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.

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."

Bangladesh's export momentum braces for fresh headwinds as uncertainty over the fate of the United States' short-term 15% tariff—whether it will be extended, increased or withdrawn after five months—has prompted American buyers to pause fresh commitments.

Beyond the freeze in new orders, the tariff—imposed by President Donald Trump after the US Supreme Court scrapped reciprocal tariffs—has triggered renegotiations on existing shipments.

Several US buyers are now demanding 2% price cuts on goods already in the pipeline, following the reduction of the tariff from 20% to 15%. Exporters say the move threatens to further erode already thin margins.

Buyers 'sitting on the fence'

At least eight Bangladeshi exporters told The Business Standard that US clients are "sitting on the fence" amid rapidly shifting trade policies. Seven reported a clear pause in decision-making, warning that order flows will not normalise without long-term policy clarity.

Shovon Islam, managing director of Sparrow Group, said buyers are in observation mode.

"They are deferring decisions until the final tariff structure becomes clear. Without certainty, long-term planning is impossible," he said.

SM Khaled, managing director of Snowtex Group, echoed the concern. "Our current order book is secured until June, but there is deep uncertainty about what happens after the five-month window," he said.

For Khaled, whose annual exports exceed $200 million, the US accounts for 20% of total trade. The present volatility, he added, has created a procurement stalemate, with buyers reluctant to commit beyond immediate needs.

Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association, described the situation as "unpredictable".

"Buyers are in the dark about where the tariff rates will finally land," he said. According to him, customers are placing only minimum-volume orders, a conservative approach that could severely hurt Bangladesh's garment exports if prolonged.

Policy volatility weighs on trade

Economists say the stop-start nature of US trade policy is amplifying risk.

Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue, pointed to the legal oscillation shaping US tariff measures.

"The Supreme Court struck down the initial reciprocal tariffs, but the administration quickly introduced new ones under different statutes," he noted.

Because President Trump retains the authority to impose targeted or "surgical" tariffs on specific products or countries, Mustafizur warned that buyers are operating in a vacuum of uncertainty—booking orders only when unavoidable.

The US remains Bangladesh's largest apparel market, absorbing around 20% of total garment exports.

Data from the US-based Office of Textiles and Apparel (Otexa) show that US imports from Bangladesh reached $8.18 billion in 2025, accounting for 11% of total US global apparel sourcing.

In April 2025, the Trump administration initially set a 37% reciprocal tariff on Bangladesh, later negotiated down to 20% by August. Exporters now fear that a uniform 15% tariff applied equally to all countries would wipe out Bangladesh's relative advantage.

"The earlier tariff structure gave us a head start over China and India," Khaled said. "We captured orders shifting out of China because of higher costs there. With a flat tariff, that incentive disappears."

Otexa data show that between January and November 2025, Chinese garment exports to the US fell 34%, while Bangladesh's shipments grew 12%, alongside gains by several other major apparel exporters.

A level tariff regime, exporters argue, could reverse that trend by intensifying competition.

Buying houses squeezed as buyers seek discounts

The reduction from 20% to 15% has sparked immediate renegotiation attempts.

The Business Standard has seen an email from a mid-sized US buyer requesting a 2% downward adjustment on already-placed orders that have yet to clear customs.

"Please note due to recent tariff changes, Charles is requiring a 2% adjustment to the DDP cost for any goods that have not cleared customs," the message reads, instructing compliance by close of business Monday (US time).

A senior official at a Dhaka-based buying house, speaking anonymously, said the burden of adjustment would fall on intermediaries.

"We cannot push manufacturers for further discounts. We have to absorb the cuts ourselves," he said. For his firm, which sends 90% of its shipments to the US, the financial exposure is significant.

Other agents said the weekend timing of Washington's tariff shift left them scrambling as the US business week began, anticipating further renegotiation requests.

Mohammad Hatem warned that more buyers are likely to follow suit.

Yet exporters argue that the 5 percentage-point tariff reduction should not be captured entirely by retailers. They say manufacturers had already slashed prices during the higher-tariff period to keep orders flowing and deserve to share in the benefit.

Shovon Islam said his group plans to seek a 1% share of the savings from buyers.

Khaled, however, struck a more sceptical tone. "The buyers are pocketing the entire benefit of the lower rates without offering us any concessions," he said.

For now, Bangladesh's garment sector finds itself caught between policy unpredictability in Washington and pricing pressure from its largest export market—waiting for clarity that may not come soon.

The government is set to adopt a "One Health Approach" to tackle health emergencies and pandemics, recognising that approximately 75% of emerging human infectious diseases are zoonotic — naturally transmitted from animals to humans — and that environmental factors also play a crucial role.

A new project titled "Strengthening Health Emergency Prevention, Preparedness, Response and Resilience with One Health Approach" has been proposed, with an estimated cost of Tk2,993 crore. Of the total amount, Tk2,745 crore will be provided as a loan by the World Bank.

The project aims for completion by 2030 and will be implemented jointly by the Health Services Division, the Directorate General of Health Services (DGHS), and the Department of Livestock Services (DLS).

The project proposal has already been sent to the Planning Commission for approval, and a Project Evaluation Committee (PEC) meeting on the proposal is scheduled for next Wednesday, according to Planning Commission sources.

Infograph: tBS
Infograph: tBS

Integrated approach to health safety

The One Health Approach focuses on the interconnectedness of human, animal, plant, and environmental health. The project aims to strengthen Bangladesh's capacity to detect, prevent, and respond to health emergencies.

According to the project proposal, key targets include detecting 70% of priority outbreaks within seven days, delivering 70% of lab results within three days, and certifying 80% of public BSL-2 and 100% of BSL-3 labs for biosafety.

Emergency preparedness measures include establishing epidemiological units in 45 districts, forming 182 rapid response teams, preparing 50 upazilas for health emergencies, and strengthening critical care in 10 medical college hospitals.

