Will Taiwan's Stock Market Follow South Korea's Path? Financial Expert Warns: 'Warning Lines Broken' in These Sectors — Government Still Says 'No Problem'

Taiwan's stock market has recently suffered continuous heavy declines, but on July 31, it strongly rebounded and hit the upper limit, with the weighted index surging 3,186 points—the largest single-day gain in history. Regarding the recent extreme volatility in Taiwan's stock market, Chu Yueh-chung, Assistant Professor in the Department of Financial Management at Nanhua University of Science and Technology, appeared on the program 'Financial Life Express' and stated that South Korea has already demonstrated the consequences of such wild swings in stock prices. Although many in Taiwan share similar concerns, has the government proposed any countermeasures?

Chu explained that the government claims the overall margin maintenance ratio remains high and urges the public not to panic. However, he criticized that the government calculates this ratio on a consolidated household basis—how accurate can such figures be? If the margin maintenance ratio is calculated solely for margin trading, it is already approaching 130%, the margin call warning level. When focusing specifically on passive components, the ratio has already fallen below 130%, meaning 'many investors have already received margin calls.'

Chu emphasized that popular investment targets such as Co-Packaged Optics (CPO) and narrow boards have long seen their margin maintenance ratios fall below 130%—this is the real issue. Yet, the government continues to promote financial market stability using aggregate data and dismisses warnings as alarmist, which Chu criticized as spreading misleading information by presenting an inaccurate picture of safety.

He challenged the government: 'If a crisis occurs, will you take responsibility?' The South Korean stock market crash has already escalated into a political crisis—does Taiwan want to follow the same path? While the worst phase of Taiwan's market crisis may be over, continued volatility is expected, meaning August will not be calm. Optimistically, market turbulence might subside by the end of August or early September. In the worst-case scenario, instability could persist into October.