Breaking a prolonged bearish spell since the onset of the Middle East conflict, Dhaka stocks rallied strongly today (8 April), with turnover and indices surging as investor sentiment rebounded after the United States and Iran agreed to a conditional two-week ceasefire.

US President Donald Trump said late on Tuesday that he had agreed to suspend attacks on Iran for two weeks after holding discussions with Pakistan, easing fears of an extended conflict.

The benchmark DSEX index of the Dhaka Stock Exchange jumped 3.12%, or 161 points, marking its highest single-day gain since 15 February.

Dhaka stocks extend rally as turnover jumps 27%

According to DSE data, stocks had rallied sharply on 15 February, the first trading session after the BNP's landslide victory in the 13th national election, when DSEX climbed 200 points, or 3.71%, amid a surge in investor participation.

Today, turnover – a key market indicator – surged 66% to Tk991 crore, the highest in seven weeks. Market breadth was overwhelmingly positive, with 93% or 367 of listed stocks advancing and 21 hitting the upper price limit.

The Shariah-based DSES index rose 2.88%, or 30 points, to 1,075, while the blue-chip DS30 index gained 2.77%, or 55 points, to close at 2,026.

Market data showed stocks opened sharply higher, with the DSEX rising 140 points within the first three minutes of trading. The upward momentum persisted throughout the session, closing at 5,317 points with a strong gain.

Following the outbreak of the US-Israel war on Iran on 28 February, the country's stock market entered a bearish phase, with most trading sessions ending in declines as persistent sell-offs eroded equity values amid fears of a prolonged conflict and its adverse economic impact.

Market insiders said investors had largely stayed on the sidelines in recent weeks due to prolonged uncertainty. The ceasefire announcement prompted a return of confidence, encouraging fresh inflows into equities.

They added that amid heavy sell-offs, many fundamentally strong stocks experienced significant value erosion. However, as the ceasefire reduced uncertainty, investor confidence improved, prompting a renewed flow of funds into the market.

EBL Securities, in its daily market commentary, said the capital bourse witnessed a strong resurgence as the announcement of a two-week ceasefire deal between Iran and the USA sparked optimism across the trading floor, triggering renewed accumulation of the beaten-down scrips in anticipation of improved market momentum amid easing geopolitical concerns.

"Market indices tracked a firm upward trajectory from the outset of the session with predominant buying interest, while investor participation strengthened steadily as the session progressed, driving broad-based price appreciation across most of the scrips," it added.

First Finance topped the gainers' list, with its shares rising 10% to close at Tk5.5 each – the maximum daily price increase – followed by ICB Islami Bank, which also gained 10% to Tk3.3, Bangas Limited up 10% to Tk134.2, BD Lamps up 9.96% to Tk157.8, and Khan Brothers PP Woven Bag Industries up 9.93% to Tk54.2.

Meanwhile, only 11 stocks declined. Techno Drugs led the losers, slipping 1.07% to Tk36.9 per share, followed by Apex Spinning Mills, Meghna PET Industries, Janata Insurance, and Summit Alliance Port.

On the sectoral front, pharmaceuticals and chemicals stocks accounted for the largest share of turnover at 15.6%, followed by engineering at 12.7% and banking at 12.6%. All sectors posted gains, with jute stocks exhibiting the most positive returns on the bourse.

The Chittagong Stock Exchange (CSE) also ended higher, with its Selective Categories Index (CSCX) and All Share Price Index (CASPI) rising by 192.5 points and 328.3 points, respectively.

The US-Israel war on Iran, before reaching a ceasefire agreement just yesterday, highlighted a longstanding vulnerability of Bangladesh – Bangladesh's only refinery, Eastern Refinery Limited (ERL), has not been significantly modernised or expanded in more than five decades.

This issue had also surfaced during the Russia-Ukraine war in 2022, when attempts to process Russian crude failed due to the refinery's outdated configuration. Despite that experience, little progress was made in upgrading its capacity.

As the Iran war disrupted supplies from the Middle East — the country's primary source of oil and gas imports, the state-run Bangladesh Petroleum Corporation (BPC) has started exploring crude options beyond Middle Eastern countries, while also seeking technical recommendations from Eastern Refinery on suitable crude specifications.

Since ERL cannot process all types of crude oil, the BPC is carefully assessing transport costs, compatibility and by-product impacts before moving ahead with imports from new sources.

Former caretaker government adviser and energy expert M Tamim said the Middle East remains the most cost-effective source due to proximity, but stressed that the planned second unit of ERL must include modern facilities capable of refining a wider range of crude types to ensure energy security during crises.

Search for alternatives intensifies

Apart from closing the Strait of Hormuz, the Middle East war also caused output cuts in the region's major energy facilities, resulting in force majeure by key suppliers for Bangladesh.

In March, shipments of crude oil from Saudi Arabia and Abu Dhabi – each carrying around 1 lakh tonnes – were cancelled. As a result, Bangladesh did not receive any crude consignments during the month. Authorities have since secured a replacement shipment from Saudi Arabia's Yanbu port for next month, though at a slightly higher cost of about $0.25 per barrel.

According to ERL officials, the refinery was originally designed to process Arabian Light crude from Saudi Arabia and Murban crude from the UAE. Heavier crude types, such as those from Russia, cannot be refined using the existing setup. With no blending facility in place, the refinery lacks flexibility to adapt to alternative sources.

To address this, ERL has analysed crude specifications from several countries – including Nigeria, Azerbaijan, Norway, Angola, and the UK – and submitted its findings to BPC. The corporation is now reviewing these options, considering both economic and technical feasibility.

BPC General Manager (Commercial and Operations) Muhammad Morshed Hossain Azad said work on alternative sourcing is ongoing, adding that maintaining a diversified supply line will be important even if the geopolitical situation stabilises.

Capacity constraints remain a major concern

Bangladesh imports between 65 lakh and 68 lakh tonnes of fuel annually, with crude oil accounting for about 15 lakh tonnes — all refined at ERL. The country also imports around 45 lakh tonnes of refined fuel, mainly diesel, from countries like India and China.

Despite rising demand, refining capacity has remained stagnant since independence. This has forced Bangladesh to rely heavily on costly refined fuel imports, increasing pressure on foreign currency reserves.

A long-delayed project to build ERL's second unit – which would double refining capacity to 30 lakh tonnes annually – has faced repeated setbacks. Although the project was first proposed in 2010 and approved in various forms over the years, it took more than a decade and a half to receive final approval.

The project, now estimated to cost around Tk31,000 crore, was approved by the Executive Committee of the National Economic Council (Ecnec) in December last year. Authorities are exploring financing options, including potential loans from external sources such as the Islamic Development Bank.

Officials say the new unit will be designed with greater flexibility to process a wider range of crude oil, addressing one of the key weaknesses of the current refinery.

Until then, Bangladesh remains exposed to global supply shocks — with limited capacity to adapt quickly when its primary fuel sources are disrupted.