Animal health interventions include achieving 80% rabies vaccination coverage among roaming dogs and establishing five animal disease-free zones.

In Bangladesh, in the wake of the 2007 avian influenza outbreak, experts in human, animal, and environmental health came together to form the One Health network. Subsequently, an inter-ministerial steering committee and the One Health Secretariat were established to coordinate and strengthen this integrated approach

Infograph: TBS
Infograph: TBS

Strengthening surveillance systems

The project will implement the One Health Strategic Framework, covering 11 core areas such as governance, workforce development, laboratory capacity, epidemic preparedness, integrated surveillance, food safety, antimicrobial resistance (AMR) control, and environmental protection.

A National Integrated One Health Surveillance and Early Warning System (BOHSEWS) will be developed for real-time disease detection. Laboratory networks, molecular diagnostics, biosafety, and lab information systems will be strengthened, alongside training programs, including sandwich PhD initiatives to build skilled professionals in epidemiology and disease surveillance.

Regional, community-level preparedness

Dr M Mushtuq Husain, scientific secretary of One Health Bangladesh, highlighted the importance of early detection and the "7-1-7" framework: detect infections within seven days, report within one day, and respond effectively within seven days.

The public health expert noted that coordinated action across human, animal, and environmental health sectors is essential to prevent pandemics.

The project also aims to enhance national surge capacity, establish an Emergency Operations Centre (EOC) network, create rapid response teams, maintain emergency stockpiles, and implement AMR control, zoonotic disease prevention, food safety, vector-borne disease control, and digital animal tracking.

Regional cooperation with South Asian countries will be strengthened through joint risk assessments,

In a fresh relief for struggling industries, the Bangladesh Bank has eased loan rescheduling conditions, allowing distressed borrowers to pay only half of the required down payment – 2% of the total outstanding loan – upfront and clear the remainder within six months.

A circular in this regard was issued today (22 February) by the Banking Regulation and Policy Department (BRPD).

The decision also allows additional time extensions and gives bank boards greater discretion over interest-related decisions. Analysts say the measures are designed to stabilise banks' balance sheets at a time when bad loans are climbing and credit growth remains weak.

The circular comes as investment has fallen to multi-year lows and construction activity has slowed sharply. Non-performing loans (NPLs) are hovering above 35%, while borrowing costs range between 14% and 16%.

Against this backdrop, the central bank's decision is widely viewed as an effort to prevent a fresh wave of defaults and give businesses breathing space during a fragile recovery.

Mashrur Arefin, chairman of the Association of Bankers, Bangladesh, said, "While temporary relief can be justified in exceptional circumstances, repeated regulatory forbearance does weaken credit discipline and harm the long-term health of the banking system."

"Capital has a real cost. Continued extensions without strong borrower commitment and equity participation create moral hazard."

"What I fear is such policy signals. They shape behaviour and expectations. They sound like politically motivated decisions," he added. "I call for accountability and market-based discipline, not dependence on repeated regulatory relief."

'Each case is unique'

Sohail RK Hussain, managing director of Bank Asia, said any rescheduling must address the root causes of default.

"If a loan is rescheduled, the root cause must be identified and addressed. If a loan has become overdue and is rescheduled for 10 years, it makes little sense. But if someone has genuinely suffered losses, then the customer must inject new equity. In that case, rescheduling can be meaningful," he said.

He added that under previous regimes, rescheduling was often granted automatically upon application.

"In the past, whenever an application came, loans were rescheduled. Customers effectively enjoyed the bank's money without paying anything. Since every case is unique, this circular gives banks flexibility, but they must implement it prudently," he said.

"If implemented properly, it will be good for the banking sector. If not, it will be harmful," he added.

A deputy managing director of a private bank, speaking on condition of anonymity, said, "Implementing this circular may help lower NPLs, but if customers or businesses do not repay properly, these policy supports will not be effective."

Under the new circular, the Bangladesh Bank also extended the deadline for special loan restructuring. The earlier deadline of 31 December has been pushed back by three months to 31 March 2026.

In addition, decisions regarding interest waivers may now be taken by the boards of the respective financing institutions, within existing policies and based on banker-customer relationships.

The Bangladesh Bank (BB) has allowed banks to facilitate the business recovery of struggling borrowers by easing down payment requirements and extending implementation deadlines under its policy support schemes.

The BB issued a circular in this regard yesterday, saying the decision was taken following applications from various banks and stakeholders seeking flexibility in implementing earlier policy instructions.

Senior bankers welcomed the decision, saying it could help distressed industries regain momentum. But they also warned that some wilful defaulters might try to exploit the softer terms.

Under the revised rules, eligible borrowers may now pay their required down payment in instalments. Half of the stipulated amount must be paid at the time of approval, with the remaining 50 percent due within six months of the effective date.

The BB also said that if policy support has already been approved but could not be implemented due to valid reasons, banks may extend the previously fixed deadline by up to three months. In addition, regarding interest-related issues, banks have been instructed to make decisions in line with existing policies, based on banker-customer relationships and applicable guidelines.

In January last year, the central bank formed a five-member committee, led by the executive director of the Department of Offsite Supervision, to provide necessary policy support for restructuring or rescheduling corporate borrowers who defaulted due to factors beyond their control.

The committee’s process of holding tripartite meetings with borrowing institutions or groups and financing institutions concluded on September 30 last year.

On September 16, the BB issued a unified special loan rescheduling policy to maintain economic growth and assist borrowers who had defaulted due to circumstances beyond their control.

About 300 companies, including top defaulter conglomerates, applied to the BB for loan rescheduling or restructuring facilities totalling around Tk 2 lakh crore in the first nine months of last year.

Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank Ltd, said the flexibility by the BB may help sick industries recover and return to business in this tough time. The economy is going through stress, he said.

