SNAP ANALYSIS: Billionaire seen winning Chile presidency run-off

SANTIAGO (Reuters) - A conservative billionaire was projected to take the most votes in Chile's presidential election on Sunday but fell short of an outright victory, setting up a run-off against the leftist coalition that has ruled for two decades.

Harvard-educated businessman Sebastian Pinera was winning almost 45 percent of the first round vote against 32 percent for the ruling center-left coalition's candidate, former president Eduardo Frei, the government said after counting around 12 percent of polling stations.

Out of a field of four candidates, none had more than 50 percent of votes, which means the top two go to a January 17 run-off, which Pinera is favored to win.

Here are some of the implications of Sunday's results:

WIDE MARGIN

* Economist and entrepreneur Pinera's wide victory margin is seen giving him an edge against Frei in January.

* It was the first time a right-wing candidate won more votes than a rival of the ruling center-left in the first round ballot since Chile returned to democracy in 1990 after General Augusto Pinochet's dictatorship ended.

* Frei will likely struggle to unite the splintered left.

* Third-placed independent candidate Marco Enriquez-Ominami, a former filmmaker and son of a guerrilla leader killed during the dictatorship, had about 20 percent of Sunday's vote according to the Radio Bio Bio projection.

* Enriquez-Ominami is a deciding factor in the next ballot but has so far rejected calls for a leftist pact to block Pinera.

* Pinera, who owns a television station and more than 25 percent of Chile's flagship airline LAN, would continue to distance himself from Pinochet's iron-fisted rule and appeal to more moderate, centrist voters.

* Some experts see his message that Chile needs a change after 20 years under the same center-left coalition resonating with Enriquez-Ominami's constituency.

MARKET REACTION

* Local stocks could get a boost from the first-round lead of market-favorite Pinera, a savvy investor who made his fortune introducing credit cards to Chile. Stocks rose across the board on Friday on expectation of a Pinera win.

* But a rally is seen as limited since Pinera is not expected to push major changes to prudent fiscal and economic policies that have made Chile's economy a model of stability.

* Both Pinera and Frei are seen as market friendly.

* Pinera vows to boost annual economic growth to 6 percent, create jobs with tax incentives and push ahead with infrastructure and energy projects. But his plan relies on foreign investment rebounding and an uninterrupted recovery from the first recession in a decade.

* Frei pledged to continue with President Michelle Bachelet's more state-oriented policies. He intends to deepen her welfare programs and rely on the state as the engine of growth, with the creation of more worker unions.

DIVIDED CONGRESS

* Whoever wins the run-off will likely face a closely divided Congress, forcing deals with the opposition on legislation.

* Exit polls saw the leftist parties, some part of the ruling coalition, winning a slight majority in both houses.

* The next president is expected to face some opposition from left-leaning unions and students and teachers, who often protest to pressure the government to pour more money into health, education and workers benefits.

* Protests could be a nuisance for the new government, but are not seen posing a risk to its ability to govern.

* Pinera's plan to sell up to 20 percent of state miner copper Codelco, the world's largest, is seen as a non-starter given resistance from the company's powerful unions and opposition in Congress.

(Reporting by Alonso Soto; Editing by Simon Gardner; Editing by Cynthia Osterman)