A ceasefire in the Iran war will deliver badly-needed relief to economies battered by the world's worst ever energy crisis, but hopes the truce will quickly restore normal oil and gas flows from the Middle East are almost certainly misplaced.

US President Donald Trump on Tuesday agreed to a two-week ceasefire, conditional on Iran pausing its blockade ​of oil and gas shipments through the Strait of Hormuz, the narrow waterway that typically handles about one-fifth of global oil trade. Iran's foreign minister Abbas Araqchi said Tehran ‌would halt counter-attacks and guarantee safe passage for vessels transiting the strait.

How quickly the ceasefire will take full effect, however, remains unclear. Iran launched further attacks on Israel and Gulf countries shortly after Trump's announcement, underscoring the fragility of the deal. The war, now in its sixth week, has claimed more than 5,000 lives across nearly a dozen countries and badly damaged vital regional infrastructure, including oil and gas facilities.

Financial markets nonetheless welcomed the news. Japan's benchmark Nikkei jumped 5% to a one‑month high, while ​Brent crude prices tumbled roughly 13% to around $95 a barrel by 0300 GMT, as traders priced in a near-term easing of supply risks.

QUICK RELIEF VALVE

A temporary halt in fighting and the reopening of ​Hormuz would allow Middle Eastern exporters to ship significant volumes of oil that have been trapped inside the Gulf since hostilities began, offering global energy markets some ⁠immediate relief.

Around 130 million barrels of crude oil and 46 million barrels of refined fuels are currently floating on roughly 200 tankers in the region, according to data from analytics firm Kpler. Another 1.3 million tonnes ​of liquefied natural gas are also stuck on vessels awaiting safe passage.

For Asia, which relies on the Middle East for 60% of its oil and 80% of gas imports, the disruption has been particularly severe. Several countries ​have been forced to curb industrial output and ration fuel supplies following the abrupt cut in deliveries. The release of these trapped volumes would therefore ease the most acute pressure on Asian economies and energy systems.

But clearing the backlog of cargoes is only part of the problem. Getting tankers out of the Gulf is one thing; persuading shipowners and charterers to send vessels back in is quite another.

The unprecedented blockade of Hormuz has caused severe disruption to global shipping markets by sharply reducing ​tanker availability, pushing freight rates to record highs. Many shipowners are likely to remain extremely cautious about re-entering the region during what is, at best, a shaky and time-limited ceasefire, fearing their vessels and crews could ​once again become trapped if hostilities resume.

That caution would in turn constrain any attempt to revive normal export flows.

OIL PRODUCTION TO LAG

Middle East oil exports via Hormuz collapsed by around 13 million barrels per day (bpd) in March, equivalent to ‌roughly 13% of ⁠global consumption, according to Kpler. While Saudi Arabia and the United Arab Emirates managed to divert some shipments through alternative routes, the disruption forced regional producers to shut in an estimated 7.5 million bpd of output in March, including 2.8 million bpd in Iraq and 1.9 million bpd in Saudi Arabia, the world's largest exporter, according to US Energy Information Administration estimates.

As matters stand, much of that production is unlikely to come back quickly.

Restarting oilfields, especially at the scale found in the Middle East, is a complex, time-consuming process that can take weeks at best. National oil companies such as Saudi Aramco and the UAE's Adnoc are likely to hesitate before ​restoring output without greater clarity on the durability of ​the ceasefire.

Moreover, refineries, fields and export terminals damaged ⁠by missile and drone strikes will require months, and in some cases years, to repair. The region also faces a shortage of specialised equipment and skilled labour, which could further slow restoration efforts.

Crucially, without confidence that sufficient tankers will be available to load crude oil, diesel and jet fuel, producers will be reluctant to risk ​restarting fields and refineries only to find they cannot move the output.

LASTING SCARS

Were Washington and Tehran to agree on a permanent cessation of hostilities that ​led to the full reopening ⁠of Hormuz, oil and gas trade could eventually return to more normal operations. But even under that more optimistic scenario, the war is likely to leave lasting scars on global supply.

In the medium term, the oil market could remain 3 to 5 million bpd tighter over the next few years than pre-war expectations, due to damage to export infrastructure and the need to rebuild depleted inventories, according to Saul Kavonic, head of energy research at MST Marquee.

Unless the warring ⁠sides strike a ​firmer peace deal, the two‑week ceasefire now taking shape risks being little more than a short-term patch in what has become ​an unprecedented global energy crisis.

Solar power is often discussed as a policy ambition in Bangladesh, one which has become more pertinent given the ongoing global energy uncertainty and price volatility.

Bangladesh’s energy security depends on how quickly renewable ambitions translate into real projects -- spearheaded by solar.

Developing around 5,000 Megawatt peak (MWp) of solar could require over Tk 35,000 crore in generation investment, excluding land and supporting infrastructure -- making bankable projects and investor confidence essential.

In Bangladesh, 1 MWp of solar capacity can generate roughly 1.4 million kilowatt-hour (kWh) annually, highlighting solar’s potential contribution to the national power supply.

International experience shows that countries can scale solar from negligible levels to 20–30 per cent of installed capacity within a decade or even faster when supported by clear policy frameworks, bankable procurement structures and coordinated infrastructure planning.

Despite repeated policy commitments and long-term energy planning, solar deployment in Bangladesh has remained limited -- and this is solely because of an incomplete implementation framework.

In several cases, projects were awarded without confirmed land access, grid interconnection or developers demonstrating the financial and technical capability required to deliver utility-scale projects.

As a result, many projects lacked the capacity to achieve financial closure or progress to construction within expected timeframes.

Solar prices are influenced by technology costs but, in Bangladesh, are primarily driven by financing conditions, land constraints, infrastructure requirements and project risks.

While concessional financing is available, the challenge is deploying it at scale. Lower financing costs require reducing project risk through bankable power purchase agreements (PPAs), strong payment security and credible project pipelines.

Institutions such as Infrastructure Development Company can play a role through blended finance and credit enhancement structures, particularly if scaled and aligned with utility-scale project requirements, while foreign exchange risk mitigation can help unlock international capital.

The transition toward competitive solar tenders represents an important step forward.

Competitive tariff auctions can deliver transparent price discovery, but only when projects are genuinely ready to build.

Poorly structured tenders can encourage aggressive bids that later prove unviable, leading to delays or cancellations.

Procurement frameworks must ensure that winning bidders have credible projects, secured sites and the capability to deliver.

Many of the challenges observed in past projects reflect gaps in readiness at the time of award.

Successful projects require key fundamentals from the outset. Developers should demonstrate secure land rights, confirm sites are dispute-free and obtain preliminary grid interconnection approval.

Financial capability should be supported by credible commitments from experienced institutions, with bid bonds and performance guarantees discouraging speculative participation.

Once a project is awarded, clear and enforceable timelines should govern each stage of development.

Power purchase and implementation agreements should be executed within three months of award, followed by financial closure withinsix months of PPA signing.

Construction should then be completed within 12–18 months, depending on project size and site conditions.