However, bankers cautioned that wilful defaulters may take advantage of the policy support extended to enable sick and affected firms to return to business. As the provision has become general, there is a risk that wilful defaulters and those who did not qualify earlier will receive the support.

Anis A Khan, a former chairman of the Association of Bankers, Bangladesh (ABB), said this would give breathing space to affected businesses to restore their production and services to normal levels after the formation of an elected government.

“It is imperative that businesses take this opportunity to rebuild their frayed infrastructure,” he said.

Treasury bill yields have declined again within a month as rising liquidity in the banking sector reduces pressure on government borrowing.

At the latest auction held today (22 February), yields on treasury bills dropped by 40 to 59 basis points compared with January, with rates falling across all three tenors.

The interest rates on 91-day treasury bills stood at 10.02%, down from 10.42% on 5 January. The 182-day bills were auctioned at 10.11%, compared with 10.54% in January, while the 364-day bills fell to 10.07% from 10.66%.

Treasury bills are short-term government securities sold for periods ranging from 91 to 364 days.

Md Ezazul Islam, director general of the Bangladesh Institute of Bank Management, attributed the decline primarily to two factors.

Why T-bill interest rate crosses 10% again?

He said the Bangladesh Bank has been purchasing foreign currency reserves from commercial banks through auctions, thereby injecting liquidity into the banking system.

"Because the central bank is buying dollars from commercial banks, money is flowing back to the banks, leaving them with ample liquidity," he said.

According to Bangladesh Bank data, the central bank has purchased $5.39 billion from commercial banks through auctions in the current fiscal year.

Ezazul added that slower growth in private sector credit was the second key reason behind the fall in yields, as banks now have surplus funds. Latest data from the Bangladesh Bank show that private sector credit growth stood at 6.10% in December.

A deputy managing director of a private bank said the "massive liquidity" in the banking sector has driven down treasury bill yields, noting that dollar purchases by the central bank have increased liquidity through banking channels.

He also pointed out that deposits in the banking sector have increased compared with earlier periods, further improving liquidity conditions.

Treasury bill yields near 10% amid higher govt borrowing

Another senior official of a private bank said government borrowing has declined as implementation of the Annual Development Programme (ADP) remains slow.

In the first seven months (July-January) of the current 2025-26 fiscal year, ADP expenditure totalled Tk50,556.29 crore – the lowest in nine fiscal years. Spending has even fallen significantly compared with the period of political instability and government transition last year.

In September 2025, treasury bill yields had dipped below 10%. At that time, the interest rate on 10-year treasury bonds fell by 246 basis points within three months, marking the first time in two years that the rate dropped below the 10% threshold.

Bangladesh Bank has purchased $5.38 billion from the foreign exchange market so far in fiscal year 2025-26, reflecting continued efforts to manage liquidity and stabilise the exchange rate.

The central bank bought $123 million from eight commercial banks at a cut-off rate of Tk 122.30 per US dollar yesterday.

With the latest intervention, total dollar purchases in February reached $1.448 billion.

The central bank has been buying the US dollar in recent months amid improved inflows and easing pressure on the foreign exchange market.

Between FY21 and FY25, Bangladesh Bank sold more than $25 billion from its foreign exchange reserves to meet import payments for fuel, fertiliser and food.

However, it has resumed purchasing dollars since the beginning of the current fiscal year as supply increased on the back of higher export earnings and remittance inflows.

Since July, the taka has appreciated against the US dollar.

The country’s foreign exchange reserves have continued to rise due to the central bank’s steady dollar purchases.

Reserves stood at $30.06 billion on February 19 this year, as per the International Monetary Fund (IMF) calculation, up from $20.79 billion on the same date a year ago, according to Bangladesh Bank data.

The Bangladesh Energy Regulatory Commission (BERC) has cut furnace oil prices for public and private power producers and industries by 18 percent, from Tk 86 to Tk 70.10 per litre.

The commission set the rate for the first time yesterday, following a public hearing last month. Previously, the Bangladesh Petroleum Corporation (BPC) used to determine the price on its own.

BPC sells around 8-9 lakh tonnes of furnace oil annually, mainly to public power generation companies, as well as to some private power producers and industries.

At a hearing on January 29, the Bangladesh Power Development Board (BPDB) alleged that BPC had charged up to Tk 644 crore more than the actual supply cost over the past one and a half years.

BPDB officials said BPC maintained a fixed price of Tk 86 per litre during the period, although its procurement cost ranged between Tk 57 and Tk 83 per litre in different months.

The BPDB proposed setting the price at Tk 50.83 per litre.

In contrast, BPC proposed cutting the price by Tk 1 to fix it at Tk 85 per litre.

According to the BERC decision, the margin and transmission charges for oil companies Padma, Meghna, Jamuna and Standard Asiatic Oil Company Limited are Tk 0.71 and Tk 1.20, respectively.

The new rate comes into effect from 12am today.

The Trading Corporation of Bangladesh (TCB) incurred a deficit of around Tk1,412 crore in fiscal year 2024-25 from subsidised sales of sugar, soybean oil and lentils under its family card and open truck programmes.

The commerce ministry has written to the finance ministry seeking release of funds to cover the shortfall.

In a letter today (22 February), Commerce Secretary Mahbubur Rahman said the import and local procurement costs and sale prices of TCB products for FY25 were properly audited. According to the audit report, the subsidy claimed by TCB is justified.

To support low-income groups, the government supplies essential commodities once a month at subsidised prices through TCB family cards. Cardholders receive two litres of soybean oil, two kilograms of lentils, one kilogram of sugar and five kilograms of rice. Additional items are sometimes included.

According to TCB data, soybean oil is sold at Tk100 per litre, sugar at Tk70 per kilogram and lentils at Tk60 per kilogram. However, procurement costs, storage expenses and dealer commissions result in total costs exceeding the selling price.

