Norway's sovereign wealth fund cuts Bangladesh exposure, exits key blue-chip stocks

Infographics: TBS

Norway's sovereign wealth fund (SWF), the world's largest investment fund, has reduced its exposure to Bangladesh's capital market by 17% in 2025, continuing a gradual pullback that has been underway for several years amid economic and market uncertainties.

According to disclosures by Norges Bank Investment Management, the fund has also exited several prominent listed companies, including Beximco Pharmaceuticals, Walton, MJL Bangladesh, Renata, Olympic Industries and Singer Bangladesh.

Data shows the fund's total investment in Bangladesh fell to $117.12 million in 2025, down from $141.93 million in 2024. This marks a steady decline from a peak of $248.35 million in 2020. Over the past six years, the fund's exposure has tapered off consistently, reflecting caution toward the local equity market despite Bangladesh's long-term growth potential.

Although overall holdings have declined, Norway's SWF continues to retain stakes in a select group of major companies. Its largest investment remains in BRAC Bank, with a 4.42% stake valued at $45.45 million.

Other key holdings include Square Pharmaceuticals (1.93%, $27.81 million), Grameenphone (0.71%, $20.35 million), City Bank (3.55%, $10.73 million), Prime Bank (3%, $8.16 million) and Marico Bangladesh (0.67%, $4.59 million). Ownership levels in most of these companies, however, declined compared to 2024, indicating partial sell-offs rather than new investments.

Market analysts say the reduction in exposure is driven less by company-specific weaknesses and more by macroeconomic and structural challenges.

A senior analyst at Brummer & Partners Bangladesh, speaking on condition of anonymity, said the slowdown in investments since 2020 stems from multiple factors, including the Covid-19 pandemic, the prolonged floor price mechanism in the stock market, taxation concerns, foreign exchange volatility, and heightened economic and political uncertainty.

"The fund usually invests in equities for the long term, but depending on business outlook and risk assessment, it withdraws or reduces exposure from time to time," the analyst said, adding that investments could rise again if macroeconomic indicators show sustained improvement.

The analyst noted that Norway's SWF continues to hold shares in fundamentally strong and well-governed companies such as BRAC Bank, City Bank, Grameenphone and Square Pharmaceuticals, reflecting its long-term investment philosophy and preference for market leaders with relatively stable earnings prospects.

Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage, said 2025 saw a broader trend of foreign portfolio investors trimming holdings in Bangladesh. "Many foreign investors chose to liquidate or partially exit positions as foreign exchange conditions eased, allowing smoother repatriation of funds," he said.

Shawon added that growing caution ahead of the upcoming national election prompted investors to limit exposure until there is greater clarity on political stability and policy direction. "If the political transition brings confidence and predictability, foreign investors are likely to return. Bangladesh still offers attractive long-term opportunities given its large domestic market and growth-oriented industries," he said.

Norway's sovereign wealth fund began investing in Bangladesh in 2015 and has since become the country's largest foreign portfolio investor, with cumulative investments estimated at around Tk1,800 crore. Globally, the fund manages assets worth approximately $2.11 trillion across 68 countries.