Delays at any stage should trigger defined penalties, including encashment of performance guarantees.

Without disciplined timelines, projects risk remaining in prolonged development phases without progressing to construction.

Establishing and enforcing such timelines ensures that projects move predictably from award to operation.

Land and grid access remain two of the biggest barriers to scaling solar in Bangladesh.

Utility-scale solar is inherently land intensive: every 1,000 MWp of ground-mounted capacity typically requires roughly 2,200–2,300 acres. In a densely populated country, securing suitable sites becomes a major challenge. The ‘solar park’ model offers a practical solution.

Under this approach, government agencies prepare land and supporting infrastructure such as roads, drainage and substations before leasing plots to private developers.

By addressing land and grid constraints upfront, solar parks can significantly reduce development risk, lower costs and accelerate project timelines.

Such models need not rely on upfront public funding; infrastructure costs can be recovered through land leases, developer charges or structured public–private partnerships.

In the absence of a coordinated solar park framework, transmission connectivity remains a major challenge.

Developers must construct transmission lines connecting the plant to the nearest substation at their own cost, often across considerable distances and through complex right-of-way approvals.

Once completed, these lines are transferred to the national grid operator during commissioning. This requirement can significantly increase costs and delay projects.

Targeted fiscal incentives can help accelerate investment during the early stages of solar expansion.

Policies such as tax holidays, reduced or zero import duties on solar modules, inverters and key balance-of-system components and accelerated depreciation for renewable energy assets can significantly lower capital costs.

Because much solar equipment is imported, such measures can materially improve project economics and support more competitive tariffs.

Solar expansion can also stimulate domestic industrial development and job creation.

Growing deployment creates opportunities for local manufacturing and engineering firms to participate in the renewable energy supply chain, particularly in mounting structures, electrical systems and installation services.

Over time, solar module assembly could also emerge as a viable domestic industry if deployment scales sufficiently.

Rooftop solar offers a fast-track pathway for expansion. Approximately 6,000 square metres of roof space can support around 1 MWp of solar capacity.

Large factory rooftops provide suitable space for distributed generation, while net metering and third-party PPAs can enable deployment without upfront investment.

As solar capacity grows, complementary technologies such as battery storage will help manage intermittency and support grid stability.

Bangladesh has both the demand and the opportunity to scale solar power rapidly. The challenge now is execution.

With the right implementation framework in place, Bangladesh can transform solar ambition into delivered capacity -- strengthening energy security, enabling domestic industry and high-skilled job creation and driving long-term economic growth.

Listed company MK Footwear has signed a finished shoes OEM manufacturing deal with Hong Kong-based Fundrich Global Co, Limited and a separate export agreement with China's Jinjiang Akia Sports Co Ltd, marking a strong push into global markets.

According to stock exchange disclosures, the board approved the OEM deal on 6 April, though it was signed earlier on 25 March.

Trial production under the Fundrich deal will begin on 3 May, with a target of 200,000 pairs during the April–June phase as the company prepares for full-scale operations. Subject to successful completion, both parties plan to sign a five-year agreement by 1 July to secure a steady export pipeline.

For 2026-27, MK Footwear targets sales of 2.7 million pairs and export earnings of $21.6 million – up 343% from 2024-25. It aims to raise annual capacity to 5 million pairs by March 2029, with projected export turnover of $40 million, or about Tk500 crore.

The board said the partnerships would improve capacity utilisation, strengthen exports, and create shareholder value, subject to execution and compliance with contract terms. The Dhaka Stock Exchange has sought a copy of the Fundrich agreement, which the company has yet to submit, drawing investor attention.

Separately, MK Footwear signed an export deal on 24 March with Jinjiang Akia Sports, which will place a minimum annual order of 1 million pairs, subject to agreed designs and specifications, with expected export revenue of $8-10 million a year. Dedicated production capacity will be allocated, with standard terms on quality, delivery, and payment.

The expansion comes amid improved financials. In FY2024-25, revenue stood at Tk78.79 crore, while net profit rose 116% to Tk8.76 crore, partly driven by Tk6.37 crore in gains from selling shares of Legacy Footwear acquired at a lower cost.

The company earlier declared a 12% cash dividend for shareholders other than sponsors and directors for the year ended 30 June 2025.

The Dhaka stock market continued its upward momentum today, buoyed by a sharp rise in turnover and improving investor sentiment.

The benchmark index of the Dhaka Stock Exchange, DSEX, advanced by 34 points to close at 5,156, extending gains from the previous session. The blue-chip DS30 index also rose, adding 16 points to settle at 1,971, reflecting strong buying interest in fundamentally sound stocks.

Market activity saw a significant boost, with turnover surging by 27% to Tk597 crore, signalling a return of liquidity and growing investor confidence. The majority of listed securities posted gains, with 275 issues closing higher, compared to 70 decliners and 48 remaining unchanged, underscoring the strength of the rally.

According to EBL Securities, the market maintained its upward trajectory as investors showed renewed interest in beaten-down stocks, taking advantage of attractive valuations following recent corrections.

The brokerage noted that sentiment was further supported by ongoing ceasefire discussions related to the Middle East war, which helped ease global uncertainties and encouraged investors to re-enter the market.

The session began on a cautious note, with investors engaging in selective buying amid lingering concerns. However, as the trading day progressed, buying interest intensified, driven by supportive domestic cues and improving confidence. This shift in sentiment led to more decisive accumulation of stocks, ultimately pushing the indices higher by the close of trading.

Sector-wise, the pharmaceutical sector dominated trading activity, accounting for 16.8% of the total turnover, followed by the engineering sector with 13.9% and the general insurance sector with 10.8%. The strong participation across sectors suggests that the rally was broad-based rather than concentrated in a few stocks.

Among the most actively traded stocks were Lovello Ice-cream, Acme Pesticides, Khan Brothers PP Woven Bag, Techno Drugs, and Asiatic Laboratories, reflecting heightened investor interest in both large and mid-cap companies.

Most sectors ended the day in positive territory, with notable gains seen in ceramic, paper, and textile stocks, which rose 2.7%, 2.1%, and 1.8%, respectively. The food sector was the only segment to close in negative territory, albeit marginally, indicating limited profit-taking in an otherwise bullish market.

Top-performing stocks of the day included Regent Textile and Familytex, both of which gained the maximum allowable limit, followed by Lovello Ice-cream, Atlas Bangladesh, and BD Autocars, all posting strong price appreciation. On the losing side, Al-Arafah Islami Bank led the declines, followed by Uttara Finance, Sunlife Insurance, Asiatic Laboratories, and Unilever Consumer Care.

Meanwhile, the port city bourse also ended the session in positive territory, although with minor adjustments. The Selective Categories' Index and the All Share Price Index of the Chittagong Stock Exchange saw slight declines, suggesting a mixed but stable performance outside the main Dhaka market.

The Bangladesh Securities and Exchange Commission (BSEC) has approved City Bank’s subordinated bond worth Tk 1,200 crore.

