Overview
- Taiwan’s market has more than doubled over the past year and recently climbed past the U.K., Canada and India to rank among the world’s five largest equity markets.
- A retail frenzy for chip and AI-linked stocks has driven trading spikes, with teenagers opening accounts and brokers’ websites crashing under volume.
- Much of the rally has been financed with cheap borrowed money, and many brokerages have reached internal margin and loan limits that forced them to demand more collateral and raise rates.
- Some investors rebuffed by brokers are turning to banks for new loans, and the borrowing binge has strained market plumbing enough that a central bank debt auction failed to attract enough buyers, raising alarms about overheating.
- Economists warn a sharp correction would disproportionately harm young, heavily leveraged investors and could prompt regulators to tighten lending rules or market controls to protect financial stability.