Three years after Saudi Red Sea Gateway Terminal (RSGT) took over the operation of the Patenga Container Terminal (PCT), the crucial port facility still cannot deliver as expected due largely to infrastructure shortfalls and operational weaknesses.

This comes out in a post-completion evaluation by the Implementation Monitoring and Evaluation Division (IMED).

The IMED said the Saudi firm has yet to install a full set of container-handling equipment at the terminal built by the Chattogram Port Authority (CPA), limiting its ability to handle the targeted number of containers.

An insufficient number of gantry cranes, only one jetty being fully operational instead of three, and the absence of an integrated automated system linking customs, security and port management are blamed by the IMED for the terminal's underperformance.

The evaluation found that both the Cost-Benefit Ratio (CBR) and Internal Rate of Return (IRR) fell short of targets set in the original and revised project documents.

Project documents projected a financial CBR of 1.18 and an economic CBR of 1.03, with financial and economic IRRs of 9.80% and 12.30% respectively. Actual outcomes, however, show a financial CBR of 1.02 and an economic CBR of 0.54, while financial and economic IRRs stand at 4.18% and 6.52%—well below expectations.

IMED noted that the terminal is currently handling around 2–2.4 lakh twenty-foot equivalent units (TEUs) annually, far below the original target of 4.5 lakh TEUs. The report said output could rise to as much as 8 lakh TEUs a year if backup areas were expanded, but warned that without rapid infrastructure upgrades, full automation and stronger operational coordination, the terminal is unlikely to achieve its potential.

While the master plan envisaged berthing three large container vessels simultaneously, only two jetties are functioning. One of these two jetties, built with a cantilever dolphin structure, cannot accommodate large container ships, further constraining capacity.

The report also said the main gate is not fully operational even three years after project completion, forcing container trucks to use an alternative gate beside the administration building, raising security concerns and causing traffic congestion.

Implemented by the CPA under the Ministry of Shipping, the project period was extended by 75%, from July 2017-December 2019 to December 2022, prompting IMED to question planning and execution capacity.

IMED found that several vehicles – including Pajero SUVs, motorcycles, pickup trucks, an ambulance, pilot boats and speedboats – were procured at higher costs than estimated in the revised project document, while firefighting vehicles included in the plan were not purchased. During physical inspection, the project director could not present any of the procured vehicles on site, raising concerns about transparency and oversight.

The report also highlighted foreign port visits by officials from the Ministry of Shipping, CPA and the Bangladesh Army's 24 Engineering Brigade to ports in Singapore, New Zealand and Australia. However, no individual or group "lessons learnt" reports were submitted, leaving unclear whether the knowledge gained was applied to the project.

However, the overall project cost fell significantly. The original DPP estimated the cost at Tk1,868.28 crore, which was reduced to Tk1,229.58 crore in the revised DPP, and ultimately declined to Tk1,147.97 crore upon completion.

The IMED report further stated that although the estimated cost of the completed project was reduced by 34.18%, the implementation period was extended by 75%. In the feasibility study report, the estimated cost of constructing the physical infrastructure of the Patenga Container Terminal (PCT) was proposed at Tk759.33 crore without any draft or master layout plan. Based on the feasibility study, the project proposal (DPP) was prepared, and under the revised DPP the project was implemented at a cost Tk357.76 crore higher than the original estimate, amounting to Tk1,117.09 crore. IMED sought an explanation from the implementing agency, the CPA, regarding the justification for this increased cost.

IMED recommended preparing an urgent, comprehensive, internationally standard master plan to modernise Chattogram Port, urging the Ministry of Shipping to consider both banks of the Karnaphuli River—Patenga and Anwara—in an integrated manner.

Project director Mizanur Rahman Sarkar told TBS that the IMED report had not yet reached him but said all documents would be provided if explanations were sought. He said the Bangladesh Army's 24 Engineer Construction Brigade carried out the main works after ministerial approval, with the port authority overseeing implementation.

He added that the operator is currently running at about 50% capacity and is expected to reach full capacity around 2027. Responding to observations on the main gate and dolphin jetty, he said the main gate is operational and that the dolphin jetty is intended for lighter vessels and liquid cargo carriers, not large container ships. He also noted that gateway and operational components fall under separate projects with different project directors.

With Ramadan fast approaching, Bangladesh's supply chain for essential food items is coming under strain as a severe shortage of lighterage vessels has stalled cargo discharge at Chattogram Port's outer anchorage, raising fears of shortages and price hikes during the fasting month.

