Niaz Mahmud: The Dhaka Stock Exchange (DSE), the country’s prime bourse, performed best in the just-concluded July on a high among regional peers. This surge reflects growing investor confidence and a robust economic outlook.

The capital market demonstrated a bull run in July 2025 amid favorable macroeconomic developments and declining government fixed income securities yields, defying worries regarding the proposed higher US tariff imposition.

Analysts predict that this trend may continue into the coming months, bolstered by positive corporate earnings and increased foreign investment.

Bangladesh’s capital market yielded the highest returns in July among Asia's emerging economies. DSEX, the benchmark index of the DSE, gained 12.5%, the highest among its peers, according to the Monthly Economic and Capital Market Overview, which was prepared by EBL Securities.

This remarkable performance highlights investor confidence in Bangladesh's economic resilience and potential for growth. As global markets remain volatile, local investors may increasingly turn to emerging markets like Bangladesh for more stable and lucrative opportunities.

According to the EBL Securities report, the DSEX index surpassed the level of a 9.5-month high, closing at 5,443 points, an increase of 605 points or 12.5% MoM, supported by robust market participation with the average daily turnover in Jul-25 increasing by 119.2% MoM to Tk 730 crore as compared to 340 crore in the previous month, reflecting investors' resilient positive sentiment regarding the market momentum.

Among the peer countries, India’s BSE Sensex fell by 3.5%, Pakistan's Karachi 100 gained 7.9%, Sri Lanka's CSE All-Share Index increased by 8.9%, Indonesia’s IDX Composite rose 8.8%, Shanghai of China rose 4.5%, Thailand’s SET rose by 12.5%, and the USA’s Nasdaq rose 2.4% in the month of July.

Dhaka stock declined 7.2% in Jan-Jun’25

The benchmark DSEX index of the DSE dropped 7.2% in H1’25, while equity market cap declined 8.1% year-to-date (YTD) due to US tariff imposition and the Bangladesh-India-Pakistan and Iran-Israel conflicts.

This has led to increased uncertainty among investors, further exacerbating the downward trend in market performance. This downward trend in market performance has prompted many investors to reassess their strategies and portfolios.

As geopolitical tensions persist, analysts caution that the market may continue to experience volatility, making it essential for stakeholders to stay informed and agile in their investment decisions.

Analysts suggest that these geopolitical tensions, coupled with external trade policies, could continue to impact investor sentiment in the coming months.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), registered a substantial decline of 17.2%, or 378 points, in January-June 2025, reflecting persistent market volatility and economic challenges that eroded investor confidence.

Meanwhile, Average Daily Trading Volume (ADTV) declined by 40% to Tk 383 crore during H1’25 compared to Tk 632 crore in 2024.

According to the Brac EPL’s half-yearly review, the ceramics sector outperformed DSEX (+3.8% YTD return) during H1’25, while NBFI underperformed (-21.7% YTD return). Among the large-cap sectors, the Telco, Fuel & Power, and Pharma sectors have outperformed DSEX, while NBFI, Food & Allied, and Engineering have performed poorly.

Following the Jan '25 rebalancing, DSEX included 87 new companies and dropped 14 companies. While 2 stocks (BEXIMCO and ISLAMIBANK) continue to have floor prices, the latest index rebalancing now adheres to the historical norm, which deviated in 2024.

MNCs (-10.0% YTD return), free-float-based top 10 large-cap scrips (-8.4% YTD), and MCAP-based top 10 (-7.4% YTD) have underperformed compared to DSEX during H1’25.

 Besides, no IPOs debuted during 2025 in the Equity Main Market or in the DSE SME market. No corporate bonds were also listed during the period. The current BSEC commission is focused on bringing stability and discipline to the capital market; hence, priority on introducing IPOs has taken a back seat.

Market analysts have linked the absence of IPOs to the bleak secondary market and what they describe as an unappealing valuation policy under the current public issue rules.

The last company to launch an IPO was Techno Drugs, whose subscription closed in June 2024, during the tenure of the previous commission led by Prof. Shibli Rubayat Ul Islam.

The new commission, appointed following the political changeover in August last year, has yet to approve any IPOs over the past year.

Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), said that many investors opened BO accounts solely to apply for IPOs, but with no new offers, their interest waned. "So, we are losing investors.