In a press release yesterday, the regulator said the unsecured, non-convertible, fully paid-up, fully redeemable, and coupon-bearing bond had received the green light.

Subordinated debt is an unsecured loan or bond that ranks below senior loans or securities for claims on assets or earnings, according to Investopedia.

The bond’s coupon rate will be the reference rate plus a 3 percent margin. The reference rate is the average of the upper limit of six-month fixed deposits at private conventional banks, excluding shariah banks, foreign banks, and banks licensed after 2012.

City Bank will raise funds by issuing bonds to mutual funds, individual investors, corporates, banks, and other institutional investors through private placement. Each bond has a face value of Tk 10 lakh. The proceeds will be used to provide SME, corporate, and retail loans.

EBL Investments will act as the bond’s trustee, while City Bank Capital Resources and IDLC Investments will serve as arrangers.

The BSEC said the bond will be listed on the alternative trading board of the stock exchange.

In addition, the regulator approved the extension of approval letters for Jamuna Bank’s Tk 800 crore bond and Trust Bank’s Tk 500 crore bond. Both bonds are non-convertible, unsecured, fully redeemable, and carry a floating rate.

Following the banks’ applications, their tenures have been extended until September 30, 2026.

A conditional two-week ceasefire between the United States and Iran has led to the reopening of the Strait of Hormuz, easing concerns over global energy supplies and pushing oil prices lower.

Brent crude fell 15.9% to $92.30 a barrel, while US-traded oil dropped 16.5% to $93.80 after the announcement. Prices remain above the roughly $70 per barrel level seen before the conflict began on 28 February, says the BBC.

Under the agreement, President Donald Trump said, "I agree to suspend the bombing and attack of Iran for a period of two weeks... subject to the Islamic Republic of Iran agreeing to the COMPLETE, IMMEDIATE, and SAFE OPENING of the Strait of Hormuz."

Iran signalled conditional acceptance of the truce. Foreign Minister Abbas Araghchi said Tehran would agree to a ceasefire "if attacks against Iran are halted," adding that safe passage through the waterway "will be possible."

Asian financial markets rose following the development, with Japan's Nikkei 225 gaining 4.5% and South Korea's Kospi jumping 5.5%.

The ceasefire follows weeks of disruption to global energy markets. The Philippines declared a national energy emergency on March 24 after petrol prices doubled, while migrant workers in India were forced to leave cities due to shortages of cooking gas.

Analysts said economic considerations may have played a role in the agreement. Xavier Smith of AlphaSense said Trump was likely wary of allowing energy prices to "skyrocket," risking a "self-inflicted economic wound."

Trump's rhetoric during the conflict also drew criticism. He had threatened that "a whole civilisation will die tonight" if a deal was not reached by his deadline, prompting concern from the United Nations. The UN chief was reported to be "deeply troubled" by the remarks.

While the reopening of the Strait of Hormuz has provided short-term relief to markets, analysts said the events surrounding the ceasefire could have longer-term implications for perceptions of the United States globally.

Bangladesh Bank Governor Md Mostaqur Rahman has promised full protection to the members of the country’s shariah boards and urged them to work independently.

Recently, the BB governor met members of the newly formed Bangladesh Bank Shariah Advisory Board, representatives from almost all Islamic banks, prominent scholars, and academics to discuss the current state, challenges, and future reforms of Islamic banking in Bangladesh.

“You, the members of shariah boards, shall work independently; the central bank will provide you with full protection,” he said, referring to members of the shariah boards of Islamic banks of the country.

Rahman chaired the meeting at the central bank’s headquarters, which was also attended by the deputy governor responsible for Islamic banking regulation, executive directors, directors, and senior officials.

At the event, the governor acknowledged past money laundering incidents in Islamic banking, attributing them to weak oversight. He emphasised that Islamic banking, being asset-backed, should prevent such losses if shariah principles are properly applied.

Scholars at the meeting proposed several measures to strengthen shariah governance
He underscored that Islamic banks must operate free from political influence and focus solely on service.

Scholars at the meeting proposed several measures to strengthen shariah governance, including empowering shariah supervisory committees and secretariats to operate independently of banks’ boards.

Major investments would require approval from at least a three-member shariah subcommittee. They also recommended enacting a dedicated Islamic Banking Act, appointing a deputy governor and executive director for Islamic banking supervision, and setting mandatory shariah knowledge standards for bank executives.

To enhance transparency, proposals included annual external shariah audits, separate Core Banking Systems (CBS) for shariah-compliant operations, and a shariah governance framework with a compliance rating system modelled on Malaysia.

Scholars also suggested establishing a research centre and library on Islamic economics to position Bangladesh as a regional hub for Islamic finance studies.

Additional measures included providing liquidity support, introducing shariah-compliant money market instruments, and treating major money laundering and corruption cases as acts of treason with strict penalties.

Notable attendees included Prof Abu Bakr Rafique, Mufti Shahed Rahmani, Mohammad Manjure Elahi, and shariah representatives from Islami Bank Bangladesh, Al-Arafah Islami Bank, Standard Islami Bank, UCB, ICB Islamic Bank, Jamuna Bank, and ONE Bank.

Oil prices dived, bonds rallied and stocks surged on Wednesday after a two-week ceasefire in the Middle East spurred a relief rally as investors cheered the possible resumption of oil and gas flowing through the Strait of Hormuz.

US President Donald Trump said he agreed to suspend bombing and attacks on Iran for two weeks and that a long-term peace agreement was in progress.

Global markets have been rattled since the US and Israel attacked Iran at the end of February, leading Tehran to effectively close the Strait of Hormuz, a key waterway used to transit one-fifth of the world's oil and gas.

US crude futures CLc1 fell around 16.5% to $94 a barrel, S&P 500 futures ESc1 leapt over 2% and the dollar fell broadly, having been the haven of choice for investors during the tumult.

"Markets have been predicting that Trump was looking for an off-ramp in Iran," said Jamie Cox, managing partner at Harris Financial Group. "Today, he got one and took it."

Futures pointed to broad gains for Asia's stock markets, which have been beaten down by war and soaring energy prices, and 10-year US Treasury futures jumped about 15 ticks.

The risk-sensitive Australian dollar AUD= rose 1.3% to above $0.7070 and the euro EUR=gained 0.76% to $1.1683. Cryptocurrencies also rose.

Trump had set a late Tuesday deadline for a deal with Iran to be reached, threatening to destroy every bridge and power plant in the country if Iran did not reopen the Strait of Hormuz. Iran had said it would retaliate against US allies in the Gulf.

The six-week conflict has sent oil prices surging, stoked worries of inflation and upended the global rates outlook with countries and companies scrambling to adjust to the energy shock.

In commodities, gold prices XAU= rose over 2% to $4,812 per ounce. GOL/

The Bangladesh Energy Regulatory Commission (BERC) has once again raised the price of jet fuel used in aircraft operations, marking the third increase in less than a month.

The new rates were announced today (7 April) and is set to take effect from midnight tonight, reads a BERC notification.