TCB currently has more than 4.5 million family cards. In special situations, products are also sold through open trucks, although prices in truck sales are slightly higher.

A senior TCB official said the total annual subsidy, including Ramadan items, rice and onions, amounts to around Tk3,500 crore. However, soybean oil, sugar and lentils are the main items under the family card scheme, and their subsidy is calculated separately.

He warned that without timely release of subsidy funds, it would not be possible to procure these essential items on schedule.

Leo ICT Cables PLC has withdrawn its application to raise Tk7 crore from the SME platform of the stock market, stepping back amid political and economic uncertainties ahead of the national election.

According to sources at the Bangladesh Securities and Exchange Commission, the company pulled out its proposal after reassessing market conditions. A senior commission official, speaking on condition of anonymity, said the decision was taken after considering the prevailing political and economic situation.

In October last year, the company had applied to issue seven million shares to raise Tk7 crore from the SME platform. The issue manager for the proposal was AAA Finance & Investment Limited.

The official also said since the current commission has not approved any initial public offerings (IPOs) or Qualified Investor Offers (QIOs) so far, the company likely reassessed the overall situation and decided to step back for now.

The official added that only one SME application is currently pending — that of Brain Station 23 PLC.

Leo ICT Cables had planned to raise funds from the market to expand its production capacity and strengthen its capital base.

The company's paid-up capital stands at Tk32.58 crore. For the year ended 30 June 2025, it reported revenue of Tk37 crore, up from Tk30 crore in the previous year. During the same period, profit after tax rose to Tk5 crore, compared to Tk3.09 crore a year earlier. Earnings per share (EPS) stood at Tk1.67.

According to information available on its website, Leo ICT Cables is a technology-driven manufacturing company in Bangladesh. It produces fiber optic cables, high-quality lithium-ion batteries, and Optical Networking Units (ONU). Its factory is located at Kaliakoir Hi-Tech Park in Gazipur under the Bangladesh Hi-Tech Park Authority.

The company says its fibre optic cables are engineered for high performance, reliability, and durability, forming a critical backbone of Bangladesh's digital and internet infrastructure. It also positions its lithium-ion batteries as efficient, long-lasting, and safe energy solutions, built to meet international standards and support growing power demands.

With modern machinery sourced from global suppliers and a skilled team of engineers and technicians, the company maintains strict quality control and timely delivery for both domestic and international markets. Through its products, Leo ICT Cables aims to contribute to a more connected, sustainable, and technology-driven Bangladesh.

The Dhaka stock market ended the week on a positive note, with National Bank emerging as the top gainer, while Islami Bank Bangladesh PLC stood as the worst-performing stock.

National Bank registered a strong 29.27% weekly return, closing at Tk5.30, driven by notable investor interest in banking stocks.

Bangladesh Industrial Finance Company (BIFC) followed with a 28.57% gain to settle at Tk3.60. S Alam Cold Rolled Steels Limited continued its recent rally, advancing 27.50% to Tk15.30 despite persistent financial concerns.

Other significant gainers included Fareast Finance and Premier Leasing, both rising 27.27% to Tk1.40 each. Prime Finance climbed 22.73% to Tk2.70, while Daffodil Computer gained 22% to close at Tk56.

Infographic: TBS
Infographic: TBS

Meanwhile, Familytex and Tung Hai Knitting each posted 20% gains, ending the week at Tk1.80 and Tk2.40, respectively. Shurwid Industries advanced 19.61% to Tk6.10.

On the losing side, Islami Bank Bangladesh PLC declined 12.28% to close at Tk45.70, topping the losers' chart. ICB Islamic Bank fell 10.71% to Tk2.50, while Midas Finance shed 9.38% to Tk6.40.

Al-Arafah Islami Bank lost 9.09% to Tk16, and Union Capital dropped 8.89% to Tk4.10. Crystal Insurance retreated 8.53% to Tk77.20, while Asiatic Laboratories Limited fell 7.89% to Tk63. Phoenix Finance also declined 7.50% to Tk3.70.

The benchmark DSEX index extended its upward trend for the fifth consecutive week, supported by strong post-election optimism at the start of trading.

Following the election holidays, trading resumed with broad-based buying pressure that pushed the index past the 5,600-mark for the first time in nearly six months.

However, EBL Securities, in its weekly market review, noted that the initial enthusiasm moderated in later sessions as investors engaged in profit-booking and adopted a cautious stance, closely watching policy signals and regulatory developments under the newly elected government.

By the end of the week, DSEX gained 66 points, or 1.2%, to settle at 5,466. Market participation remained strong, with average daily turnover rising to Tk1,050 crore.

Sector-wise, the banking sector dominated trading activity, accounting for 20.7% of total turnover, followed by pharmaceuticals at 16.3% and textiles at 10.2%.

Most sectors posted positive returns during the week. The paper sector led gains with a 5.3% increase, while IT and ceramics rose 3.3% and 3.2% respectively. In contrast, the jute sector emerged as the worst performer, declining 3%.

The dollar declined in volatile trading on Friday and was poised to snap a four-session streak of gains after the US Supreme Court struck down President Donald Trump’s sweeping tariffs based on a national emergency law.

The justices, in a 6-3 ruling authored by conservative Chief Justice John Roberts, upheld a lower court’s decision that the Republican president’s use of this 1977 law exceeded his authority.

The dollar was initially higher on the day after US economic data showed a higher-than-anticipated inflation reading while economic growth fell well short of expectations.

The Commerce Department said gross domestic product increased at a 1.4 percent annualized rate last quarter, much lower than the 3 percent growth pace estimate of economists polled by Reuters. Analysts noted, however, that the number was negatively impacted by the government shutdown.

