's Ma Ying-jeou
won a landslide victory in the weekend presidential election.
Ma, who won 58.45 pct of the vote in Saturday's election against 41.55 pct
garnered by Frank Hsieh of the ruling Democratic Progressive Party, has promised
to work for direct transport links and increased tourist arrivals from the
mainland, among other things.
Dealers said China ties are also expected to get a boost after two
referendums on Taiwan returning to UN membership failed.
Ma will take office on May 20 when President Chen Shui-bian steps down after
serving two terms.
At 10.15 am, the weighted index was up 357.87 points or 4.20 pct at
8,882.86, off a high of 9,049.23 and low of 8,852.10.
Turnover was at 155.69 bln twd.
"Funds, including those parked inside and outside Taiwan, are waiting for an
opportunity to get on the (equity) bandwagon... anticipating a thaw in
longstanding tensions across the Taiwan Strait," said Michael Hsu, an assistant
vice president at Taiwan Life Asset Management.
He noted that financial, transport and tourism stocks as well as companies
having large real estate holdings will be in the spotlight as they are expected
to benefit most from improved economic ties with China.
But technology firms may remain less attractive until they release their
first-quarter results next month, he said, pointing to worries over possible
foreign exchange losses due to a stronger Taiwan dollar.
Hsu noted that the market came off its early highs as some investors locked
in quick profits.
Market players had anticipated Ma's Victory, he said, noting gains over two
days ahead of the election day.
Michael On, president of Beyond Asset Management Co, said the election
result in line with expectations and that the local bourse could be poised for
an upswing for a few days.
He said there are expectations that rules governing cross-strait tourism and
transport links will be eased.
Ma told reporters following his election victory that his priorities include
allowing more China tourists to visit Taiwan and enhancing air links.
The president-elect is expected to initially push for weekend charter
flights between the mainland and Taiwan before seeking direct scheduled air
links.
Alex Huang, an assistant vice president at Mega International Investment
Services, said the election has ended political uncertainty.
Ma's victory points to increased foreign capital inflows as well as the
return of local funds to the market, he said.
The construction sector was up 6.57 pct, financial sector was up 6.36 pct,
cement sector up 5.90 pct, transport up 5.28 pct and electronics up 4.81 pct.
Cathay Financial was limit-up 5.70 twd or 7 pct at 87.60.
Mega Financial was up 1.20 twd or 5 pct at 25.20, unaffected by news that
Chinatrust Financial is selling 100 mln shares of Mega. Chinatrust Financial was
up 2.00 twd or 6.66 pct at 32.05.
TSMC gained 4.00 twd or 6.17 pct to 68.80 and UMC added 0.85 twd or 4.90 pct
to 19.20.
Asia Cement was up 2.90 twd or 5.36 pct at 57.00 after proposing 2.4 twd per
share cash dividend plus a 6 pct stock dividend for 2007.
(1 usd = 30.50 twd)
philip.wang@afxasia.com
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