Under the latest revision, the price of jet fuel for domestic flights has been increased to Tk227.08 per litre from Tk202.29 per litre, a rise of 12.26%.

For international flights, the fuel price has been raised to $1.4806 per litre from $1.3216 per litre, exempt from duties and VAT.

Earlier, on 24 March, BERC increased jet fuel prices by around 80% for domestic routes and nearly 79% for international routes in a single adjustment.

Prior to that, on 8 March, the price for domestic routes was revised from Tk95.12 per litre to Tk112.41, while international prices were raised from $0.62 to $0.7384 per litre.

Reacting to the latest hike, Novoair Managing Director Mofizur Rahman told The Business Standard that the 12% increase may appear modest in isolation, but the cumulative rise since February has been significant.

"Jet fuel prices for domestic routes were around Tk95 per litre in early February, later surging to over Tk200 – an increase of more than 100% in a short period. With the latest adjustment, the overall rise now stands at roughly 115%-116%. In that context, a 12% hike alone may not seem very significant, but the cumulative impact is substantial," he said.

He added that rising fuel costs are compounded by higher taxes. "In February, the tax component was around Tk18 per litre. Now it has increased to over Tk40 due to the higher base price," he said, noting the added pressure on airlines.

Referring to international practices, he said several countries have cut fuel taxes to cushion the impact of rising prices.

"India has significantly reduced fuel taxes, while Australia has cut them by around 50%. Such measures help airlines manage costs," he noted.

He stressed that without similar adjustments in Bangladesh, the rising cost structure could become unsustainable and would continue to push up airfares.

A decision to increase fuel prices from next month may be made following discussions at a cabinet meeting, the energy minister told parliament Tuesday, reassuring that Bangladesh holds adequate stock of fuels despite global crisis.Bangladesh stock alerts

Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmud Tuku made the statement in the House during question hour on the tenth day of the first session of the 13th National Parliament.

The session was chaired by Speaker Hafiz Uddin Ahmad.

The minister explains that there is a structured mechanism for adjusting fuel prices, which is reviewed on a monthly basis. "The final decision for the coming month will be determined at the cabinet level."

Economists and energy experts are of the view that a hike in fuel prices would have domino effect on people's living and the economy at large.

Highlighting global challenges, Tuku pointed to geopolitical instability over the Middle East and restrictions imposed by Iran on shipping through the Strait of Hormuz, which have disrupted global energy-supply chains.

"Despite these challenges," he emphasizes, "the government has ensured a steady supply of fuel from multiple sources."

Providing an update on current reserves, the minister said Bangladesh has 164,644 metric tonnes of diesel in stock, with an additional 138,000 tonnes expected to arrive by April 30. The country also holds 10,500 tons of octane and 16,000 tons of petrol, with further large shipments expected within this month.

Comparing regional trends, he notes that Pakistan has increased fuel prices by 50 percent, while Sri Lanka has introduced fuel rationing. India, Afghanistan and Nepal have also raised fuel prices. "In contrast, Bangladesh has so far kept prices stable to reduce the burden on citizens."

To support farmers during the irrigation season, the government has instructed district administrators to issue "agriculture cards" to ensure uninterrupted diesel supply.

On enforcement, the minister reaffirms government's 'zero-tolerance' policy against illegal hoarding and smuggling of fuels.

Between March 3 and April 4, authorities had conducted 342 operations nationwide, filing 2,456 cases. These drives resulted in 31 jail sentences, fines totaling Tk 12.539 million, and the recovery of approximately 4.048 million litres of fuels.

The minister also assures parliament that monitoring has been strengthened through the appointment of "tag officers" at filling stations and regular virtual meetings with district administrations.

Economists are, however, divided over the government plan to raise fuel prices from next month, arguing about a difficult tradeoff between fiscal constraints and the cost of living.

One group says the increase will disproportionately hit low- and lower-middle-income households, as higher fuel costs are likely to feed through into the prices of essential goods and services.

Rising transport and production costs could amplify inflationary pressures already felt by consumers, they alert.

Dr M. Masrur Reaz, chairman and chief executive Officer of Policy Exchange Bangladesh, says the impact would be broad-based.Bangladesh stock alerts

Higher fuel prices would raise labour and freight costs, feeding into the wider economy.

"Power and electricity costs will increase as a result of the adjustment, with multiple knock-on effects," he told The Financial Express.

He adds that irrigation and transport costs would rise sharply, placing an additional pressure on lower-income groups. Others argue that an adjustment is unavoidable, as such.

The taka edged lower against the dollar yesterday, with the weighted average interbank rate marginally rising to Tk 122.85 from Tk 122.75, at which the dollar had held steady since late March, Bangladesh Bank data showed.

The dollar rate stood at Tk 122.55 on March 9.

Trading in the interbank foreign exchange market was also thin at the start of the week, suggesting importers are not rushing to buy dollars in large quantities. Just three transactions were recorded on Sunday, totalling $4.03 million, down from $62.50 million on April 2.

The devaluation of the taka comes against a volatile global backdrop. The US-Israeli war on Iran has kept oil prices elevated above $110 a barrel, stoking inflation concerns across import-dependent economies, according to a Reuters report.

The dollar softened slightly yesterday, down 0.2 percent on the DXY index, as investors watched for any signs of progress toward a ceasefire.

Even so, the dollar remains broadly strong, underpinned by expectations that the US Federal Reserve will hold rates high through the year, according to the CME FedWatch tool cited by Reuters.

Bankers say the main concern is behaviour driven by panic.

Mirza Elias Uddin Ahmed, managing director of Jamuna Bank, said the immediate risk is panic-driven demand amid the uncertainty caused by the US-Israel war on Iran rather than any fundamental deterioration in Bangladesh’s external position.

“Fuel prices and food prices are increasing,” he noted, pointing to the potential for cost-push inflation to ripple through the economy.

“A rise in fuel prices will eventually lead to an increase in food prices.”

But he stressed that Bangladesh’s underlying trade fundamentals remain sound. While the country has recorded a dip in exports to the United States recently, the broader trajectory of remittances and export growth over the last fiscal year offered a degree of cushion.

Remittance inflows for fiscal year 2024-25 (FY25) reached $30.32 billion, up 26.81 percent year-on-year, and exports grew by 8.58 percent, reaching $48.28 billion.

Ahmed flagged a particular concern around import behaviour during periods of uncertainty. Past episodes have shown that importers tend to accelerate letter of credit (LC) payments, booking early to lock in rates, which amplifies pressure on the dollar at precisely the wrong moment.

On the structural dynamics of the exchange rate, Ahmed also said the forex reserves are under slight pressure, driven in large part by the need to import oil at elevated prices.

“The volatility is mainly stemming from the war. We have to be patient to avoid panicking. This will not last long,” he added.

Bangladesh Bank has so far maintained a buffer. Gross foreign exchange reserves stood at $34.43 billion in the latest available figures, while usable reserves under the IMF’s BPM6 methodology were $29.81 billion. Since the start of FY26, the central bank has purchased over $5 billion from the interbank market to rebuild reserves, reversing a years-long trend of dollar sales.

