Despite clear directives from Chief Adviser Professor Muhammad Yunus to reinvigorate the country’s capital market, no visible headway has been made so far owing to stalled reform initiatives and longest IPO drought in years, which is consequently blowing the wind out of the investors’ sails.

Following the fall of the fascist regime last year, the interim government put emphasis on reform initiatives in different sectors including the capital market.

In October 2024, the government formed a high-level task force to stabilise the capital market. The task force made 17 recommendations aimed at restoring investor confidence and ensuring structural reforms. More than a year into the submission of the recommendations, nothing has progressed far.

The situation, despite sporadic attempts to bring in regulatory reforms, has been compounded further by lack of initiatives to attract new investment or to list new companies, hurting investor confidence and eroding market stability.

Market insiders say that the BSEC Chairman Khondoker Rashed Maqsood has focused more on regulatory reforms since taking office, leaving the initiatives to lure in fresh investment in limbo.

During his tenure, the commission has even cancelled over 13 pending IPOs but has failed utterly to bring any new company to the market. The fact that no new company has gone public in the last 20 months is hamstringing the growth of the capital market.

ANM Ataullah Naeem, President of the Bangladesh Capital Market Investors Alliance, said, “After the fall of the Hasina government, the banking sector’s paralysis spilled over into the capital market. Although the market initially recovered after the budget announcement, it has again slipped back into stagnation.”

He added, “If the interim government’s initiatives for the capital market had been implemented, investor confidence would have returned. Changing rules alone won’t help retain investors — we need new listings and new investments.”

Adding to investor anxiety, the BSEC recently released a draft of the Mutual Fund Rules 2025, which market stakeholders fear could make the market even more vulnerable. They warn that instead of promoting sustainable growth, the draft regulations could push the capital market to the brink of collapse.

On condition of anonymity, a former president of the Bangladesh Merchant Bankers Association (BMBA) said that the lifeline of the capital market is mutual funds.

“Given the current situation, only mutual funds can help revive it. But the proposed Mutual Fund Rules 2025 suggest stopping new close-end fund approvals, which could lead to liquidation of existing funds — a disastrous outcome,” warned the expert.

BSEC Chairman Khondoker Rashed Maqsood said the commission is actively working on market reforms, focusing on modernising margin rules, mutual fund regulations, IPO regulations, and corporate governance guidelines.

“These reforms are logical and evidence-based,” he said. “We expect to complete all reform initiatives within the next two months.”

The stats, however, do not leave much room for hope.

No new IPOs for months

Since the current BSEC took charge over a year ago, not a single new IPO has been approved. This has virtually halted new industrial investment and business expansion through capital market financing.

During the 2007–2008 caretaker government, 26 companies — including Jamuna Oil, Meghna Petroleum, and Titas Gas — were listed through IPOs. In 2009, Grameenphone joined the market and remains the country’s largest listed company.

According to Dhaka Stock Exchange (DSE) data, 52 companies have raised Tk7,980 crore through IPOs over the past five years at an annual average of Tk1,596 crore.

During the five fiscal years from 2019–20 to 2023–24, a total of 52 companies raised Tk7,980 crore through IPOs. In FY2019–20, four companies collected Tk327 crore; in FY2020–21, 15 companies raised Tk1,286 crore; in FY2021–22, 15 companies mobilised Tk4,848 crore; in FY2022–23, nine companies raised Tk678 crore; and in FY2023–24, nine companies collected Tk841 crore from the capital market.

However, in FY2024–25, not a single company was listed, and no funds were raised through IPOs — a first in recent history. The last company to go public was Techno Drugs on 7 March 2024.

Government’s dilly-dallying

Despite repeated promises over the past two decades, successive governments have failed to list profitable state-owned enterprises on the stock market. The latest attempts have again raised skepticism.

The chief adviser of the interim government held a high-level meeting with regulators and stakeholders of the capital market in May this year. He instructed authorities to offload government-held shares of multinational companies (MNCs), encourage large domestic firms to go public, and promote bond and equity-based fundraising instead of relying solely on bank loans. However, six months later, none of these directives have been implemented.

Meanwhile, the government’s recent plan to list 18 state-owned enterprises (SOEs) has also stalled.

In 2005, a list of 66 potential firms was prepared for listing, which was later reduced to 26 in 2010. The BSEC, in a recent bid, identified 15 state-owned and multinational firms, in which the government holds a stake, for potential listing back in August.

A Finance Ministry meeting on 3 August 2025 discussed the issue, but progress has remained stagnant.

BSEC spokesperson Md. Abul Kalam said, “We are pursuing a different strategy this time. Before the meeting held on 3 August, we met with company representatives and asset managers to identify specific challenges. Once those are resolved, the firms can be brought to the market.”

However, many entities have no clue about such progress. For example, officials from Jalalabad Gas and Sylhet Gas Fields Limited confirmed that they have not yet received any new instructions regarding listing.

The spillover effect

Because of such a lacklustre approach, Bangladesh’s capital market has failed to turn the corner. As a result, capital market performance is dipping while investor confidence is going low.

According to the Central Depository Bangladesh Limited (CDBL), the number of beneficiary owners’ (BO) accounts dropped from 1,690,511 in May 2025 to 1,643,035 (as of 22 October 2025) — a decline of 47,476 accounts in just five months.

Market capitalisation has also been falling steadily. Between 12 and 16 October, the market lost Tk31,408 crore in capitalisation.

The DSEX index, which stood at 5,778.64 points on 18 August 2024, fell to 4,664.79 on 3 June 2025, down by 1,113.85 points (19.28%). It currently stands at around 5,061 points.

What the experts say

Abu Ahmed, Chairman of the Investment Corporation of Bangladesh (ICB), said, “If new capital isn’t raised, the market will dry up. Without new shares, investors lose interest, and the market keeps moving in circles.”

He went on to say, “Until political uncertainty and law-and-order concerns ease, entrepreneurs will avoid taking risks. IPOs might return once the stability is restored. With the national election approaching, businesses are delaying major investments.”

“Reform measures have been ongoing for quite some time, but investor confidence is yet to materialise into concrete results. Without new investments, the market cannot regain strength”, opined Saiful Islam, President of the DSE Brokers Association of Bangladesh (DBA), adding that investors would benefit only if the BSEC completes its reform initiatives.