Shares climb on bets Ma will be cleared of charges

Domestic stocks yesterday rose on speculation that Chinese Nationalist Party (KMT) presidential candidate Ma Ying-jeou (馬英九) would be cleared of corruption charges today, enabling him to run for office.

More than nine times as many stocks gained as fell, with Hon Hai Precision Industry Co (鴻海精密) and chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) out front. The Taiwan High Court will rule on charges against Ma at 10am today, senior Judge Wen Yau-yuan (溫耀源) said.

"Investors are showing their confidence in Ma winning in court," said Phil Chen, who manages US$154 million at Grand Cathay Securities Investment Trust Co (大華投信) in Taipei.

"A favorable ruling will remove a major political uncertainty, allowing investors to buy stocks according to their earnings potential." he said.

The benchmark TAIEX climbed 157.33, or 1.9 percent, to close at 8,313.72 in Taipei. The measure has risen 6.3 percent this year, on course for a fifth annual increase. Futures due next month added 1.7 percent to 8,322.

Hon Hai, the nation's biggest electronics company, gained NT$4, or 2 percent, to NT$200. TSMC, the world's biggest supplier of made-to-order chips, climbed NT$2.20, or 3.7 percent, to NT$61.70. Formosa Plastics Corp (台塑), the world's second-largest maker of polyvinyl chloride advanced NT$1.90, or 2.1 percent, to NT$90.90.

Should Ma be found guilty and sentenced to 10 or more years in prison, he would be disqualified as a candidate.

Ma is charged with misusing NT$11.2 million (US$344,000) of city funds while he was mayor of Taipei. He has pledged to focus on the economy and improve ties with China if elected.

The Taipei District Court cleared Ma of all charges on Aug. 14. Prosecutors appealed the decision and could do so again after today's ruling.

Ma leads ruling Democratic Progressive Party presidential candidate Frank Hsieh (謝長廷) by 23 percentage points, according to a poll by cable station TVBS published on Sept. 19.

Yuanta Financial Holding Co (元大金控), the largest local brokerage company, climbed NT$0.90 or 4.6 percent, to NT$20.40. Formosa Petrochemical Corp (台塑石化), the nation's largest oil refiner by market value, rose NT$2.30, or 2.5 percent, to NT$96.30.

MediaTek Inc (聯發科), the world's largest supplier of chips for DVD players, climbed NT$7, or 1.8 percent, to NT$400.50.

Andrew Lu (陸行之), an analyst at Citigroup Inc, reiterated his "buy'' recommendation for MediaTek, the world's largest supplier of chips for DVD players, with a price target of NT$675 in a report released yesterday.