Bourse faces historic stagnancy amid pol investment woes
Muhammad Ayub Ali :
Bangladesh’s stock market is grappling with a prolonged downturn, shrinking investment opportunities, and capital outflows by foreign investors.
No IPOs have been launched this year, and many multinational company shares remain stuck at floor prices, highlighting market stagnation.
Analysts warn that without an elected government and stable policies, conditions are unlikely to improve, though greater corporate transparency and listing of major multinationals could restore investor confidence over the long term.
Not a single IPO issued round the year
IPOs, often called the “new blood” of the stock market, have completely dried up in the country. As 2025 nears its end, not a single IPO has been launched-an unprecedented situation and the first time the market has gone an entire year without any new listings. Market participants see this as a major long-term setback. The last IPO was Techno Drugs in June 2024. Since then, IPOs have remained stalled for one and a half years-the longest such drought in the history of the country’s stock market.
Recent new rule create uncertainty
A recent Bangladesh Securities and Exchange Commission (BSEC) notification has created uncertainty in the closed-end mutual fund sector. Under the new rule, 31 of the 34 listed closed-end mutual funds face possible liquidation or conversion into open-end funds after trading below the prescribed limit for six months.
According to Dhaka Stock Exchange data, only three funds currently meet the BSEC threshold. The future of the remaining funds will be decided through a 75 percent unit-holder vote at a special meeting, where investors may also change fund managers or trustees.
BSEC says the move aims to address long-standing dividend issues, correct abnormal price-to-NAV gaps, and restore investor confidence, noting that closed-end funds are being phased out globally.
Foreign investors get out the market
Foreign investors are steadily pulling capital out of the country’s stock market, driven by political instability, banking sector weaknesses, and a prolonged crisis of confidence. Instead of making fresh investments, they are increasingly selling shares.
Bangladesh Bank data show net foreign investment in listed shares turned negative at $66 million (about Tk 807 crore) during July-October of FY2025-26, far worse than the $9 million outflow in the same period last year.
Market participants say instability in the banking sector where only a handful of banks remain stable and declining consumer purchasing power amid high inflation are key concerns for foreign investors.
Investors of multinational companies in despair
Investors in multinational company shares are in deep frustration as most remain stuck at floor prices. Of the 13 multinational companies listed on the stock market, shares of seven British American Tobacco, Grameenphone, Linde BD, Robi Axiata, Singer Bangladesh, Marico Bangladesh and RAK Ceramics have been locked at the floor price for a long time, while only six trade above it.
Despite strong financial fundamentals and regular high dividends, investors in these top “blue-chip” stocks have gained nothing and cannot even sell their holdings.
Market experts say the prolonged floor-price lock on such fundamentally strong companies signals market instability, especially when weaker and junk stocks continue to trade freely.
Saiful Islam, President of the DSE Brokers Association of Bangladesh (DBA), told The New Nation that market conditions are unlikely to improve without an elected government in place.
Currently, the country’s GDP growth is below 4 percent. He emphasized that the first priority of an elected government should be to raise GDP growth to around 6-7 percent.
Once economic growth picks up, overall economic activities will be revitalized, foreign investment is likely to return, and the stock market will rebuild, restoring investor confidence, he added.