The capital market of Bangladesh witnessed a steep decline throughout April 2025, causing investors significant financial losses. After reopening following the Eid holidays, the Dhaka Stock Exchange (DSE) experienced a continuous downturn, with the key index falling by 302 points and the market capitalization shrinking by Tk 17,000 crore.
According to a UNB report published on May 3, the DSE index started the month at 5,219 points and ended at 4,917 points. Out of 18 trading sessions in April, 15 closed in the red. The persistent decline led many investors to withdraw funds, with very little new investment entering the market.
The downturn was not limited to the main index. The Shariah-compliant DSES index dropped by 74 points, and the DS30 index—comprising the top-performing companies—declined by 92 points.
Data from Central Depository Bangladesh Limited (CDBL) revealed that 11,429 investors withdrew all their funds from their Beneficiary Owners (BO) accounts during the month. The number of zero-balance BO accounts has now exceeded 380,000, and over 10,000 active accounts were closed.
Investors expressed deep concern over the ongoing crisis. Tarek Hossain, a retail investor, pointed out that shares of many well-performing companies had plunged drastically, despite earlier assurances from the commission that good stocks would remain stable. “How does a Tk 100 stock fall to Tk 30 or 40? The commission has no answer,” he said.
Another investor, Monsur Ali, blamed margin loans for amplifying the losses. Due to forced sales triggered by margin calls, even quality stocks were sold off, worsening the market situation.
A member of the Capital Market Reform Task Force, speaking anonymously, said margin loans have become a major risk factor. The task force recently recommended stricter regulations, including setting loan limits between Tk 10 lakh and Tk 10 crore and prohibiting margin loans without existing investments.
The task force also proposed banning the use of margin loans for lock-in shares, sponsor shares, placements, unlisted firms, bonds, debentures, and mutual funds not listed on the market.
Abu Ahmed, Chairman of the Investment Corporation of Bangladesh (ICB), suggested that bringing large multinational companies into the stock market could restore investor confidence. However, multiple sources indicated that no major IPOs are expected this year, dimming hopes for a market recovery.
Adding to investor worries, recent internal turmoil within the Bangladesh Securities and Exchange Commission (BSEC)—including the dismissal of 21 officials—has further eroded confidence in the market.