National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan on Tuesday (7 April) assured businesspeople in the agriculture sector that their concerns will be addressed, urging them to focus on problems rather than demanding tax cuts.

Speaking at a pre-budget discussion at the NBR office in Agargaon, he said, "Your demand is to reduce taxes, while our responsibility is to increase revenue. Rational coordination is needed, but revenue collection remains essential for the country."

He warned that reducing taxes often leads to endless demands for further cuts and subsidies, noting that "even zero tax does not satisfy anyone" and that tax reductions do not automatically boost compliance.

Agro industry pushes tax exemption at source

The Bangladesh Agro Processors Association has proposed a tax exemption at source for agricultural products and urged the withdrawal of supplementary duty on mineral water up to 3 litres, stressing that safe drinking water is an essential commodity, not a luxury.

NBR Chairman Abdur Rahman assured that the board will address these concerns.

Meanwhile, the Bangladesh Poultry Industries Association has requested turnover tax reductions and easier adjustments of Advance Income Tax (AIT) on imports.

The NBR chief acknowledged pressures to set turnover tax at 2.5%, saying reductions are difficult but being considered.

Feed Industries Association Bangladesh highlighted that 70–80% of poultry feed costs come from raw feed materials and requested incentives to prevent price hikes.

Agriculture Machinery Manufacturers Association-Bangladesh proposed simplifying SRO descriptions for threshers, harvesters, and rice transplanters to ease VAT determinations.

Agro-Chemical Manufacturers, Fertiliser, Crop Protection & Fruit Importers Associations proposed various duty and tax exemptions on raw materials, pesticides, bio-rodenticides, fruit bags, sticky traps, and protective equipment to support local production and exports.

The proposals reflect a broad push from the agriculture sector to reduce fiscal burdens and promote accessibility, safety, and local production

Concerns raised over delayed VAT refunds

A pre-budget discussion meeting, traders raised concerns over delayed VAT refunds.

In response, the NBR Chairman said that with the launch of the online system, VAT refunds have started to be processed.

He added, "The income tax system is also almost complete; it is currently in trial runs. Once these are fully operational, we will refund you directly to your bank accounts. Currently, we have temporarily withheld refunds to enforce discipline, but ultimately, you will receive them."

Other participants included the Bangladesh Agro Feed Ingredients Importers and Traders Association, Shrimp and Hatchery Association of Bangladesh, and Animal Health Companies Association of Bangladesh.

The National Board of Revenue (NBR) has launched a pilot initiative to verify import invoices online in a bid to prevent misdeclaration of goods and values, curb revenue evasion, and speed up customs clearance.

As part of the move, the NBR is linking its customs automation platform, ASYCUDA World, with the database of the Bangladesh Bank. The pilot programme formally began today (7 April).

Speaking at the inauguration, NBR Chairman Abdur Rahman Khan described the initiative as a "landmark step" towards fully digitising customs procedures.

According to an NBR press release, the system will enable fully online, real-time verification of commercial invoices. Once implemented in full, it is expected to significantly reduce revenue risks by preventing attempts at evasion and ensuring the protection of government revenue.

The initiative is also expected to help curb trade-based money laundering, the release added.

It said the new system would reduce reliance on paper documentation, making the import and export clearance process simpler, faster, and more efficient. It will also help build a reliable database for determining the value of imported goods.

Under the system, commercial invoices issued for imports will be transmitted in a unified format through all commercial banks to Foreign Exchange Transaction Management System (FxTMS) of Bangladesh Bank. These invoices will then be shared in real time with the ASYCUDA World system used by customs authorities.

The interconnection between the two systems has been jointly developed by the Foreign Exchange Operations Department of Bangladesh Bank and the IT team of the NBR.

At the event, Kamal Hoassain, director of the Foreign Exchange Operations Department, said it is not feasible to monitor thousands or even millions of invoices quickly and accurately through manual processes.

"Real-time online verification will make it possible to check invoices more efficiently," he said, adding that the system would help reduce trade-based money laundering.

However, he also noted that the system still has some vulnerabilities.

Currently, in the case of imports, the exporter's bank sends documents, including details of goods and prices, to the importer's local lien bank in Bangladesh. Importers or their representatives then submit hard copies of these documents manually to customs authorities, a process that often leads to reported delays and additional costs.

There have also been allegations that some dishonest importers exploit the manual system by providing false information, sometimes in collusion with bank or customs officials, making misdeclaration difficult to detect.

Under the new system, commercial banks will upload invoice data in a prescribed format to the central bank's platform, allowing customs authorities direct access for verification.

The government has decided to waive import duties on electric school buses, aiming to reduce fuel consumption and promote cleaner transport in the education sector, the National Board of Revenue (NBR) Chairman Abdur Rahman Khan said today (7 April).

Speaking at a pre-budget consultation with transport sector stakeholders at the NBR headquarters, he said the initiative is part of a wider strategy to curb fuel use in the country's transport system.

"The government wants to cut fuel consumption in the transport sector. As a first step, we have decided to set zero import duty on electric buses used for school students," he said.

He added that the decision will be implemented immediately, without waiting for the national budget. "There will be broader changes in the electric vehicle (EV) sector in the upcoming budget, but we will not wait till then. A Statutory Regulatory Order (SRO) will be issued soon to formalise the duty exemption," he noted.

Industry leaders at the meeting urged the government to expand incentives for electric vehicles (EVs), including reducing registration costs through clearer classification based on engine capacity (CC) and kilowatt ratings.

The NBR chief acknowledged longstanding delays in VAT refunds, saying the issue – stemming from the lack of an automated system – has persisted for over a year and a half and promising to solve the problem.

Requests to reduce taxes on jet fuel were declined due to concerns over misuse and revenue leakage. "We must also consider revenue protection," the chairman said, noting the government's target to raise tax collection from Tk4 lakh crore to Tk6 lakh crore.

Petroleum dealers also sought duty-free imports of tank lorries used for fuel transportation, with the NBR chief promising to consider the proposal.

Meanwhile, transport operators requested zero-duty imports of truck chassis to replace ageing vehicles—some over 25 years old—but officials indicated that balancing environmental priorities with revenue needs remains a challenge.

Representatives from the motorcycle sector proposed allowing the use of compressed natural gas (CNG) in motorcycles. In response, the NBR chief discouraged further reliance on gas, citing domestic shortages and the high cost of LNG imports.

He instead highlighted the need for shifting towards renewable energy in the current context.

Aviation operators, meanwhile, said rising jet fuel taxes – now at Tk42 per litre from Tk18 previously – have significantly increased operating costs, urging the government to restore earlier rates.

The meeting brought together a broad range of industry groups, including representatives from the Bangladesh Automobile Assemblers and Manufacturers Association (BAAMA), Bangladesh Reconditioned Vehicles Importers and Dealers Association (BARVIDA), petroleum dealers, motorcycle manufacturers, shipbuilders and aviation operators.

