After months of stagnation in Bangladesh’s capital market, both foreign and local investors are cautiously returning, with September registering fresh growth in Beneficiary Owners’ (BO) accounts.

Market insiders link the renewed activity to improving political stability and the announcement of the next general election date, which have restored some confidence among investors.

Data from the Central Depository Bangladesh Limited (CDBL) show that BO accounts increased by 6,826 during the month, reaching 1,652,227 on 30 September compared to 1,645,401 a month earlier.

Foreign and expatriate investors accounted for 43,801 BO accounts at the end of September, up by 40 from August.

Local investors also contributed significantly to the growth, with their BO accounts climbing to 1,590,695, an increase of 6,591 in the same period.

Market revival tied to stability

Investment Corporation of Bangladesh (ICB) Chairman Abu Ahmed attributed the renewed interest to signs of political and economic stability.

“After August 5 of last year, amid the country’s political deadlock, foreign investment as well as overall trading in the capital market declined significantly,” he said.

“Now, with the interim government announcing that the next national election will be held in February next year, along with overall economic and political stability in the country, the situation has changed.”

He stressed that these developments have encouraged foreign investors to re-enter the market, while local investors are also showing renewed interest, driving the overall rise in BO accounts.

Foreign investors’ exit and gradual return

The latest growth follows a steep decline in foreign participation over the past year. Between November 2023 and 20 May 2024, foreign and expatriate BO accounts dropped by 9,176, including 355 closures this year alone.

On 29 October 2023, there were 55,512 BO accounts held by foreign and expatriate investors. That figure has since fallen by 11,711.

A Non-Resident Investor’s Taka Account (NITA), required for non-residents to trade in Bangladesh’s capital market, must be opened with a brokerage house or merchant bank. CDBL maintains the official record of these accounts.

Shifts among local investors

Although local investors registered modest gains in September, the broader trend since the beginning of 2024 has been one of decline.

At the start of the year, there were 1,773,551 BO accounts. The figure now stands at 1,652,227 – representing a net loss of 121,324 accounts.

Gender and corporate trends

The September data also reveal shifts in investor demographics. Male investors’ BO accounts rose by 5,578 during the month, reaching 1,241,476.

Female investors’ accounts grew by 1,049 to 393,020. Company accounts also increased, climbing by 199 to 17,731.

Market still under pressure

While investor numbers have shown some recovery, the market itself remains under strain. The Dhaka Stock Exchange’s main index (DSEX) stood at 5,594 points on 31 August but had fallen to 5,415 points by the end of September – a drop of 179 points.

Turnover has also contracted sharply. Daily transactions, which once exceeded Tk1,000 crore, are now confined to the Tk600 crore range. Over the past 15 trading sessions, the DSE has not recorded a single day of turnover above Tk1,000 crore.