Staff Correspondent: Foreign investor participation in Bangladesh's stock market-already low compared to similar emerging markets-saw a sharp decline in June, with transaction volumes falling nearly 44% from the previous month.
According to official data, foreign trades amounted to Tk 285.31 crore in June, down from Tk 506.74 crore in May. Analysts attribute the drop primarily to a trading halt for more than half the month due to Eid holidays and weekends.
Monthly figures show that foreign transactions stood at Tk 426.94 crore in April, Tk 171.96 crore in March, Tk 264.14 crore in February, and Tk 181.81 crore in January. In total, foreign investors conducted transactions worth Tk 1,837 crore in the first half of 2025.
Saiful Islam, President of the DSE Brokers Association (DBA), told Bonik Barta that "the long market closure last month due to holidays significantly reduced trade activity. Moreover, both local and foreign investors remain cautious due to declining confidence in the market. We're working to rebuild that trust."
The downturn is part of a broader trend. Over the past four years, foreign participation in Bangladesh's capital market has consistently declined. In 2020, foreign transactions on the Dhaka Stock Exchange (DSE) totalled Tk 10,388 crore, accounting for 3.85% of total turnover. This fell to Tk 7,764 crore (1.10%) in 2021, and further plummeted in 2022 and 2023 to Tk 4,180 crore (0.89%) and Tk 2,167 crore (0.77%) respectively. A modest recovery was seen in 2024, with foreign trades reaching Tk 3,929 crore-1.22% of total turnover.
Meanwhile, market performance during the first half of 2025 has been disappointing. The benchmark DSEX index lost 7.2%, while daily average turnover dropped by 39%. All sectors except ceramics delivered negative returns. Even shares of large-cap and multinational companies ended in the red, adding to investor frustration.
The steady decline in foreign involvement highlights ongoing concerns over policy clarity, economic stability, and corporate governance. Analysts warn that without significant reforms and a restoration of investor confidence, foreign capital will remain on the sidelines.