Port data show that as of 15 January, 108 cargo vessels were waiting at the outer anchorage and the Kutubdia channel, carrying more than 45 lakh tonnes of cargo. Of these, 17 vessels were loaded with around 12 lakh tonnes of Ramadan-related food items, including wheat, maize, soybean, chickpeas, lentils and edible oil. Another five vessels were carrying more than 2 lakh tonnes of sugar, while seven were loaded with fertiliser, and 25 carrying cement clinkers.

Under normal conditions, a 50,000-tonne mother vessel can complete discharge within seven to 10 days using lighterage vessels that shuttle cargo to river ports and terminals. But the current shortage has pushed waiting times to 20-30 days, with some ships unable to unload at all for days at a time.

Demand outstrips supply

The impact is already visible. The Queen Trader, which arrived at Kutubdia on 8 January carrying 54,000 tonnes of wheat for Akij Flour Mill, RB Traders and Crown Traders, has managed to unload only 5,870 tonnes in the past five days – far below the normal daily rate of 7,000-8,000 tonnes. At this pace, port sources estimate, full discharge could take around 40 days.

The Water Transport Coordination Cell (WTCC) says demand for lighterage vessels is far outstripping supply. On 13 January, 104 lighterage vessels were required to serve 90 mother ships, but only about 50 could be allocated.

To prioritise food consignments, authorities have temporarily stopped allocating lighterage vessels to large companies that operate their own fleets. Even so, shortages persist. Ten government fertiliser vessels have been waiting for more than a week without any lighterage support, raising the risk of stock shortages at government warehouses and renewed pressure on the agricultural sector.

Port Authority monitoring situation

Shipping Adviser Brigadier General M Shakhawat Hossain said the authorities are aware of the crisis.

"The ministry and the port authorities are monitoring the situation. The Department of Shipping, the Chattogram Port Authority and other relevant agencies are working on the ground to locate the missing lighterage vessels. If any irregularities are found, strict action will be taken," he told The Business Standard.

Staggering daily demurrage

Traders and shipping agents warn that the delays could destabilise markets just as Ramadan-related demand peaks. Sarwar Hossain Sagar, president of the Bangladesh Ship Handling and Berth Operators Association, said unloading operations have slowed to a near standstill.

"A ship that should leave in 10 days is now waiting 25 to 30 days," he said. "Importers are paying $15,000 to $20,000 per ship per day in demurrage. When you multiply that across nearly 90 vessels, the cost becomes staggering."

Industry estimates put the combined daily demurrage bill at $1.6-2 million, a burden that importers say will inevitably be passed on to consumers through higher food prices.

"This is no longer just a port problem," said a major food importer, requesting anonymity. "Every extra day a ship waits offshore adds to our costs. Those costs ultimately hit the wholesale and retail markets."

Several factors

WTCC officials say the shortage is being driven by several overlapping factors. Dense fog in recent weeks has disrupted river navigation, while 631 lighterage vessels are currently stuck at 41 ghats across the country, including 51 vessels engaged in transporting government-imported fertiliser. Delays in fertiliser bagging, shortages of trucks and labour, and congestion at government warehouses have prevented these vessels from unloading and returning to service.

"Out of around 1,020 registered lighterage vessels, if more than 630 are stuck, a shortage is inevitable," said WTCC Convener Haji Shafi. "On top of that, another 200 to 300 vessels are away delivering cargo across the country."

He added that lighterage traffic has also increased on routes serving Mongla and Payra ports, as well as on Indian routes, further reducing availability for Chattogram.

Ship handlers blame mismanagement

Ship handlers, however, argue that mismanagement and rigid rules are making the situation worse. They allege that some lighterage vessels are being used as floating warehouses ahead of Ramadan and that allocation practices are too inflexible.

Khairul Alam Sujan, former director of the Bangladesh Shipping Agents' Association, said stricter monitoring is needed.

"Using lighterage vessels as warehouses must be stopped, and the shipping ministry should bring all stakeholders to the table. Otherwise, the country risks food shortages during Ramadan," he said.

Operators also criticised regulations that prevent the use of privately owned or factory-owned lighter vessels at the outer anchorage.
"There are many vessels owned by importers that are sitting idle," said Sarwar Hossain. "Emergency flexibility is needed so alternative vessels can be used for essential food cargo. That alone could significantly ease the congestion."

