Is the Taiwan Stock Market Overheated with Buffett Indicator Exceeding Mark? Peng Chin-lung: Taiwanese Industries Possess International Competitiveness
Financial Supervisory Commission (FSC) Chairman Peng Chin-lung addressed concerns about the Taiwan stock market potentially overheating as its 'Buffett Indicator' approaches 500%. He emphasized the international competitiveness of Taiwanese industries and that the stock market will ultimately return to its fundamentals, urging investors to invest cautiously and manage risks. He also proposed that the Taiwan Stock Exchange (TWSE) research investment education for young investors.
📋 Article Processing Timeline
- 📰 Published: May 7, 2026 at 14:26
- 🔍 Collected: May 7, 2026 at 14:31 (4 min after Published)
- 🤖 AI Analyzed: May 7, 2026 at 15:07 (36 min after Collected)
Central News Agency
(Central News Agency reporter Su Szu-yun, Taipei, 7th) The Taiwan stock market briefly broke through the 42,000-point mark in early trading. Several legislators expressed concern that the so-called 'Buffett Indicator'—the ratio of stock market capitalization to GDP—is nearing 500%, questioning whether the market is overheated. FSC Chairman Peng Chin-lung stated that Taiwanese industries possess international competitiveness and are not without fundamental support. He added that no matter how the stock market develops, it will ultimately return to its fundamentals.
The Legislative Yuan's Finance Committee today invited FSC Chairman Peng Chin-lung to present a special report on 'The Promotion and Outlook of Financial Technology Development Business' and to answer interpellations.
Kuomintang Legislator Lin Te-fu noted that the Taiwan stock market recently surpassed 40,000 points, with massive trading volumes daily, and even students and homemakers are eagerly buying stocks. He highlighted that the Taiwan stock market's Buffett Indicator has soared close to 500%, which foreign media describe as playing with fire, and asked if the Taiwan stock market is overheated.
Peng Chin-lung responded that the FSC is the supervisory body for the capital market and will not make any predictions about the market. The FSC's concern is whether the capital market is fair, efficient, and safe, and whether market mechanisms are functioning. He reiterated that the capital market is an economic barometer, and Taiwanese industries possess international competitiveness, so it is not without fundamental support. He emphasized that no matter how the stock market develops, it will ultimately return to its fundamentals.
Peng Chin-lung frankly stated that the current market capitalization of the Taiwan stock market is nearly 140 trillion NTD, and capital market investments inherently require cautious investing and risk management.
Kuomintang Legislator Lai Shyh-bao observed that the number of new accounts for those under 20 has reached 720,000, creating many 'young stock gods,' and questioned whether young investors should also be reminded that investments involve both gains and losses.
Peng Chin-lung said that everyone has different views on the market and suggested that the TWSE could research different investment education approaches for various types of investors.
Regarding the large inflow of hot money from foreign capital into Taiwan recently, legislators expressed concern about any abnormal situations. Peng Chin-lung pointed out that this involves international capital flows, and foreign investment in Taiwan's stock market is not a new phenomenon. For Taiwan to become an international-level capital market, foreign capital is inherently an important participant.
The 'Buffett Indicator' is calculated by dividing a country's total stock market capitalization by its Gross Domestic Product (GDP). This indicator signifies that, in the long run, stock market performance should reflect the growth of the real economy. When the two diverge significantly, it usually indicates an overheated or excessively cool market. For the US stock market, exceeding 120% starts to raise alarms, and over 150% indicates significant overheating. For the Taiwan stock market, exceeding 300% enters the overvalued zone, requiring attention to pullback risks. However, Warren Buffett himself admitted in 2013 that this indicator is not entirely precise, so it should be referenced with some rationality. (Editor: Lin Shu-yuan) 1150507
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(Central News Agency reporter Su Szu-yun, Taipei, 7th) The Taiwan stock market briefly broke through the 42,000-point mark in early trading. Several legislators expressed concern that the so-called 'Buffett Indicator'—the ratio of stock market capitalization to GDP—is nearing 500%, questioning whether the market is overheated. FSC Chairman Peng Chin-lung stated that Taiwanese industries possess international competitiveness and are not without fundamental support. He added that no matter how the stock market develops, it will ultimately return to its fundamentals.
The Legislative Yuan's Finance Committee today invited FSC Chairman Peng Chin-lung to present a special report on 'The Promotion and Outlook of Financial Technology Development Business' and to answer interpellations.
Kuomintang Legislator Lin Te-fu noted that the Taiwan stock market recently surpassed 40,000 points, with massive trading volumes daily, and even students and homemakers are eagerly buying stocks. He highlighted that the Taiwan stock market's Buffett Indicator has soared close to 500%, which foreign media describe as playing with fire, and asked if the Taiwan stock market is overheated.
Peng Chin-lung responded that the FSC is the supervisory body for the capital market and will not make any predictions about the market. The FSC's concern is whether the capital market is fair, efficient, and safe, and whether market mechanisms are functioning. He reiterated that the capital market is an economic barometer, and Taiwanese industries possess international competitiveness, so it is not without fundamental support. He emphasized that no matter how the stock market develops, it will ultimately return to its fundamentals.
Peng Chin-lung frankly stated that the current market capitalization of the Taiwan stock market is nearly 140 trillion NTD, and capital market investments inherently require cautious investing and risk management.
Kuomintang Legislator Lai Shyh-bao observed that the number of new accounts for those under 20 has reached 720,000, creating many 'young stock gods,' and questioned whether young investors should also be reminded that investments involve both gains and losses.
Peng Chin-lung said that everyone has different views on the market and suggested that the TWSE could research different investment education approaches for various types of investors.
Regarding the large inflow of hot money from foreign capital into Taiwan recently, legislators expressed concern about any abnormal situations. Peng Chin-lung pointed out that this involves international capital flows, and foreign investment in Taiwan's stock market is not a new phenomenon. For Taiwan to become an international-level capital market, foreign capital is inherently an important participant.
The 'Buffett Indicator' is calculated by dividing a country's total stock market capitalization by its Gross Domestic Product (GDP). This indicator signifies that, in the long run, stock market performance should reflect the growth of the real economy. When the two diverge significantly, it usually indicates an overheated or excessively cool market. For the US stock market, exceeding 120% starts to raise alarms, and over 150% indicates significant overheating. For the Taiwan stock market, exceeding 300% enters the overvalued zone, requiring attention to pullback risks. However, Warren Buffett himself admitted in 2013 that this indicator is not entirely precise, so it should be referenced with some rationality. (Editor: Lin Shu-yuan) 1150507
Choose to stand with facts, every sponsorship you make is a force for safeguarding press freedom.
Download the Central News Agency 'First-hand News' APP to stay updated with the latest news.
Text, images, and videos on this website may not be reproduced, publicly broadcast, or publicly transmitted and utilized without authorization.