Bangladesh's overall economic growth slowed to 3.03% in the second quarter (October-December) of the 2025-26 fiscal year, down from 3.53% in the same period last year, according to data released by the Bangladesh Bureau of Statistics (BBS) on Monday (6 April).

Growth had been comparatively stronger in the first quarter, reaching 4.96%, up from 3.91% a year earlier. At current prices, the country's GDP rose to Tk1,517,600 crore in Q2, from Tk1,390,100 crore in Q2 FY2024-25, indicating that the overall economy continues to expand despite a slowdown in growth momentum.

Sectoral performance

Agriculture sector maintained positive momentum, growing 3.68% in Q2, up from 1.90% a year earlier. In the first quarter, agriculture posted 2.11% growth, improving from a negative 0.12% last year.

The industrial sector experienced a sharp slowdown, with growth dropping to 1.27% in Q2, compared to 5.78% a year earlier. This followed a stronger first quarter growth of 6.82%, highlighting the uneven trajectory of industrial performance.

The service sector remained relatively stable, growing 4.45% in Q2, slightly up from 3.48% last year, and maintaining similar growth in Q1 at 4.51%.

Despite strong contributions from agriculture and services, the slowdown in industry weighed heavily on overall GDP growth. Experts say boosting investment, ensuring energy supply, and recovering global demand will be critical to reviving industrial momentum.

Impact of political and economic factors

Mustafa K Mujeri, executive director of the Institute for Inclusive Finance and Development, attributed the slowdown in formal sectors to political and social instability during the pre-election period.

He noted that the second quarter coincided with the election season, when worker strikes and political unrest created a tense social and political environment.

"As a result, growth in formal sectors such as manufacturing and industry nearly bottomed out, recording just 1.27%," Mujeri said. "In contrast, informal sectors like agriculture and services managed to maintain relatively stable production trends. Production activity in formal sectors was significantly affected during this period."

He further warned that growth could slow in the coming quarters due to the ongoing Middle East crisis, rising fuel and food prices, and higher global market costs, which have increased production expenses. Reduced garment exports and shortages of diesel, water, and chemical fertilizers are also affecting output.

"In agriculture, farmers did not receive fair prices. Potato prices have fallen by almost half, and production costs for other crops were not fully covered. The government must ensure supportive measures so farmers can continue production. Without timely action, growth, employment, and public welfare could suffer," he said.

Foreign investors significantly reduced their exposure to Bangladesh's capital market in March, offloading shares in leading blue-chip companies including Olympic Industries, BRAC Bank and Grameenphone, reflecting a sharp shift in sentiment driven by global uncertainties and lingering domestic concerns.

Data from the Dhaka Stock Exchange (DSE) showed that foreign investors remained heavily skewed towards selling throughout the month, with overall participation declining significantly.

Foreign turnover stood at Tk272 crore, down 59% from February, signalling reduced activity. Of this, total sales reached Tk215 crore, far exceeding purchases of Tk50 crore, highlighting a clear net outflow of foreign funds.

Among the worst-hit stocks, Olympic Industries saw the largest sell-off, with foreign investors offloading shares worth Tk76 crore. As a result, foreign shareholding in the company fell to 27.62% in March, from 30.26% a month earlier.

BRAC Bank followed, with Tk34 crore worth of shares sold, bringing foreign ownership down slightly to 36.48%. Similarly, Square Pharmaceuticals recorded Tk32 crore in sales, while Grameenphone saw Tk29 crore worth of divestment, reducing its already low foreign holding to 0.51%.

Other large companies also came under selling pressure, though in smaller volumes. Renata Limited saw Tk11.50 crore in sales, followed by City Bank with Tk10 crore and BAT Bangladesh with Tk4.60 crore.

Foreign investors also trimmed positions in a range of firms, including BSRM Limited, LafargeHolcim Bangladesh, Marico Bangladesh, Prime Bank, Beximco Pharmaceuticals, IDLC Finance and Linde Bangladesh, pointing to a broad-based retreat across sectors.

In contrast, a handful of smaller-cap stocks saw modest inflows. Daffodil Computers attracted the highest foreign purchases at Tk2.38 crore, lifting its foreign shareholding to 0.59%. Ring Shine Textile and Paramount Textile also recorded limited gains.

Overall, foreign investors reduced holdings in 25 listed companies in March, while increasing stakes in just eight. Holdings remained unchanged in 81 firms, underscoring a cautious and selective approach.

As of 6 April, the number of non-resident beneficiary owner (BO) accounts stood at 43,230, according to DSE data. 

Global tensions, domestic concerns weigh on sentiment

Market experts attributed the sharp decline in foreign investment to a mix of global geopolitical tensions and domestic structural weaknesses.

Salim Afzal Shawon, head of research at BRAC EPL Stock Brokerage Limited, told The Business Standard, "It's not just the Middle East war. There are many reasons for the decline in foreign investment. However, in the month following the election, we thought that foreign investment would increase. But that didn't happen. Rather, it decreased in an unexpected way."

Analysts said initial optimism following the formation of a new government after the national elections had raised expectations of improved market conditions. However, rising tensions in the Middle East due to the US and Israel's war on Iran disrupted global energy markets and increased economic uncertainty.

For Bangladesh, which depends heavily on imported energy, these developments have fuelled concerns over energy security, inflation and broader economic stability.

Such external pressures have compounded existing domestic issues, leading foreign investors to adopt a risk-averse stance.

Structural issues persist

Market participants noted that overseas investors tend to concentrate their portfolios in a limited number of fundamentally strong companies, given the scarcity of high-quality listed firms in Bangladesh.

As a result, even minor shifts in sentiment can trigger significant sell-offs in these stocks.

The presence of weak or poorly governed companies – often described as "junk stocks" – has further deterred foreign participation.

Analysts emphasised that concerns over corporate governance, transparency, and financial reporting continue to undermine investor confidence, limiting the market's attractiveness to global institutional investors.

Structural barriers, including complex capital gains taxation, inconsistent regulations and difficulties in repatriating funds, have also been cited as long-standing deterrents. Although recent policy measures aim to address some of these issues, their impact has yet to be fully felt.

In response to the declining trend, policymakers have reiterated their commitment to improving market conditions.

Finance Minister Amir Khosru Mahmud Chowdhury recently told parliament that authorities are stepping up efforts to curb market irregularities and manipulation.

He pointed to initiatives to strengthen investigation and enforcement mechanisms, accelerate digital transformation and improve accessibility for both domestic and foreign investors.

The Bangladesh Securities and Exchange Commission has fined asset management company Bangladesh RACE Management PCL Tk55 lakh for failing to comply with regulatory requirements on investments in listed bonds and government treasury bonds.

The penalty follows findings of irregularities in 11 out of the 12 mutual funds managed by the company, with Tk5 lakh imposed on each non-compliant fund, according to a recent order issued by the BSEC and published on its website.

