Bangladesh's capital market has recently shown its strongest performance since the political storm of August 2024, with daily turnover crossing Tk 1,000 crore for nine consecutive trading days, marking the highest sustained level in nearly two years.
The hint of a recovery comes as market stakeholders express cautious optimism that the bourse may finally be able to shake off its long-standing "casino" tag - a term Finance Minister Amir Khosru Mahmud Chowdhury himself used at a pre-budget event in April, acknowledging that good companies avoid the market because they perceive it as a casino where no credible business would want to be listed.
The market's troubled history dates back to the 2010 share market scam, which wiped out the savings of lakhs of investors. Though the market should ideally rank second only to banks in the finance sector, it instead became synonymous with manipulation and investor despair, dominated by a small group of market manipulators.
When the Awami League government fell following the student-mass uprising in 2024, sweeping changes followed in nearly every sector, but the capital market saw little positive impact initially. Khondoker Rashed Maqsood was appointed chairman of the Bangladesh Securities and Exchange Commission (BSEC) in August 2024, but he failed to win back investor confidence during his tenure.
The Shibli legacy
Much of the market's troubles can be traced back to the tenure of Professor Shibli Rubayat Ul Islam, a Dhaka University academic appointed BSEC chairman by the Awami League government in May 2020. Combined with rampant loan defaults in the banking sector, manipulation across every segment of the capital market under Shibli's leadership pushed the economy into what observers describe as a dark chapter.
After the Awami League government's fall, a string of irregularities under Shibli came to light. He is currently in jail in connection with an Anti-Corruption Commission (ACC) case involving bribes amounting to nearly Tk 4 crore.
Dhaka Stock Exchange (DSE) director Minhaz Mannan Emon, who had spoken out against Shibli's irregularities, even faced a lawsuit over his remarks.
Describing that period, Minhaz said it was a genuinely dark time for Bangladesh's capital market, when no credible investors came forward and no good companies agreed to get listed.
He said only companies from which the Shibli commission could personally benefit were listed over those four years.
According to Minhaz, after taking charge in 2020 the commission listed shell companies through IPOs without due diligence, raising hundreds of crores of taka from the market - the fallout of which became visible from 2023 onward, discouraging fresh listings and eroding investor confidence altogether.
Investor confidence had begun to return after the change in government, evidenced by DSE turnover crossing Tk 2,000 crore on August 11, 2024, alongside rising share prices. However, this rally proved short-lived.
General investors say they had expected the interim government to appoint someone who genuinely understood market dynamics. Instead, they allege the Maqsood commission effectively halted the rally and focused on reform measures that further dampened sentiment.
Tarek Hossain, a general investor, acknowledged that the market had indeed been riddled with corruption, with several low-quality companies involved in insider trading and manipulation.
However, he argued the commission should have been mindful that lakhs of small investors had their money locked into the market, and abrupt decisions risked wiping out their capital.
Another investor, Adiba Akter, said that following the change of government, several companies were fined, directly affecting the market. Investors holding Beximco shares found themselves in particular difficulty, while several companies shut down altogether.
She said the commission should have pursued reforms through a structured process rather than daily ad-hoc decisions that kept dragging the market down.
From September 2024, market conditions kept steadily deteriorating under the Maqsood commission. Turnover, which had touched over Tk 2,000 crore two months earlier, fell to around Tk 300 crore in the first week of October. On October 3, a section of investors staged protests in front of the BSEC office in Agargaon demanding the commission's resignation, at one point locking the main gate of the commission's office.
Mizanur Rashid, president of the Bangladesh Capital Market Investors' Unity Council, who led the protests, said good companies had collapsed in the market while large investors withdrew funds out of disillusionment.
He noted that daily turnover that once exceeded Tk 300 crore within the first few hours fell to around Tk 300 crore for the entire day, sometimes even less, leaving protest as the only option.
Mizan added that the period under the Maqsood commission was nothing short of nightmarish for investors who had taken margin loans to invest, many of whom lost their principal and were left in debt instead of returns, driving them to take to the streets out of desperation.
Despite repeated demands for its resignation, the Maqsood commission remained in place beyond the interim government's tenure and survived roughly three months even after the national election.
In May, the BNP government, aiming to overhaul the capital market, appointed a new BSEC chairman along with three new commissioners.
New leadership, new momentum
On June 4, corporate figure Masud Khan was appointed BSEC chairman, with Nahid Mahtab, Tanvir Habib Rahman and Nafeez Al Tarik appointed as commissioners. Since the new commission took charge, the market has shown clear signs of recovery; notably, turnover exceeded Tk 1,000 crore on all nine trading days between June 2 and June 14.
According to investors, floor prices imposed on shares of Islami Bank PLC and Beximco Limited had been weighing on the broader market. One of the new chairman's first decisions was to lift these floor prices, with an assurance that no floor price would be imposed on any company's shares going forward, allowing the market to function on its own dynamics.
Masud Khan said the commission will grant stock exchanges full independence in market monitoring and oversight of listed companies to ensure transparency and accountability, with their powers to be expanded further if needed, as long as exchange decisions do not harm investor interests.
Budget roadmap raises hopes
Another major positive signal for the market came through the proposed national budget for FY2026-27, where the finance minister outlined a separate roadmap for the capital market, detailing the government's vision and upcoming measures.
In his budget speech, the finance minister said unnecessary complexities, delays, excessive cost-approval hurdles and ambiguities will be reduced to encourage good and promising companies to get listed, aiming to make the market more transparent, diversified and confidence-driven.
He also said the IPO process will be made time-bound and technology-driven, with the entire process moved online, and information exchange among issuers, issue managers, stock exchanges, the Central Depository Bangladesh Limited (CDBL) and the regulator integrated through a unified digital platform.
The minister expressed hope that repatriation and reinvestment of legitimate foreign investment profits, as well as proceeds from share or securities sales through Non-Resident Investor Taka Accounts, will be completed within a single working day going forward.
Market stakeholders view the appointment of the new chairman alongside the budget's emphasis on the capital market as positive developments. Brokerage officials believe the government's clear policy commitment to developing the market into an effective platform for long-term capital raising will have a positive impact.
DSE Brokers Association of Bangladesh (DBA) president Saiful Islam said the capital market has long failed to play its expected role due to a crisis of confidence, limited investment products and overreliance on bank financing.
He said if the policy commitments made in this budget to establish the capital market as a key driver of the economy are implemented, it will boost both domestic and foreign investment, create opportunities for new entrepreneurs to raise capital, and accelerate employment and industrialisation.
Market analysts also stressed the importance of building on reforms already introduced during the interim government's tenure in mutual funds, IPO and margin loan policies. They expect that if good companies can be brought to the market, the bourse will finally shed its image as a casino or a haven for insider trading.
Investment Corporation of Bangladesh (ICB) chairman Abu Ahmed said the capital market had deliberately been kept underdeveloped for years, despite having the potential to bring about major change in the country's economy, an opportunity no government has effectively utilised so far.
Expressing hope that the entry of a single good company could transform the market's character and bring back investors who had permanently exited, Abu Ahmed said multinational companies listed in the capital markets of India, Pakistan and Sri Lanka remain absent from Bangladesh's market, and the reasons behind this reluctance need to be identified and addressed.
He also proposed bringing major infrastructure assets under securitisation to further enrich the market.
Investors, meanwhile, hope that the new government's effective measures will help restore the respect long denied to those who invested in the capital market, who had often been dismissed as mere speculators.