Dhaka stocks see Tk270cr foreign outflow in 2025
Analysts expect sentiment to improve after February election as buying picks up.
Foreign investment in the country's stock market weakened in 2025, with overseas investors pulling out a net Tk270 crore from equities amid economic fragility, market volatility and pre-election uncertainty, according to data from the Dhaka Stock Exchange.
The data shows that foreign investors sold shares worth Tk2,095.34 crore in 2025, while purchasing stocks valued at Tk1,825.07 crore, resulting in a net negative position of Tk270 crore for the year.
Analysts and insiders said foreign investors remained cautious in the capital market ahead of the February 2026 election amid political and economic uncertainty, continuing to withdraw funds throughout the year.
Reviewing the 2025 trading data, they believe that following the election, foreign investors' confidence in the market has improved, which is expected to turn their net position positive in the coming months.
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A fortnightly data for February (1 to 15) showed that in the first 15 days, foreign trading year-on-year increased by 48% to Tk173 crore, which was Tk116.63 crore in the same time of 2025.
Ahsanur Rahman, CEO of BRAC EPL Stock Brokerage, a key brokerage house for foreign investors, told The Business Standard, "Foreign investors were more cautious in 2025 due to the upcoming election and economic uncertainty."
He said that following the election, investors' confidence increased. "In post-election trading, foreigners have turned more bullish in the market and they are concentrating on buying good and fundamental stocks."
He expressed hope that foreign investors' net investment position would turn positive in February, as their investments are likely to exceed their sales.
Md Ashequr Rahman, managing director of Midway Securities, also expressed hope that foreign investment in the capital market is likely to increase after the election, as he has observed fresh fund inflows into the market.
He said that due to various factors – including the prevailing economic conditions – foreign investors remained very cautious, which is why they continued to withdraw funds.
"If the capital market functions properly and the supply of quality stocks is ensured, foreign fund inflows may increase in Bangladesh, as many investors are now shifting towards emerging and frontier markets," he added.
Additionally, reform initiatives by the capital market regulator, the Bangladesh Securities and Exchange Commission, kept the market at a standstill as no IPO to raise funds, and some actions for manipulation led to market volatility.
The existing commission was formed by the interim government in August 2024 after the student-led uprising.
In 2025, foreign turnover in stocks – both buying and selling – slightly increased by 8% to Tk3,920 crore compared with 2024.
Foreign investors withdrew significant funds from stocks in 2024 as well, with their net investment position turning negative by Tk261 crore.
Over the past eight years, foreign investors' net investment position was negative in seven of those years, with 2023 being the only year with a positive position of Tk64 crore.
Analysing the 2025 data, in five out of the 12 months, foreign investors' net investment position was positive, meaning that in those months they bought more shares than they liquidated through sales.
From May to August 2025, foreign investors were particularly active in buying shares, which pushed stocks higher and lifted the DSEX significantly.
Since then, until December, they continued to sell off shares to withdraw funds.
Lack of good stocks
Market experts and investors said that in the local capital, there is a lack of quality and good stocks.
They advised that the new government take initiatives to make the capital market vibrant and to list state-owned, highly profitable firms on the market.
Over the last year under the interim government, there was much discussion to enlist the state-owned firms on the stock market, but not a single firm got enlisted.
Ahsanur Rahman said, "There is a shortage of quality stocks in the market to attract foreign investors. Only a handful of stocks meet their return expectations.
"To revitalise the capital market and draw foreign participation, we must list more fundamentally strong companies."