“The majority of this week has been dollar positive, except for right now, and why I’d say the ‘sell America’ trade got a little ahead of itself,” said Erik Bregar, director of FX and precious metals risk management at Silver Gold Bull in Toronto.

“We have to see how Trump responds, how (Treasury Secretary Scott) Bessent responds, how the administration responds. We’ve heard all this talk that they have other ways of instituting these tariffs.”

Trump said in a briefing after the ruling that he would sign an order to impose a 10 percent global tariff under Section 122 of the 1974 Trade Act and would initiate several other investigations as well, while Bessent said that estimates by the department show the use of section 122 authority, combined with potentially enhanced section 232 and section 301 tariffs will result in virtually unchanged tariff revenue in 2026.

Separately, the personal consumption expenditures price index, excluding the volatile food and energy components, rose 0.4 percent, the Commerce Department said, after an unrevised 0.2 percent gain in November and above the 0.3 percent estimate. It rose 3 percent in the 12 months through December after a 2.8 percent climb in November.

Tianford Bangladesh Textile Co Ltd, a China (Hong Kong)-based firm, is set to establish a readymade garment (RMG) manufacturing unit inside Nilphamari’s Uttara Export Processing Zone (EPZ) with an investment of $19.59 million.

The company signed a land lease agreement with the Bangladesh Export Processing Zones Authority (Bepza) yesterday at the Bepza Complex in Dhaka, according to a press release.

The project is expected to create employment opportunities for 3,254 Bangladeshi nationals.

On 24,000 square metres of land, the company will manufacture 7 million pieces of woven and knit garments annually, including bottoms, shirts, jeans, jackets, and sweaters.

The products will be exported to major global markets, including the USA, Canada, Japan, China, Australia, Brazil, the UK, and the EU.

The company will manufacture 7 million pieces of woven and knit garments annually, including bottoms, shirts, jeans, jackets, and sweaters
Md Tanvir Hossain, executive director for investment promotion of Bepza, and Ge Zhenyu, nominee director of Tianford Bangladesh Textile, signed the agreement on behalf of their respective organisations.

Bepza Executive Chairman Major General Mohammad Moazzem Hossain, who witnessed the signing, said the new government has assumed office with a strong focus on promoting investment.

He reaffirmed Bepza’s commitment to providing modern, investor-oriented services and encouraged the firm to source quality raw materials locally to strengthen domestic industries.

Ge Zhenyu expressed confidence in Bangladesh as an attractive destination for global investors. He informed that factory construction will commence in April this year, with exports expected to begin next year.

From Bepza, Md Imtiaz Hossain, member (engineering); ANM Foyzul Haque, member (finance); Md Tanvir Hossain, executive director (investment promotion); and Mohammad Anamul Haque, project director, were also present at the signing ceremony.

Bangladesh’s plea for deferment of graduation from the group of Least Developed Countries (LDC) category is likely to be discussed at the five-day meeting of the UN Committee for Development Policy (CDP) beginning in New York today.

Before leaving the country to attend the meeting, Debapriya Bhattacharya, head of the Enhanced Monitoring Mechanism (EMM), a body of the UN CDP, said they will set up an evaluation process for Bangladesh’s plea for LDC deferment for three more years.

Debapriya, who is also a distinguished fellow of the Centre for Policy Dialogue (CPD), said the request will be assessed based on recent socio-economic data, cross-country experiences and progress of the implementation of the Smooth Transition Strategy (STS), the guidebook of the LDC graduation.

UN CDP members will also widely discuss the country statements of graduating and recently graduated countries. Bangladesh submitted a country statement to the UN CDP describing the country’s economic situation in November last year.

Bangladesh is scheduled to graduate from LDC to a developing nation on November 24 this year, as the country has passed all three required criteria for two consecutive assessments, and the third assessment is ongoing.

However, the newly formed government sent a letter to the UN CDP on Wednesday requesting a deferment of the country’s graduation for three more years, as local businessmen have urged for more time to take extensive preparations for a smooth graduation.

Currently, Bangladesh enjoys zero-duty access for 73 percent of its exports as part of LDC provisions. After LDC graduation, this preferential market access will be lost, and Bangladesh may lose 14 percent of its exports or $8.0 billion worth of business in a year, different studies have suggested.

Nepal and Lao PDR are also scheduled to graduate along with Bangladesh this year, but they have not applied for deferment.

The National Board of Revenue (NBR) has started budget-related work for the fiscal year 2026-27 and has sought proposals from business bodies and other relevant organisations.

According to the NBR, letters have already been sent on 18 February from the budget-related departments asking them to submit their proposals and recommendations on the budget to the NBR by 15 March.

In a letter to the business bodies, signed by Barrister Badruzzaman Munshi, second secretary of the NBR's VAT wing, the agency said, "You are requested to send your organisation's opinions with the aim of rationalising the tax-to-GDP ratio, facilitating ease of doing business, and resolving procedural complexities."

Sources at the NBR said pre-budget discussions with business representatives and other stakeholders may begin by the last week of this month in preparation for the next budget. To this end, the NBR has also formed a committee, appointing a first secretary of NBR as the chief budget coordinator, sources said.

This will be the first budget for the new government led by the BNP. Although budgets during the previous two BNP governments were prepared under the leadership of late finance minister M Saifur Rahman, this time the budget will be prepared under the leadership of Finance Minister Amir Khasru Mahmud Chowdhury.

He has already provided preliminary directions during a meeting held last Saturday with officials from the NBR and other relevant departments regarding the budget, according to officials.

Dhaka Stocks has lost momentum after an initial post-election rally, as institutional investors adopted a cautious stance amid growing expectations of a leadership change at the capital market regulator – a long-standing demand of retail investors.

The newly formed government has already begun searching for a new Bangladesh Securities and Exchange Commission (BSEC) chairman, as the existing commission, formed during the interim administration and headed by Khondoker Rashed Maqsood, failed to restore investor confidence.