Ripple to be felt through entire economy

With Ramadan drawing closer, business leaders warn that any prolonged disruption at Chattogram could ripple through the entire economy, tightening supplies in wholesale markets and pushing up prices for basic food items.

Port users say the crisis has moved beyond routine congestion and now threatens national supply-chain stability, calling for urgent, coordinated intervention to clear the backlog and protect Ramadan supplies.

A recently published Bangladesh Bank (BB) report shows a significant rise in financial inclusion of the rural population, especially women, in several sectors, including agent banking, deposit, CMSME, and cooperatives.

The strong rural footprint of banking infrastructure reflects a strategic push to reach beyond urban centers, BB said in its Financial Inclusion Report Bangladesh 2024.

The report offers a comprehensive update on the country’s financial inclusion landscape as of December 2024. It states that the extensive network of financial players, emphasis on rural connectivity, and integration of mobile financial services (MFS) showcase a deep commitment to inclusivity.

Data from the report reveals that internet banking and point-of-sale services recorded strong growth during the year, reflecting Bangladesh’s strategic push towards a cash-light, digital-first economy.

Agent banking continued its rapid expansion, with total outlets rising to 21,248, of which 85.6 percent were located in rural areas. The segment now serves more than 2.4 crore accounts, holding deposits of Tk 41,900 crore.

Notably, female ownership in agent banking reached 50 percent, indicating progress in gender inclusion.

Financial access among underserved groups also improved through no-frill accounts, which stood at 3.10 crore by the end of 2024. Nearly 70 percent of these accounts were based in rural regions, highlighting ongoing efforts to bring low-income populations into the formal financial system.

Credit flow to small businesses remained robust, with CMSME (cottage, micro, small and medium enterprises) loan disbursement amounting to Tk 62,600 crore. A growing share of this lending went to cottage and micro enterprises, supporting grassroots economic activity.

The microfinance sector remains crucial for inclusive growth, with over 42 million accounts, daily loans and savings, primarily benefiting rural and low-income populations.

Microfinance has remained pertinent in enabling small-scale entrepreneurs, farmers, and women-led enterprises to access funds that support livelihood activities and contribute to local economies, the BB report adds.

Cooperatives remain vital for accelerating financial inclusion across rural and urban communities and have been serving over 1.25 crore members (32 lakh women).

Despite its progress, the cooperative sector still faces some challenges, including the presence of inactive cooperatives, limited manpower, and the need for stronger transparency in management, the report mentions.

Gender and youth inclusion showed steady gains. Female-owned deposit accounts increased from 5.07 crore to 5.5 crore, an 8.48 percent rise.

School banking programmes covered 43.8 lakh accounts, with rural areas accounting for 53.28 percent of the total, while female participation reached 49.02 percent.

As per the report, key achievements include substantial growth in digital financial services, with MFS transactions of Tk 164,000 crore in 2024, a 32.02 percent increase from the previous year and total MFS accounts rising by 8.3 percent to 238.6 million, complemented by 18.3 crore MFS agents.

The report noted progress under the National Financial Inclusion Strategy, with 69 percent of targets fully achieved and 28 percent partially met by December 2024, while stressing the need for stronger digital literacy, infrastructure and interoperability to sustain momentum.

President Donald Trump on Saturday vowed to implement a wave of increasing tariffs on European allies until the United States is allowed to buy Greenland, escalating a row over the future of Denmark's vast Arctic island.

In a post on Truth Social, Trump said additional 10% import tariffs would take effect on 1 February on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Great Britain — all already subject to tariffs imposed by Trump.

Those tariffs would increase to 25% on 1 June and would continue until a deal was reached for the US to purchase Greenland, Trump wrote.

TRUMP WANTS GREENLAND FOR SECURITY, MINERALS

The president has repeatedly said Greenland is vital to US security because of its strategic location and large mineral deposits, and has not ruled out using force to take it. European nations this week sent military personnel to the island at Denmark's request.

"These Countries, who are playing this very dangerous game, have put a level of risk in play that is not tenable or sustainable," Trump wrote.

"The United States of America is immediately open to negotiation with Denmark and/or any of these Countries that have put so much at risk, despite all that we have done for them, including maximum protection, over so many decades," he said.

Protesters in Denmark support Greenland after Trump's takeover threat

Protesters in Denmark and Greenland demonstrated on Saturday against Trump's demands and called for the territory to be left to determine its own future.

