Taiwan Stock Market Surges 1.24 Times in One Year, Institutions See 4 Major Tailwinds Challenging 40,000 Points

Central News Agency

(CNA, Taipei, 23rd) From a low of 17,306.97 points affected by reciprocal tariffs in April last year to a high of 38,921.95 points today, the Taiwan Stock Exchange (TAIEX) has surged by 21,614.98 points in one year, a spike of 1.24 times. Besides Taiwan's high-tech industry riding the wave of the Artificial Intelligence (AI) industry, the fueling of active ETFs and a flood of capital pouring into the capital market are major driving forces pushing the TAIEX to frequently hit new highs.

With TSMC continuing to hit a new record price of NT$2,135 today, the index surged by up to 1,043 points intra-day, pushing the TAIEX to a new historical high of 38,921.95 points. However, the rapid surge also triggered profit-taking selling pressure, leading to an intra-day drop of up to 714 points to 37,164.44 points. The single-day high-low volatility of the index reached 1,757.51 points. The centralized market index closed down 164.32 points at 37,714.15 points, with trading volume reaching a record high of NT$1.4014 trillion.

In March of this year, facing uncertainties from the US-Iran conflict disrupting oil transport and political-economic situations, the TAIEX underwent a correction of 3,691 points. However, since April, the TAIEX has bounced back like a compressed ball, soaring by 7,198.96 points from 31,722.99 points to today's intra-day high of 38,921.95 points in just 15 trading days, an increase of 22.69%. Calculated from the reciprocal tariff low of 17,306.97 points in April last year, the index has multiplied by 1.24 times in a year.

Chen Yi-Kuang, Chairman of Fubon Investment Services, analyzed that there are four main reasons behind this massive bull run in the TAIEX. First is the qualitative change in bargaining chips; the structure of TAIEX investors has shifted from retail investors to "pseudo-institutional" investors.

With the prevalence of Exchange Traded Funds (ETFs), many investors enter the TAIEX through ETFs, bringing strong momentum to the stock market. Taking 2025 as an example, foreign investors sold a massive NT$599.5 billion in the centralized market, yet the TAIEX index surged by 5,928.5 points, a gain of 25.74%. Both rewrote historical records, fully demonstrating the power of the masses.

Currently, the total size of Taiwan's ETFs is nearly NT$9 trillion, growing rapidly from NT$7.6 trillion at the end of 2025, with about NT$5 trillion being equity ETFs, continuously injecting momentum into the TAIEX.

Secondly, Chen stated, "Taiwan has too much money." According to the forecast by the Directorate-General of Budget, Accounting and Statistics, Taiwan's excess savings will break the NT$8 trillion mark for the first time this year, reaching NT$8.46 trillion. The excess savings rate simultaneously jumped to 26.03%, both hitting historical highs.

The third factor is that following the central bank's housing market cooling policies, a lot of money has been driven from the housing market to the stock market. Chen believes that a lot of money "might still be on the way." Today, the trading volume of the TAIEX centralized market exceeded NT$1.4 trillion, and the combined trading volume of listed and OTC markets reached a new high of NT$1.8 trillion. He believes that the single-day combined trading volume of TAIEX listed and OTC markets has a good chance of challenging the NT$2 trillion milestone next.

Chen believes that apart from the clustering of capital, the more important factor is this wave of AI, providing strong underlying support for the rise of the TAIEX. He cited statistics that from 2023 to 2030, overall AI capital expenditure is projected to reach US$5 trillion, translating to an average annual amount of US$600 billion to US$700 billion, wherein Taiwan's supply chain led by TSMC plays a crucial role. In the past technology supply chain pie, China took the biggest bowl; now it's Taiwan's turn, and global capital is moving accordingly.

Facing the severe volatility of the TAIEX today, Chen analyzed that the TAIEX approached the 39,000-point mark in early trading today. The short-term rally was too aggressive, with a positive disparity from the annual line reaching 43.1%. Furthermore, as of the 22nd, the margin balance in the centralized market has increased by about NT$95 billion this year, reaching a wave high of NT$438.5 billion. Today's pullback correction is within market expectations.

As to whether this is a pullback due to excessive gains or the end of the wave-long bull market, Chen suggested that investors can first observe whether the previous high of 35,579 points at the end of February is breached.

Chen believes that based on the total combined revenue of about NT$14.36 trillion announced by listed and OTC companies for the first quarter of this year, representing an annual growth rate of 24.3%, it is estimated that the profits of listed and OTC companies will also rise simultaneously. With such fundamental momentum, it is sufficient to support the TAIEX, and challenging 40,000 points should not be too big of a problem. (Editor: Chang Liang-chih) 1150423

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