The regulator is also likely to undergo restructuring, according to officials familiar with discussions at the finance ministry, as policymakers seek broader structural reforms in a market that has underperformed relative to the country's economic growth, frustrating both local and foreign investors.

Finance ministry sources said several private-sector professionals, along with a professor from the University of Dhaka, have shown interest in leading the commission. However, capital market stakeholders said they favour market-oriented leadership from the private sector due to bitter past experience.

The benchmark DSEX index climbed nearly 200 points to a five-month high on 15 February – the first trading session after the BNP's landslide victory in the 13th national election – reflecting initial investor optimism over the new government.

The upward trend, however, proved short-lived. The market turned negative from the very next session amid uncertainty over whether the existing commission would remain in place.

Finance Minister Amir Khosru Mahmud Chowdhury also hinted at restructuring the regulator in a recent comment, saying the current upward trend may reflect expectations of a democratic government, but stressing that only sustainable, structural reforms can ensure long-term stability.

Speaking to journalists at his residence in Mehedibag, Chattogram, on Friday – during his first visit to the port city after taking the oath as a minister in the new government – Khosru said temporary gains driven by sentiment would not bring fundamental change to the capital market.

The minister said the government planned comprehensive reforms, including amendments to laws and regulatory frameworks, while strengthening the role of the BSEC. He stressed the need to improve regulatory effectiveness, enhance transparency and adopt a zero-tolerance stance against irregularities.

Khosru also said efforts would be made to bring fundamentally strong and profitable companies to the stock market and attract both domestic and foreign investment funds to improve liquidity and rebuild investor confidence.

Investors seek market-friendly leadership

A senior banker at a private commercial bank told The Business Standard that the sharp rise on the first trading day after the election reflected investor confidence, particularly as shares linked to BNP-aligned business groups recorded notable gains.

Wishing not to be named, the banker said investors are expecting a restructuring of the commission, as the current chairman is seen as not market-friendly and has been unpopular from the outset due to creating distance from stakeholders.

"The government should appoint someone market-oriented to lead the regulatory body, either from market participants or from academia, like a finance professor," the official said.

Former banker Khondoker Rashed Maqsood assumed office as BSEC chairman following the regime change on 5 August 2024. During his roughly one-and-a-half-year tenure, he faced repeated protests from investors who accused the regulator of failing to revive market performance.

Stakeholders said trading activity weakened as key market players distanced themselves from the regulator, resulting in persistently low turnover. Moreover, no new initial public offerings (IPOs) entered the market under his leadership, further straining merchant banks.

Maqsood's commission also imposed what many described as unrealistic fines totalling nearly Tk1,000 crore on various companies and individuals over past corruption and market manipulation, creating negative sentiment among investors.

Longstanding governance concerns

While Asian frontier markets have grown rapidly, Bangladesh has lagged behind over the past 15 years under the leadership of former BSEC chairmen M Khairul Hossain and Shibli Rubayat Ul Islam, who critics say failed to establish proper governance in the market.

Both were finance professors at Dhaka University and faced allegations of corruption and collusion in market manipulation with certain stakeholders.

Shibli Rubayat, who resigned in August last year following the regime change, was arrested in February in a corruption case filed by the Anti-Corruption Commission (ACC).

He was also permanently barred by the BSEC from all capital market activities over his involvement in a share price manipulation scheme linked to Padma Printers and Colour.

Khairul Hossain, who led the regulator from 2011 to early 2020, was criticised for approving numerous financially weak companies for IPOs, often at inflated prices, which analysts say eroded investor confidence despite strong macroeconomic growth at the time.

His successor, Shibli, who took charge in 2020, was accused of shifting focus away from strengthening the primary market and instead fostering alleged collusive ties with certain market players and insider traders, prioritising short-term gains in the secondary market over long-term stability.

Following what stakeholders describe as unsuccessful leadership by academic appointees, market participants are urging the government to choose a chairman with both technical market knowledge and public policy understanding.

A merchant banker, speaking on condition of anonymity, said investor distrust in the existing commission was evident in market performance during the interim government period.

He added that while university professors may have theoretical expertise, they often lack the practical experience of private sector players. He suggested the new commission should include a mix of academics and private sector professionals to help restore investor confidence.

The benchmark index of the Dhaka Stock Exchange rebounded slightly today (22 February), ending a four-session losing streak that began after the national election.

The DSEX, the bourse's main index, inched up by 2 points to close at 5,468. The modest gain came after sustained selling pressure in the previous four sessions, during which the index had fallen sharply amid post-election uncertainty and cautious investor sentiment.

The blue-chip DS30 index, which tracks 30 leading companies, performed relatively better, rising 6 points to settle at 2,104. The increase indicates selective buying interest in large-cap stocks, particularly those with strong fundamentals. In contrast, the Shariah-based DSES index slipped slightly by 0.30 points to close at 1,095, reflecting mixed performance among Shariah-compliant securities.

Market analysts attributed the modest recovery in the DSEX to bargain hunting by investors after consecutive declines. However, overall market movement remained subdued, signaling ongoing caution. Investors are carefully monitoring political developments and economic signals before taking significant positions.

Turnover on the Dhaka Stock Exchange rose by 1.43% to Tk568 crore, up from Tk560 crore in the previous session. Despite the slight rebound, both turnover and participation remained moderate, indicating that investor confidence has yet to fully recover.

Of the 388 issues traded during the session, 123 advanced, 194 declined, and 71 remained unchanged, showing a continued dominance of losing stocks. Analysts noted that the cautious sentiment reflects investor concerns over the post-election political and economic landscape.

Many investors preferred to remain on the sidelines, waiting for clearer signals regarding policy direction and the formation of a new securities commission. Uncertainty over regulatory leadership and upcoming reforms has also weighed on market sentiment.

