Discover the mysterious power of the East? Bloomberg interviews “Ba Nini” on the reversal issue: it’s really impossible not to break the rules—borrowing 5 million out of FOMO to trade Taiwan stocks, with the entire island of Taiwan going wild for loan money to invest in stocks

Bloomberg's latest report reveals: Taiwan is staging a nationwide frenzy of borrowing to speculate on stocks. Driven by the AI chip boom, the Taiwan stock market has surged over 100% in the past year, ranking as the fifth-largest stock market globally. Margin debt has skyrocketed by 160% in a year, approaching the historic high before the 2000 internet bubble burst.
(Background summary: TSMC is pushing forward with CoPoS packaging materials to mass produce by 2028! TrendForce: Taiwan panel manufacturers are competing for the FOPLP glass substrate market opportunity.)
(Additional background: Will the token subsidy war fizzle out? Google Ventures founder warns: If AI prices drop, business models will collapse entirely.)

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• Taiwan stocks double in a year, fifth-largest market value worldwide
• Internet celebrity Banini also breaks her long-held restraint
• Default amounts hit record highs, brokerages quietly start to slow down
• Scholars warn of a bubble, but retail investors say "this time is different"

Bloomberg today published a recent report exposing the background of the stock market frenzy, highlighting the prosperity and risks of massive retail borrowing to leverage. An interviewee, 26-year-old Zheng, said he just lost his job and is holding borrowed funds to buy Taiwanese tech stocks worth about $60,000. That day, the Taiwan stock index fell 3.5%, but he was unbothered, instead eyes shining as he said, "Any stock I buy will make money."… This scene is a microcosm of the current Taiwan stock market frenzy.

Taiwan stocks double in a year, fifth-largest market value worldwide

Bloomberg points out that the AI boom has swept through multiple global stock markets—South Korea, China, the U.S.—and Taiwan, the world's leading producer of advanced chips, is no exception. You’ve probably seen many social media posts recently, with some people wanting to quit their jobs to focus on stock trading.

Over the past year, the Taiwan Weighted Index has gained more than 100%, with its market capitalization surpassing those of the UK, Canada, and India within just a few weeks, ranking as the fifth-largest globally. Teenagers are rushing to open accounts, and trading volumes have surged so much that broker websites have crashed. Behind all this, there is a common fuel: borrowing money.

Bloomberg reports that the margin loan balance of Taiwanese investors borrowing from brokerages to buy stocks has surged 160% over the past 12 months, nearing the historic high before the 2000 internet bubble burst. In comparison, the last 12 months of the bubble’s final phase saw only a 50% increase; even South Korea, also hot on AI themes, has only increased by 94% recently. Taiwan’s leverage madness has reached a new level.

The borrowing craze has spread so widely that it has even affected government bond auctions. On June 3, a bond auction failed due to insufficient buyers, marking the first time in Taiwan’s history.

Internet celebrity Banini also breaks her long-standing restraint

In this Bloomberg interview, surprisingly, the anti-indicator goddess Banini also shared her comments. She said that in May this year, she broke her vow and abandoned her principle of not leveraging.

“FOMO really defeated me,” Banini said. She watched Taiwan stocks climb day by day, with friends earning much more than her. Ultimately, she succumbed to temptation and took out a loan of 5 million New Taiwan Dollars to enter the market. “Rather than letting the opportunity slip away, I’d rather chase it,” she convinced herself.

Banini is a financial content creator with a large fan base. Her breaking her vow also hints at a collective psychological breakdown: When cautious people start borrowing to chase gains, how much rationality is left in this frenzy?

Default amounts hit record highs, brokerages quietly start to slow down

Beneath this frenzy, cracks may already be quietly appearing. Bloomberg reports that in June, Taiwanese investors’ default amounts from stock trading exceeded NT$2 billion, more than doubling month-over-month, and setting a monthly record since 2019.

To cope with the crazy borrowing demand, Taiwanese brokerages have also begun to raise capital through large-scale bond issuance. Bloomberg data shows that this year, brokerages have issued nearly $1.2 billion in bonds, more than seven times the total for 2025; some firms have even turned to syndicated loans and other non-traditional financing channels, with unprecedented transaction speeds this year.

Some brokerages have started to tighten their policies quietly. Industry insiders reveal that margin interest rates have been raised by over 0.2 percentage points, and for loans secured by stocks and ETFs with no specified purpose, interest rate hikes have reached as high as 1 percentage point. In an environment where the central bank’s benchmark rate is only 2%, this increase is significant.

KGI Securities (Taiwan’s second-largest local brokerage) said it continues to monitor margin trading activities, and earlier this month, it slightly lowered leverage ratios for some stocks but then adjusted them back. Fubon Securities (third largest) has adjusted margin interest rates and collateral ratios for some stocks. E.SUN Securities (fourth largest) reviews overall capital positions daily. Cathay Securities (fifth largest) has set limits on unsecured loans for certain high-risk stocks. Yuanta Securities (the largest) declined to comment.

Scholars warn of a bubble, but retail investors say "this time is different"

Professor Wu Daren from National Central University’s Department of Economics bluntly states: “Taiwan’s stock market is obviously overheated.” He worries that if a rapid, large-scale sell-off occurs, young investors who see stocks as an “easy way to get rich” could suffer “catastrophic losses.” He urges the government to take concrete measures to cool the market and prevent the bubble from inflating further.

AEPAC chief economist Acia Garcia warns from a macro perspective: “If the AI momentum wanes, the impact won’t stop at the stock market. Brokerages will face pressure, household consumption will shrink, and exports will drag down overall growth.”

However, unemployed youth Zheng dismisses these warnings. He has studied the history of the 1990s internet bubble but believes this time is different: “This time, there’s real support.” His logic is that TSMC and the entire chip supply chain’s global monopoly position, with Taiwan producing 90% of the world’s most advanced chips, and the explosive demand for AI data centers shows no signs of stopping.

His friend, 25-year-old law student Chen, also agrees: “Tech stocks account for about 20% of Taiwan’s GDP and make up 80% of the Taiwan stock index’s weight. The fundamentals are so strong that even if the market drops for a month, there’s no need to fear. Taiwan is great.”

As the whole island keeps saying “this time is different,” what will the future hold? Let’s keep watching.