The countries named by Trump on Saturday have backed Denmark, warning that the US military seizure of a territory in NATO could collapse the military alliance that Washington leads. After the US president's social media post, Norway's top diplomat reiterated support for Denmark and said tariffs should not be part of Greenland discussions.

"There is broad agreement within NATO on the need to strengthen security in the Arctic, including in Greenland," Norway's Foreign Minister Espen Barth Eide said in a statement. "We do not think the question of tariffs belongs in this context."

Trump had floated the idea of tariffs over Greenland on Friday, without citing a legal basis for doing so.

TRADE DEALS UNDER THREAT?

Saturday's threat could derail tentative deals Trump struck last year with the European Union and Great Britain. The deals included baseline levies of 15% on imports from Europe and 10% on most British goods.

Europeans send troops to Greenland as Trump presses claim

Tariffs have become the US president's weapon of choice in seeking to compel American adversaries and allies alike to meet his strategic and economic demands.

Trump said this week he would put 25% tariffs on any country trading with Iran as that country suppressed anti-government protests, though there has been no official documentation from the White House of the policy on its website, nor information about the legal authority Trump would use.

The US Supreme Court has heard arguments on the legality of Trump's sweeping tariffs, and any decision by the top US judicial body would have major implications on the global economy and US presidential powers.

Citing threats from Russia and China, Trump has repeatedly insisted he will settle for nothing less than ownership of Greenland, an autonomous territory of Denmark. Leaders of both Denmark and Greenland have insisted the island is not for sale and does not want to be part of the United States.

Danish and other European officials have pointed out that as Greenland is part of NATO, it is already covered by the alliance's Article 5 collective security pact.

The US already has a military base, Pituffik Space Base, in Greenland, with around 200 troops, and can deploy as many more forces as it wants under a 1951 agreement.

That has led many European officials to conclude that Trump is motivated more by a desire to expand US territory than security concerns.

Bangladesh Securities and Exchange Commission (BSEC) Chairman Khondaker Rashed Maqsood has said that many of the reform and development plans undertaken after the current commission assumed office could not be implemented on time due to an acute shortage of manpower.

However, he claimed that despite these limitations, the commission is actively working to develop the capital market. He made the remarks on Thursday afternoon while speaking as the chair at the "BSEC Capital Market Journalism Excellence Awards" ceremony held in the capital.

Regarding BSEC's performance, Khondaker Rashed Maqsood said that against an approved workforce of 370 positions, only 260 officials and employees are currently working at the commission.

He noted that as a government institution, BSEC cannot recruit or take measures beyond the approved manpower structure.

"Despite these constraints, we have tried our best to continue operations on an interim basis," he said.

The BSEC chairman further explained that due to the manpower shortage, the tenure of several committees formed under the commission has had to be extended repeatedly. At the same time, officials are being engaged in multiple investigation activities outside their respective departments. In many cases, a single official is involved in four to seven investigations simultaneously, significantly increasing workload pressure, he added.

However, he assured that there has been no compromise in the quality or effectiveness of investigations. According to him, the commission is taking lawful and effective actions based on the investigation reports submitted by BSEC's investigation officers.

On 30 April, the commission temporarily suspended 21 officials on charges of breaching discipline.

At the event, a total of nine journalists were awarded the BSEC Capital Market Journalism Excellence Award in three categories – print, television, and online – in recognition of their contributions to capital market journalism.

The BSEC chairman also highlighted the positive and constructive role of journalists in ensuring capital market stability, boosting investor confidence, and promoting the development of a transparent, accountable, and advanced capital market system.

Bangladesh's equity investors have suffered steep losses over the long term, with each $100 invested in the country's stock market shrinking to just over $41 in dollar terms, reflecting a value erosion of nearly 59%, according to data from Morgan Stanley Capital International (MSCI).

The figures underscore the prolonged underperformance of Bangladesh's capital market compared to both global and frontier peers, raising fresh concerns about market structure, policy consistency and investor confidence.

According to MSCI's cumulative index performance data calculated up to December 2025, the MSCI Bangladesh Investable Market Index (IMI) stood at $50.39 in gross return terms, far behind the MSCI Frontier Markets IMI at $235.35 and the MSCI All Country World Index (ACWI) IMI at $428.49.

The divergence becomes even starker when net returns are considered. While the MSCI ACWI delivered net returns of $407.18 and frontier markets returned $218.07, MSCI Bangladesh's net return dropped to just $41.25. This means an investor who put $100 into Bangladesh equities over the long run lost nearly 59% of the original value in US dollar terms.

