Bangladesh capital market recovery tied to post-election stability: BB

Bangladesh's capital market is showing signs of recovery, but its long-term growth will depend on post-election political stability, structural reforms, and sustained regulatory improvements, the central bank said yesterday.

In its monetary policy statement for January–June 2026, Bangladesh Bank (BB) said the market exhibited an upward trajectory in the first half of FY26 despite occasional fluctuations, driven by a sharp increase in turnover that signals a revival of market momentum.

The DSEX index, the benchmark of the capital market, rose 0.6% to 4,865 points at the end of December 2025, up from 4,838 points in June. 

The index gained further ground in the following weeks, crossing the 5,200 mark in early February 2026. Average daily turnover reached Tk650 crore in H1 FY26, up from Tk472 crore a year earlier, reflecting renewed investor confidence, BB said.

"These positive developments reflect revitalized market momentum, supported by ongoing reforms and a more favorable macroeconomic environment," the central bank said.

To further modernize the capital market, the government is pursuing measures including reducing state shareholdings in multinational companies, encouraging local firm listings, preventing market manipulation, and providing tax incentives. 

BB also highlighted that the introduction of commodity exchanges and blockchain-based back-office systems is expected to improve transparency and bolster investor confidence. Coordinated efforts by the Ministry of Finance and other stakeholders are seen as essential to deepen financial markets and develop a more efficient debt market.

Regulatory Reforms to Boost Stability

The central bank noted recent amendments by the Bangladesh Securities and Exchange Commission (BSEC), which aim to enhance market stability, build investor confidence, and support long-term development. Among these, the Margin Rules 2025 strengthen risk management in margin trading, while proposed updates to IPO, Mutual Fund, and Public Issue Rules are intended to improve transparency and governance.

BSEC has also introduced faster investor dispute resolution mechanisms, established a Shariah Advisory Council to expand Islamic capital market products, and adjusted compliance timelines for brokers to reduce market stress, BB said.

Bond Market Developments

In the secondary market, a total of 232 government treasury bonds were actively traded until December 2025. During the month, the government raised Tk240 billion through six investment Sukuk, enabling banks and non-bank financial institutions including Islamic banks to meet statutory liquidity requirements and participate more actively in monetary management.

To strengthen the secondary market and establish a market-based yield curve, Bangladesh Bank has mandated that Primary Dealers provide two-way price quotes for Treasury bonds within the first hour of each business day, with compliance expected by 31 January 2026.