Institutional investors appeared particularly hesitant to take fresh positions without greater clarity on policy continuity and market stabilization measures. Over the past year, prolonged political uncertainty and a series of regulatory decisions that failed to restore investor confidence have contributed to a sustained market downturn.

Retail investors exited the market in significant numbers, while institutional and high-net-worth investors largely remained inactive, causing the share prices of several fundamentally strong companies to decline.

Large-cap sectors displayed mixed performance today. The banking sector led the gains, rising 0.91%, followed by non-bank financial institutions (NBFIs) with a 0.59% increase. The Food & Allied sector gained 0.15%, and Telecommunication edged up 0.08%.

In contrast, Fuel and Power fell 0.27%, Engineering declined 0.32%, and Pharmaceuticals dropped 0.73%. Block trades contributed 2.9% of the overall market turnover, highlighting selective large-volume transactions amid cautious trading.

Overall, Sunday's slight recovery offers limited relief, and the market remains sensitive to political developments, regulatory clarity, and macroeconomic updates. Investors are likely to continue taking a cautious approach in the coming sessions until more stable conditions emerge.

The Chittagong Stock Exchange (CSE) also closed lower, as the CSCX index down 16 points to 9,413, while the CASPI index shed 47 points to close at 15,302, reflecting negative sentiment across both bourses.

US investors are pulling money out of their own stock market at the fastest pace in at least 16 years as Big Tech returns fade and better-performing overseas markets look more attractive.

In the last six months, US-domiciled investors have pulled some $75 billion from US equity products, with $52 billion flowing out since the start of 2026 alone, the most in the first eight weeks of the year since at least 2010, according to LSEG/Lipper data.

The shift comes despite a weakening of the dollar against other currencies, which makes buying overseas assets more expensive for US investors. It's a compelling sign that the diversification away from US assets by some international investors in the past year is gaining traction among US investors.

Since the global financial crisis ended in 2009, the "buy America" trade has rewarded investors at home and abroad thanks to a strong economy and earnings growth and dominance in the tech sector leading to outsized gains in US stocks.

More recently, the AI boom pushed the S&P 500 index to record highs last year, a strong buffer from US President Donald Trump's unpredictable approach to trade policy and diplomacy, as well as his attempts to undermine Federal Reserve independence.

Looking further afield

But as concerns have grown about the possible risks from AI, as well as the costs involved, the lure of Wall Street stocks has ebbed. The surge in value in the US megacap tech stocks that have led gains until now are making investors pickier and many are spotting more attractive opportunities elsewhere.

Bank of America's 20 February fund manager survey showed investors switched from US equities to emerging market equities at the fastest rate in five years.

"I've had lots of conversations with our wealth business in the US this year," said UBS's head of European equity strategy and global derivatives strategy Gerry Fowler.

"They're all talking about investing more offshore because at the end of the year, they looked at the performance of foreign markets in dollars and they're like, wow, I'm missing out."

US investors have poured some $26 billion into emerging-market equities so far this year, with South Korea the largest single country destination, with an inflow of $2.8 billion, followed by Brazil, with $1.2 billion, LSEG/Lipper data shows.

One of the clear results of Trump's policies has been the 10% decline in the dollar against a basket of currencies since last January. While that is a disadvantage for US investors hunting for opportunities abroad, dividends in dollar terms from better performing overseas markets will also be plumped up.

In the last 12 months, the S&P 500 has risen around 14%. In dollar terms, Tokyo's Nikkei is up 43%, Europe's STOXX 600 has surged 26%, Shanghai's CSI 300 has returned 23% and Seoul's KOSPI has doubled in value.

Investors are also re-evaluating the seemingly unstoppable rally in the shares of artificial intelligence powerhouses like Nvidia, Meta and Microsoft and the risks posed by sky-high valuations. They are seeking 'value' in traditional industrial companies and defensive stocks which can feature heavily in some overseas equity markets such as those in Germany, the UK, Switzerland or Japan.

Value and valuation

Laura Cooper, global investment strategist at Nuveen, said the rotation on Wall Street away from tech and other so-called growth stocks into value stocks is playing out on a global level.

"Increasingly we are seeing US investors look at the global landscape from a valuation perspective," she said, flagging the cyclical growth upswing predominantly in Europe and Japan.

European banking stocks, one example of cyclical stocks that typically benefit when economic growth picks up, surged 67% last year and are up a further 4% so far in 2026.

"When you overlay the valuation story with the growth story, we are seeing that rotation for US investors as well," Cooper added.

US stocks are still far more expensive than those elsewhere. The S&P 500 trades at roughly 21.8 times the expected earnings of its components, while stocks in Europe trade at roughly 15 times forward earnings and those in Japan and China trade at 17 and 13.5 times respectively.

Kevin Thozet, portfolio adviser at Carmignac, said his team have observed that flows of US capital moving into Europe have accelerated since around mid-2025.

LSEG/Lipper data shows that since Trump's inauguration in January last year, US-domiciled investors have poured nearly $7 billion into European equity products, compared with an outflow of roughly $17 billion during the four years of Trump's first term from 2017 to 2021.

"If I'm taking a very long-term view, it's, maybe, this idea of a great global rotation," Thozet said.

The government will hold talks with the United States Trade Representative (USTR) this week to determine whether the recently signed bilateral trade deal remains valid after America’s Supreme Court struck down a large swathe of President Donald Trump’s tariffs on Friday.

The US top court, in its ruling, declared that Trump had exceeded his authority under the International Emergency Economic Powers Act (IEEPA) by imposing sweeping reciprocal tariffs without congressional approval. The ruling limits the president’s authority to impose tariffs under the law, and it is unclear whether agreements concluded under that authority remain valid.

Speaking to The Daily Star over the phone, Commerce Secretary Mahbubur Rahman said, “Firstly, we will observe their position and status of the previous trade agreement with the US.”