Market analysts say the poor performance reflects a combination of stagnant stock prices, weak liquidity and significant currency depreciation. Although some shares have shown resilience in local currency terms, the sharp fall of the taka against the US dollar has severely eroded dollar-based returns. As a result, even periods of relative price stability in taka have translated into losses for foreign investors once exchange rate effects are taken into account.

MSCI data also show that since November 2009, the MSCI Bangladesh Index has generated an average net return of minus 3.34%, compared to positive returns of 6.29% for frontier markets and 10.07% for the global index. This long-term underperformance has placed Bangladesh at the bottom among comparable markets tracked by global fund managers.

The MSCI Bangladesh IMI, which currently includes 36 companies and covers about 99% of the free-float adjusted market capitalisation, has a total market value of around $5.18 billion. The index is heavily concentrated in a few large-cap stocks, including Square Pharmaceuticals, Beximco Limited, BRAC Bank, Beximco Pharmaceuticals and Grameenphone. Market participants say this narrow investable universe limits diversification opportunities for global funds and increases vulnerability to stock-specific shocks.

A managing director of a brokerage firm said global fund managers largely rely on MSCI indices when allocating capital across countries. Persistent regulatory interventions, such as the imposition of floor prices, frequent policy changes and restrictions on price discovery, have reduced Bangladesh's attractiveness in global index frameworks. Both MSCI and FTSE Russell have maintained restrictions on Bangladesh-related indices due to concerns over market accessibility, liquidity and transparency, further dampening foreign interest.

Foreign investor activity has also weakened sharply in recent months. Data from the Dhaka Stock Exchange show that monthly foreign turnover fell to just $5 million as of mid-December, compared to $30 million in October and $22 million in November. Earlier in 2025, foreign participation had shown brief signs of recovery, peaking at $41 million in May and $40 million in July, but those inflows proved short-lived as global investors steadily reduced exposure.

December witnessed notable selling pressure in several heavyweight stocks, leading to a net foreign outflow of around Tk118 crore. According to the monthly shareholding report, foreign investors sold shares worth roughly Tk120 crore during the month, while buying amounted to only about Tk2 crore. Most of the selling was concentrated in large-cap stocks that traditionally dominate foreign portfolios.

Currently, total foreign investment in the Dhaka bourse stands at around Tk13,000 crore, with only about 36% of listed companies having any foreign shareholding.

The MSCI Bangladesh Index, launched on 1 December 2009, is part of MSCI's broader factor-based analytical framework. MSCI Factor Classification Standards (FaCS) group equities by key drivers of risk and return such as value, size, momentum, quality, yield and volatility – factors widely supported by academic research and validated by MSCI. These factor groups are built using 16 underlying metrics, including book-to-price, earnings and dividend yields, leverage, long-term reversal, earnings variability and beta, derived from MSCI's Barra GEMLT global equity risk model to enable transparent and intuitive fund comparisons.

MSCI Inc, formerly Morgan Stanley Capital International, is a US-based global financial services firm headquartered in New York. It provides widely used equity, fixed-income and real estate indices, multi-asset risk analytics, and ESG and climate solutions, including the MSCI World, Emerging Markets and All Country World indices.

Analysts said the MSCI index methodology is more fundamentally driven and therefore preferred by global fund managers, while the Dhaka Stock Exchange's index construction does not fully follow such internationally accepted standards.

As a result, the country's indices often fail to accurately reflect fundamentally strong stocks. This mismatch means local indices provide limited guidance on underlying corporate performance, making it difficult for investors to make informed and timely investment decisions based solely on domestic benchmarks.

Ratna Patra, one of the directors of Square Pharmaceuticals PLC, has announced her intention to purchase 10 lakh shares of the company at the prevailing market price through both the public and block markets of the Dhaka Stock Exchange.

The disclosure was made on the DSE website yesterday, stating that the shares will be acquired within the next 30 working days.

Following the disclosure, shares of Square Pharmaceuticals closed 0.38% higher at Tk209.80 yesterday and emerged as the most traded stock on the DSE for the day. At the closing price, the total value of Ratna Patra's proposed purchase stands at around Tk21 crore, according to market estimates.

The announcement comes shortly after a similar move by the company's managing director, Tapan Chowdhury, who on 5 January expressed his intention to buy 20 lakh shares of Square Pharmaceuticals through the DSE.

Market participants view these back-to-back disclosures as a strong show of confidence by the company's top management at a time when the broader equity market continues to grapple with weak sentiment and low liquidity.

