Margin borrowing in Taiwan hits 160%, the highest since the dot-com era, as retail investors drive a 100% market surge in a year.
Taiwan’s stock market has surged 100% over the past year, fueled by a retail trading frenzy and record leverage. Margin borrowing has reached 160%, the highest level since the dot-com boom, as investors like 26-year-old Andy Cheng bet heavily on tech stocks with borrowed funds.
Brokerages have hit internal margin limits, forcing traders to turn to banks for additional collateral. Regulators claim leverage remains controlled, but analysts, including Goldman Sachs, predict further gains, despite warnings of overheating. Korea’s market fell 10% today, echoing concerns of a broader pullback.
The rally has drawn comparisons to the dot-com bubble, though investors argue this time is different due to underlying fundamentals. Still, the surge in speculative activity raises risks of a sharp correction if sentiment shifts.