Taiwan Stocks Show Both Sides Bet They’ll Win Weekend Election

(Bloomberg) -- Voters on both sides of Taiwan’s political divide seem to be betting their favored candidates will win this weekend’s election, with stocks seen as beneficiaries of the rival policies all rising in the last day of trade before tomorrow’s poll.

Taiwan’s Taiex rose 0.5% to the highest close in a week. The Taiex Biotechnology and Medical Care Industry Index ended up 0.8%, among the top performing sectors Friday, as traders bet pharmaceutical companies will continue to benefit from President Tsai Ing-wen’s efforts to boost the industry.

Stocks have risen to the highest level in nearly three decades in the past month, helped in part by the island’s resilience in the face of the U.S.-China trade war.

Wind energy stocks such as Century Iron & Steel Industrial Co. and Hsin Kuang Steel Co. also rose over 1.4%, as Tsai’s Democratic Progressive Party government aims to develop green energy.

Some investors are also betting closer ties with China would boost Taiwan’s tourism industry, if challenger Han Kuo-yu of the more China-friendly Kuomintang wins. The Taiex Tourism Index rose 0.9% to the highest close since last August.

Stocks related to Kaohsiung city also surged, with Taroko jumping by the 10% daily limit and Hotel Holiday Garden gaining 4%. Both companies have mall or hotel operations in the southern Taiwan city, where Han is mayor.

“If Tsai wins the election, the market may not move much next Monday as her policies will remain and positives have been mostly reflected,” says Kidd Tu, manager at E Sun Securities. “If Han wins, however, we may see a bigger reaction, especially in tourism stocks or Kaohsiung-concept stocks” as it’s unexpected.

To contact the reporter on this story: Cindy Wang in Taipei at hwang61@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Adrian Kennedy, David Watkins

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