Taipei shares lose steam on profit-taking after Ma ruling

Share prices were little changed in late morning trade, off early highs, as profit-taking set in shortly after opposition leader Ma Ying-jeou won another court victory that effectively dispelled worries that he could be prevented from running for president in the March election, dealers said.

Taiwan's High Court cleared Ma, the Kuomintang candidate, of corruption charges, upholding the ruling of a lower court made in August.

At 11.27 am, the weighted index was down 11.64 points or 0.14 pct at 8,302.08, off a low of 8,269.32 and a high of 8,460.18, on turnover of 71.87 bln twd.

"Those who had got on the wagon early have now decided to get off," Polaris Securities vice president Hu Manling said, referring to investors who had bet heavily on a favorable verdict for Ma.

The market has bounced off last Friday's low of just above 7,800, she noted.

Hu said people refrained from chasing shares even higher since too many uncertainties lie ahead.

These include the fallout from the US subprime turmoil, the impact of China's tighter labor regulations on the costs of Taiwanese manufacturers with plants on the mainland, and the requirement for local IT companies to expense their employee bonuses from 2008.

In addition, further political bickering is inevitable in the run-up to the island's presidential poll in March, she added.

Even so, the market could enjoy some sort of "January effect" as foreign investors return from their holidays.

Yesterday's more than 8 bln twd of net purchases by foreign investors reflect growing confidence in a market that is increasingly perceived as undervalued, she said.

Taiwan Semiconductor Manufacturing Co, whose share repurchase program does not end until Jan 13, was down 0.70 twd at 61.00.

MediaTek was down 8.50 twd or 2.12 pct at 392.00 after it decided to fix employee bonuses at 25 pct of its net profit from 2008.

LCD makers were mostly higher, with AU Optronics up 1.10 twd at 61.50 and Chi Mei up 0.25 at 44.20.

Taishin Financial was down 0.25 twd at 13.05 and Chang Hwa Bank fell 0.05 to 17.20 as investors digested Taishin's proposed 1.3-for-1 share swap with the bank.

Evergreen Marine was up 0.25 twd at 28.15 on a report that it expects improved profits in 2008 for the container shipping industry as excess capacity becomes less of a problem.

(1 usd = 32.50 twd)