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.

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.

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.

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.

Oil prices were little changed in choppy trade on ‌Monday, as investors awaited clarity on the status of talks between the US and Iran even as they remained wary about sustained supply losses due to shipping disruptions.

Brent crude futures rose 76 cents, or 0.7 percent, to $109.79 a barrel at 0656 GMT. US West Texas Intermediate crude ​futures were trading 53 cents, or 0.5 percent lower, at $111.01 per barrel.

The pricing moves in Asia trading on Monday ​were dwarfed by an 11 percent surge for WTI and an 8 percent rise for Brent during the previous trading session on Thursday, the biggest absolute price increase since 2020.

On Sunday, Trump ratcheted up pressure on Tehran, threatening ​in an expletive-laden Easter Sunday social media post to target Iran’s power plants and bridges on Tuesday if the strategic ​Strait of Hormuz is not reopened. Still, prices were largely unchanged on Monday.

Iran and the United States have received a plan to end hostilities that could come into effect on Monday and reopen the Strait of Hormuz, a source aware of the proposals said on Monday.

The Strait of ​Hormuz, which carries oil and petroleum products from Iraq, Saudi Arabia, Qatar, Kuwait and the United Arab Emirates, remains ​largely closed due to Iranian attacks on shipping after the war began on February 28.

“Not being able to open the Strait of Hormuz is ‌becoming ⁠more a question of political victory,” said Mukesh Sahdev, founder and CEO at consultancy XAnalysts.

Because of the Middle East supply disruptions, refiners are seeking alternative sources for crude, particularly for physical cargoes in the US and Britain’s North Sea.

Some vessels, however, including an Omani-operated tanker, a French-owned container ship and a Japanese-owned gas carrier, have passed through the Strait of Hormuz since Thursday, shipping data showed, ​reflecting Iran’s policy to allow ​passage for vessels from countries ⁠it deems more friendly.

The war threatens to linger on as Iran has officially told mediators it is not prepared to meet with US officials in Islamabad in the coming days ​and efforts to produce a ceasefire have reached a dead end, The Wall Street ​Journal reported on Friday.

On ⁠Sunday, Opec+, consisting of some members of the Organization of the Petroleum Exporting Countries and allies such as Russia, agreed to a modest rise of 206,000 barrels per day for May.

However, that decision will largely exist on paper as several of the group’s key ⁠producers ​are unable to raise output due to the war.

Russian supply has been ​disrupted recently by Ukrainian drone attacks on its Baltic Sea export terminals. Media reports on Sunday said its Ust-Luga terminal resumed loadings on Saturday after days ​of disruptions.

The dollar was steady on Monday, while the yen flirted with the crucial 160 per dollar level, ​as nervous investors took stock of the escalating Iran war, with all eyes on the latest deadline from US President Donald Trump ‌to reopen the Strait of Hormuz.

In an expletive-laden Easter Sunday social media post, Trump threatened to target Iran's power plants and bridges on Tuesday if the strategic waterway is not reopened, setting a precise deadline of 8 p.m. Tuesday Eastern Time (0000 GMT).

With most of Asia and Europe closed for holiday on Monday, liquidity is likely to be thin, with investor focus on the possibility ​of a ceasefire after a media report suggested a last-ditch push from negotiators was underway.

"Trump's latest deadline itself is bearish not because ​investors think war is guaranteed tomorrow if Iran does not open the strait, but because every new ultimatum makes ⁠the disruption look longer, stickier and more macro-negative," said Charu Chanana, chief investment strategist at Saxo in Singapore.

The euro was at $1.1523, while sterling last fetched $1.3211. The dollar ​index , which measures the US currency against six rivals, was slightly lower at 100.12.

The Australian dollar was 0.3 percent higher at $0.69045, wobbling near the two-month low that it hit last ​week.

In the kind of mixed messaging that has baffled supporters, foes and financial markets alike, Trump told Fox News on Sunday that Iran was negotiating, with a deal possible by Monday.

Axios reported the US , Iran and regional mediators are discussing terms of a potential 45-day ceasefire that could lead to a permanent end to the war.

Global markets have been rattled ​since the US -Israel war on Iran broke out at the end of February, with Tehran effectively closing the Strait of Hormuz, a key waterway that is a ​thoroughfare through which about a fifth of the world's total oil and liquefied natural gas passes.

"If the strait is reopened fully around that time (Trump's Tuesday deadline), oil will fall sharply ‌and risk ⁠will rally hard," said Prashant Newnaha, senior rates strategist at TD Securities.

"However, if the US escalates, expect global markets to reprice sharply. It's wait-and-watch in what's turning out to be a binary event."