The regulator also directed the firm to deposit the fine within 30 days of the order, warning that failure to do so would trigger further action under securities laws.

The commission, in its order, noted that the penalty was imposed mainly for failing to invest at least 3% of fund portfolios in listed debt securities and at least 1% in government treasury bonds, as required by regulations.

According to the order, "as per the Commission's directive dated 23 May 2021, a mutual fund shall invest at least 3% of its portfolio value in listed debt securities within 30 June 2022 and shall at all times maintain such investment ratio in the listed debt securities."

The deadline was later extended to 30 June 2023. However, the commission found that, as of 30 June 2025, 11 of the 12 funds under RACE had less than the required 3% exposure to listed debt securities.

In a separate directive issued on 19 February 2023, the regulator mandated that market intermediaries – including asset managers, merchant bankers, portfolio managers, stock dealers and mutual funds – must invest at least 1% of their own portfolios in listed treasury bonds by 30 June 2023 to diversify risk.

The commission found that funds managed by RACE had no investment in listed treasury bonds as of 30 June 2025.

Trustees flagged repeated non-compliance

The Investment Corporation of Bangladesh, trustee of six mutual funds, repeatedly instructed RACE during trustee committee meetings in the 2024-25 financial year to comply with the 3% investment requirement in listed debt securities.

Similarly, Bangladesh General Insurance Company Limited, trustee of four other funds, flagged the issue as non-compliance on several occasions.

The regulator noted that RACE did not act on these instructions.

It is also worth noting that, following observations from the ICB, the Commission sent a letter to RACE on 28 May 2025, seeking an explanation on the matter.

As all the funds had similar observations, the Commission's relevant department issued the letter only in the name of "Exim Bank First Mutual Fund". However, RACE has yet to respond to the Commission's letter.

RACE disputes findings

In a statement issued today (6 April) on the enforcement action, RACE said it had never made any investment in Agni Systems, for which the penalties were imposed.

It added that RACE-managed funds had neither invested in nor traded shares of the company, terming the BSEC order illegal and saying it had immediately informed the regulator.

RACE also addressed the requirement to invest 3% in listed debt securities and 1% in listed treasury bonds, stating that during the relevant period its mutual funds were subject to trading restrictions, bank account freezes, and BO account suspensions, creating what it described as an "impossibility of performance".

It said, as a result, the funds were unable to execute trades, settle transactions, or rebalance portfolios, and therefore could not comply with the investment requirements.

"During this period, the Funds, being incapacitated from executing any trades, settling transactions, or undertaking portfolio rebalancing, were unable to maintain the newly introduced requirement of investing 3% in listed debt securities and 1% in listed treasury bonds," the company said in the statement.

"Accordingly, the alleged non-compliance, if any, concerning investment in debt securities and treasury bonds arises solely from regulatory actions, and not from any negligence or failure on the part of RACE or the mutual funds," it added.

The company further alleged that the regulator had repeatedly targeted RACE by imposing operational suspensions that led to such constraints.

RACE said, "It further appears from the record that BSEC has continuously been targeting RACE and imposing suspensions on its operations, which in turn created an 'impossibility of performance' situation. Thereafter, BSEC's highlighting of such non-performance and imposing penalties as justification for alleged violations of securities laws is tainted with malafide and shares arbitrariness on the part of the regulator."

At an earlier hearing on the matter, before the fines were imposed, RACE highlighted similar points to defend its position.

The company said certain measures – including restrictions and directives – had harmed both the company and the funds it manages. "We have found instances where the restrictive actions are not taken directly by BSEC, but rather BSEC instructs trustee/custodian to take the restrictive action," the company said.

RACE further argued that such continual actions were "against fundamental principles of equity and constitutional fairness in Bangladesh" and detrimental to unitholders. "These unlawful and restrictive actions, arbitrarily imposed, are exacting a heavy price on the wellbeing of the funds, especially eroding their asset value."

The company added that restrictions under trust deeds, particularly sectoral exposure limits, had affected its ability to comply with the investment requirements.

"The Trust Deed as approved by BSEC restriction had a direct and material impact on the ability to comply with the 3% listed debt and treasury bond securities requirement," it said, noting that most such securities in Bangladesh are issued by banks.

"As long as sectoral exposure remained above the 25% limit, the trust deeds prevented the funds from purchasing many of the listed debt and treasury bond securities that would have counted toward satisfying the Commission's requirement."

RACE noted it could only move towards compliance by first reducing bank-sector holdings and rebalancing portfolios within the allowed timeframe.

Bangladesh saw a significant decline in foreign investment in the last quarter of 2025, with net foreign direct investment (FDI) falling by 18.42% compared to the same period last year.

According to Bangladesh Bank data, net FDI inflows for the October-December 2025 quarter amounted to $108 million, down from $132.81 million in the October-December 2024 quarter.

Economists attribute the slowdown to multiple factors, particularly the overall political situation and election-related uncertainty.

Zahid Hussain, former lead economist at the World Bank's Dhaka office, said, "There was no conducive environment for investment because there was uncertainty over the political settlement. At that time, it was unrealistic to expect foreign capital to flow into the country."

He noted that interim government initiatives to attract foreign investment faced resistance, further discouraging potential investors. "At that time, investors knew the interim government would not last, and there was no clear roadmap for elections. This uncertainty naturally reduced investment."

Decline in reinvested earnings

Bangladesh Bank data also shows that reinvested earnings, a key component of FDI, have decreased sharply. Over the past year, reinvested earnings dropped by 35.31%, falling to $210.74 million in the October-December 2025 quarter from $325.75 million in the same period of 2024.

Reinvested earnings refer to profits generated by foreign subsidiaries or associates that are retained and reinvested in the host country rather than repatriated as dividends. While reinvested profits create the appearance of rising investment, true FDI growth depends on new equity investment, which has remained weak.

Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD), said, "Considering the state of the economy and political environment, foreign firms have reduced reinvested earnings. At the time, there was uncertainty over whether elections would be held. Although elections were held in February, concerns remained during this quarter."

Policy and infrastructural hurdles

Economists say that, beyond political uncertainty, structural and policy-related factors have significantly hindered foreign investment in Bangladesh. Policy inconsistencies, inefficiencies in transport and logistics, and limited port cargo and container-handling capacity discourage investors, leaving the country behind its South Asian peers.

Mustafizur Rahman of the Centre for Policy Dialogue noted, "Challenges such as the single window system and high cost of doing business continue to block FDI inflows. Even if the political environment improves, investment will remain difficult unless these barriers are addressed. Investors evaluate facilities and opportunities, not just which government is in power."

A senior Bangladesh Bank official observed that private-sector investment has also slowed, signalling hesitation among local entrepreneurs alongside foreign investors. "Unless policy challenges are resolved, attracting foreign investment will remain extremely difficult," he said.

According to Bangladesh Bank data, total foreign investment – including equity, reinvested earnings, and intra-company loans – stood at $363.82 million in October-December 2025, down from $490.40 million a year earlier, underscoring persistent structural and political constraints.