In the first half of FY 2024, Bangladesh’s capital market faced challenges, including high inflation, exchange rate pressures, and economic uncertainties. The benchmark DSEX index on the Dhaka Stock Exchange (DSE) increased by 0.64% to 6,246 points by the end of 2023 but witnessed a modest 1.5% decline between June and December 2023.
The daily average turnover dropped by 44.80% year-on-year to Tk543 crore by the end of 2023, attributed to investors’ cautious approach. The central bank announced a contractionary policy to curb inflation above 9%. However, the statement did not address the floor price mechanism, causing a liquidity crunch with over 60% of shares stuck at the floor price. Regulators introduced initiatives to stimulate the capital market, such as allowing banks to calculate capital market exposure based on investment costs.
The Center for Policy Dialogue highlighted concerns in the capital market, including suspicious trading, weak regulatory enforcement, financial reporting anomalies, and the entry of poor companies through IPOs. These challenges reflect a complex environment requiring comprehensive reforms to restore investor confidence and market stability.
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