“We will also hold stakeholder meetings with the local business community to let them know about the agreement and the latest situation,” he added.

The interim government signed the American Reciprocal Tariff (ART) agreement on February 9, just three days before national elections, committing Bangladesh to importing substantial volumes of American goods to narrow the bilateral trade gap.

The haste was deliberate. When President Donald Trump announced his “Liberation Day” tariffs in April last year, setting Bangladesh’s rate at 37 percent, Dhaka watched rival exporters such as Vietnam and China move quickly to negotiate lower rates. Bangladesh eventually secured a 19 percent tariff after signing the deal.

Two pressures drove the rush, according to Secretary Rahman. The tariff rates being offered to competing countries were uneven, and Washington was pushing for a quick signature before a new government took office and potentially stalled negotiations.

Now, with the US court ruling, the legal ground has shifted.

“We will have to talk with the USTR first about whether the already signed agreement will be cancelled or not, as the deal was signed in reference to the presidential power under IEEPA,” Rahman said.

Meanwhile, following the court ruling, Trump slapped a new 15 percent tariff on all US imports and ordered new trade investigations that could lead to additional levies in the coming months, while insisting that trade and investment deals reached with nearly 20 countries -- most with higher tariffs -- should remain untouched.

Dhaka is proceeding carefully. If the new 15 percent universal tariff applies equally to all countries, Bangladesh sees little urgency to re-engage.

“In that case, Bangladesh will delay in negotiations with the US,” said the secretary, noting that should discriminatory rates re-emerge, the government intends to move quickly to secure a lower ceiling.

“This time Bangladesh will not send any letter quickly as it did earlier, and the government will go slowly now,” he added.

The USTR, for its part, signalled on February 20 that it intends to press ahead with Trump’s trade agenda by other means.

In a statement, it noted that between April and December 2025, America’s goods trade deficit fell 17 percentage points from a 40 percent deficit, in part due to deals that kept protective tariffs in place while opening foreign markets to American exports.

The office said it would launch fresh investigations under Section 301 of the Trade Act of 1974, targeting practices it deems unfair, including industrial overcapacity, forced labour, pharmaceutical pricing, and discrimination against American technology firms.

“Our partners have been responsive and engaged in good-faith negotiations and agreements despite the pending litigation, and we are confident that all trade agreements negotiated by President Trump will remain in effect,” the USTR said.

The American Apparel and Footwear Association, in a separate statement issued on February 20, struck a different note, welcoming the court’s ruling and calling for swift refunds of tariffs it described as unlawfully collected.

“We are confident in Customs and Border Protection’s (CPB) ability to move quickly and provide clear guidance to American businesses on how to obtain refunds for tariffs that were unlawfully collected,” said Steve Lamar, the association’s president and chief executive.

“CBP’s recently modernised, fully electronic refund process should help to expedite this effort,” he added.

Current 2.0-percent mandatory down payment to get default loans regularised has been halved in a latest government measure to stem non-performing loan (NPL) buildup in Bangladesh's banking sector.

Bangladesh Bank (BB) Sunday issued a notification to this effect further easing the loan-rescheduling facility for the struggling borrowers under the policy supports.

The banking regulation and policy department of the central bank sent in the instructions to the commercial banks, directing them to allow half of the 2.0 per cent of the outstanding loans as down payment. And the remaining portion of the down payment may be collected within the next six months.

Under the existing regulation of the loan-rescheduling facility, the borrowers need to pay 2.0 per cent of their unpaid loans as down payment to avail of the facility. But the borrowers will not be allowed to show a paid loan installment or its part before submission of the application as special down payment.

Seeking anonymity, a BB official has said there are many banks which informed them that many borrowers who received policy supports have faced difficulties in paying 2.0-percent down payment in one go. As a matter of fact, the banks kept requesting them to relax the regulation.

"Considering their request, the central bank issued the instruction to the commercial lenders about the latest change in the down payment to facilitate the proceeding," he told The Financial Express.

The central banker also informed that they also extended the timeframe of executing the policy-support-related issues by three more months until March next.

On condition of not being quoted by name on the sensitive affairs, the managing director and chief executive officer of a private commercial bank said they had provided policy support to a group of classified borrowers under the BB-introduced policy-support mechanism under the BRPD circular-7.

But many of them cannot afford to pay 2.0 per cent of their outstanding loans as down payment in one go and the situation remains same to other commercial banks, according to him.

"So, we could not settle them (the borrowers). That's why the BB came up with such relaxation. This is a good move. Now we will be able to execute the loan-rescheduling facility," the seasoned banker said.

The BB allowed commercial banks to offer special rescheduling facility for up to 10 years with a two-year grace period to borrowers whose loans are classified as of December 2025, under a generous government bailout package, according to the banking regulators' policy-support-related circular.

Meanwhile, burgeoning NPLs stand as a serious concerns for the banking industry as the volume of classified loans accumulated to Tk 6.44 trillion by end of September last year-almost 36 per cent of the entire loans disbursed.

Amid growing NPLs, the central bank provided various facilities like policy supports to the struggling borrowers and partial write-off facility. The banking regulator keeps advising the banks to properly use the facilities to contain the growth of NPLs in the industry.

According to the BB sources, the NPL ratio was brought down to 30 per cent by end of December last. Now, the BB has asked the commercial banks to pay high focus on execution of the available facilities to cut it down below 25 per cent by upcoming March and it believes the down-payment-relaxation will help get to the goal.

Former lead economist of World Bank's Dhaka Office Dr Zahid Hossain says down payment is a pre-commitment of the borrowers to recovering the loss of credibility.

He terms 2.0-percent down payment very generous to begin with. "If you don't have this economic viability, how we can believe that they will repay the loans," he says.

"I also don't understand why the bankers are happy with such relaxation. It is good news for the default borrowers," the economist adds.