Foreign investments on the rise in stock market

The securities regulator instructed 57 stock brokers and dealers of the Dhaka Stock Exchange to return Tk 4 billion to their core business within three months. The funds had been diverted to real estate, violating the Securities and Exchange Rules 2020. The core business involves trading securities from their own dealer accounts.

Stock trading in Bangladesh resumed after a three-day break, resulting in a 1.5-year low turnover at the Dhaka Stock Exchange. The market indices saw a decline, with the benchmark DSEX dropping 95 points to 5,350. The shariah-based DSES fell 21 points, and the blue-chip DS-30 plummeted 37 points. Investor confidence was affected by the ongoing quota reform movement, leading to selling pressure. Trading was limited due to an internet blackout. The market analyst suggested that the market may improve once internet access is restored.

DESCO has been authorized by the stock market regulator to issue preference shares to the government, totaling over 607.69 million shares at Tk 10 each, to fulfill regulatory requirements. These preference shares, not impacting existing shareholders' equity, will prioritize dividends over common stocks but do not grant cumulative dividend rights.

The Bangladesh Securities and Exchange Commission (BSEC) has mandated that over-the-counter (OTC) firms seeking to relist on the SME platform must maintain a minimum of 35% free-float shares through a Qualified Investors Offer (QIO). This requirement ensures that a significant portion of the company's shares, previously held by insiders and major shareholders, are available for public trading.

Turnover at the Dhaka Stock Exchange (DSE) surpassed Tk 1,000 crore after two months, with a 14.69% increase to Tk 1,019 crore. The DSEX index rose 30.01 points to 5,594.64, the DSES index gained 8.18 points to 1,223.32, and the DS30 index increased 4.63 points to 1,964.53.

Foreign investment in Bangladesh's leading companies has declined sharply following the removal of floor prices in January. Over the nine months through March this year, net foreign portfolio investment registered a negative $89 million, compared to $45 million a year ago. The depreciation of the local currency against the dollar, losing over 38% since the Russia-Ukraine conflict began, exacerbated foreign investors' losses even when stock prices remained stable.