The closure has caused oil prices to surge well above $100 per barrel, stoking fears of high inflation and upending rates outlooks across the world. Worries about the hit to economic growth have also weighed as stagflation risks swirl.

Traders are now no longer pricing a move from the Federal Reserve well into ​the second half of 2027, compared ​with expectations of two rate ⁠cuts in 2026 at the start of the year.

Data last week suggested US labour market conditions remained calm in March, though economists warned that a prolonged war in the Middle East posed a downside risk.

Two more Indian-flagged liquefied petroleum gas tankers, Green Asha and Green Sanvi, ​have exited the Gulf carrying the fuel for ‌the South Asian nation, according to ship tracking data on LSEG and Kpler.

A third vessel, Jag Vikram, is still ​in the west of the Strait of Hormuz, ​the data showed.

The US-Israeli war against Iran has all ⁠but halted shipping through the strait, but Iran ​says "non-hostile vessels" may transit the waterway if they coordinate with ​Iranian authorities.

Green Asha and Green Sanvi have crossed the Gulf area and are in the eastern Strait of Hormuz, the data ​showed, taking the total number of Indian-flagged LPG ​carriers that have traversed the Strait to eight.

India is gradually moving ‌its ⁠stranded LPG cargoes out from the strait, with Shivalik, Nanda Devi, Pine Gas, Jag Vasant, BW Elm and BW Tyr already reaching India.

India, the world's second-largest LPG importer, is ​battling its worst ​gas crisis ⁠in decades, with the government cutting supplies for industries to shield households from any ​shortage of cooking gas.

The country consumed 33.15 ​million ⁠metric tons of LPG, or cooking gas, last year, with imports accounting for about 60 percent of demand. About ⁠90 percent ​of those imports came from ​the Middle East.

India is also loading LPG onto its empty vessels stranded in ​the Gulf.

Opec+ agreed on Sunday to raise its oil output quotas by 206,000 barrels per day for May, a modest rise that will largely exist on paper as its key members are unable to raise production due to the US-Israeli war with Iran.

The war has effectively shut the Strait of Hormuz - the world's most important oil route - since the end of February and cut exports from Opec+ members Saudi Arabia, the UAE, Kuwait and Iraq, the only countries in the group which were able to significantly raise production even before the conflict began.

Crude prices have surged to a four-year high close to $120 a barrel, translating into soaring prices for transport fuels which are pressuring consumers and businesses across the globe, and triggering government action to conserve supplies.

The Opec+ quota increase of 206,000 bpd represents less than 2% of the supply disrupted by the Hormuz closure, but it signals readiness to raise output once the waterway reopens, Opec+ sources have said. Consultancy Energy Aspects called the increase "academic" as long as disruptions in the strait persist.

"In reality it adds very few barrels to the market," said Jorge Leon, a former Opec official who now works as head of geopolitical analysis at Rystad Energy.

"When the Strait of Hormuz is closed additional barrels from Opec+ become largely irrelevant."

Opec+ concerned about attacks on energy assets

Eight members of Opec+ agreed to the increase in May quotas at a virtual meeting on Sunday, Opec+ said in a statement.

Besides the disruptions affecting Gulf members, others such as Russia are unable to increase output - in Moscow's case due to Western sanctions and damage to infrastructure inflicted during the war with Ukraine.

Inside the Gulf, damage to infrastructure from missile and drone attacks has also been severe. Several Gulf officials have said it would take months to resume normal operations and reach production targets even if the war stopped and Hormuz reopened immediately.

A separate Opec+ panel that also met on Sunday, called the Joint Ministerial Monitoring Committee, expressed concern about attacks on energy assets, saying they were expensive and time-consuming to repair and so have an impact on supply, Opec+ said in a statement.

Iran said on Saturday Iraq was exempt from any restrictions to transit Hormuz, and shipping data on Sunday showed a tanker loaded with Iraqi crude passing through the strait. Still, it remains to be seen if more vessels will take the risk involved, a source close to the issue said.

War causes world's worst oil supply disruption

May's Opec+ increase is the same as the eight members had agreed for April at their last meeting held on 1 March, just as the war began to disrupt oil flows.

A month later, the largest oil supply disruption on record is estimated to have removed as many as 12 to 15 million bpd or up to 15% of global supply.

Oil prices could spike above $150 - an all-time high - if flows via Hormuz remain disrupted into mid-May, JPMorgan said on Thursday.

Opec+ groups 22 members including Iran. In recent years only the eight countries meeting on Sunday have been involved in monthly production decisions, and they started in 2025 to unwind previously agreed output cuts to regain market share.

The eight raised production quotas by about 2.9 million bpd from April 2025 through December 2025, before pausing increases for January to March 2026.

The eight hold their next meeting on 3 May.