A Bloomberg report reveals a frenzy of borrowing to buy stocks in Taiwan. The benchmark index has more than doubled over the past year, making Taiwan the world's fifth-largest equity market. Margin debt surged 160% in 12 months, approaching levels seen before the 2000 dot-com crash. A 26-year-old unemployed man surnamed Zheng borrowed about $60,000 to buy tech stocks. Even after a 3.5% drop, he said: 'Any stock I buy will make money.'
Margin growth outpaces Korea, central government bond auction fails
Taiwan's margin debt growth far exceeded the 50% peak during the dot-com bubble and South Korea's 94% increase. The borrowing spree even affected the central bank's bond auction: on June 3, a government bond sale failed due to lack of buyers, the first ever in Taiwan.
Influencer Banini breaks her rule, borrows NT$5 million
Banini, a popular finance content creator, told Bloomberg she broke her long-standing no-leverage rule in May. 'FOMO really defeated me,' she said. Watching friends make far more money, she borrowed NT$5 million to enter the market, convincing herself: 'Better to chase than let the opportunity slip.' Her capitulation signals a collective erosion of caution.
Defaults hit record high, brokers quietly tighten terms
In June, Taiwan's stock trading defaults exceeded NT$2 billion, more than doubling month-on-month and setting a record high since data collection began. Brokers themselves are borrowing heavily, issuing nearly $1.2 billion in bonds this year, seven times the 2025 total. Some have turned to syndicated loans. Several brokers have quietly tightened: margin lending rates rose by at least 0.2 percentage points, while stock-backed loan rates surged up to 1 percentage point (against a 2% central bank benchmark). KGI Securities adjusted and then reversed leverage ratios; Fubon Securities revised rates and collateral ratios; SinoPac Securities reviews positions daily; Cathay Securities set loan caps on high-risk stocks; Yuanta Securities declined to comment.
Academics warn of bubble, retail investors say 'this time is different'
National Central University professor Wu Daren called the market overheated and warned of devastating losses for young investors. Alicia Garcia of Natixis cautioned that fading AI momentum could hit brokerages, consumption and exports. But Zheng, the unemployed young man, dismissed such warnings, citing TSMC's dominance of 90% of the world's most advanced chips. His friend, a law student, noted tech stocks account for 80% of the index. 'Even if it falls for a month, no worries. Taiwan is great.' The island's collective 'this time is different' narrative leaves the outcome uncertain.