Analysts said insider share purchases by sponsor-directors are often interpreted as a positive signal, particularly during volatile or uncertain market conditions. Such moves suggest that management believes the company's share price does not fully reflect its underlying fundamentals or long-term growth potential. In the case of Square Pharmaceuticals, repeated insider buying over the years has helped reinforce investor confidence, especially among long-term shareholders.

Since 2020, four directors of Square Pharmaceuticals have collectively acquired about 1.51 crore shares of the company, with total investments amounting to nearly Tk300 crore. These purchases were made between February 2020 and April 2025, reflecting sustained confidence by sponsor-directors in the country's largest drug maker.

During this period, chairman Samuel S Chowdhury bought 50.25 lakh shares, while managing director Tapan Chowdhury also acquired an equal number. Two other directors, Ratna Patra and Anjan Chowdhury, purchased 30.25 lakh shares and 20.25 lakh shares respectively.

Square Pharmaceuticals is currently the second-largest listed company on the Dhaka Stock Exchange by market capitalisation, valued at around Tk18,500 crore, which represents roughly 5.6% of the total market capitalisation of the bourse.

According to the company's December shareholding statement, sponsors and directors jointly hold 43.59% of Square Pharma's shares. Institutional investors own 14.54%, foreign investors hold 14.52%, while general investors account for the remaining 27.35%.

The government's earnings from the stock market tumbled last year, hitting a five-year low as indices fell, trading slowed, and investor confidence wavered. Most of these taxes come from stock turnover, and the slowdown has taken a noticeable bite out of revenue.

According to Dhaka Stock Exchange (DSE) data, the government collected just Tk112 crore in FY25 – down a quarter from Tk153 crore the year before. To put it in perspective, this is the lowest since FY21. For context, back in FY22, the government raked in Tk286 crore despite a global market slowdown due to Covid-19, as the DSE was buzzing with activity.

That year, total trading hit a whopping Tk3.18 lakh crore, with daily turnover averaging over Tk1,300 crore – a 29% jump from the previous year.

In FY25, the DSE saw total trading of only Tk1.25 lakh crore, with an average daily turnover of Tk522 crore – a drop of nearly 16% compared with the previous year. The benchmark DSEX index opened strongly in August, reaching 6,016 points and seeing some days with turnover above Tk2,000 crore, as investors cheered the removal of the old government.

But the optimism didn't last long. Macroeconomic worries, weak corporate earnings, and low participation slowly dragged the market down. By late May, the index hit a low of 4,615 points before finishing the year at 4,838 – a 9% drop overall.

Activity on the market stayed sluggish, with investors hesitant to put fresh money in. The size of the market relative to the economy also shrank – the market capitalisation-to-GDP ratio fell to just 12%, showing that equities are playing a smaller role in Bangladesh's financial system. Valuations look tempting on paper, with the price-to-earnings ratio down to 8.6, but that alone hasn't been enough to lure investors back in meaningful numbers.

A managing director at a brokerage firm told The Business Standard, "The capital market is one of the government's money-making avenues. The more people trade, the more the government collects in taxes. Last year, the market barely moved, so revenue dropped."

He added that policymakers need to do more to get the market buzzing again. "After the recent government change, the market's been struggling with the economy. Once the new government takes office, focus should be kept on boosting activity. If the market picks up and businesses linked to it grow, government revenue will rise naturally," he said.

DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), lost 39 points last week (11-15 January) amid declining investor participation and selling pressure, with share prices of the majority of stocks falling and turnover shrinking.

Of the five trading sessions during the week, the index edged up in three sessions and fell in two, shedding 39 points or 0.80%, DSE data showed.

However, DSEX witnessed a jump of 88 points in the previous week (4–8 January) as investors focused on buying sector-specific stocks, largely blue-chip shares.

Last week, besides the declining indices – DS30, the blue-chip index by 2.22 points and DSES, the shariah index by 15 points – turnover fell to Tk1,900 crore week as overall market participation remained muted as most investors largely stayed on the sidelines with the daily average at Tk380 crore – down 20% from the previous.

Meanwhile, of the traded issues, prices of 93 stocks advanced, 268 declined, and 25 remained unchanged.

EBL Securities in its weekly market commentary said, "The capital bourse observed a weakening momentum after three consecutive weeks of recovery, as market sentiment turned cautious amid concerns over the ongoing domestic gas crisis and prevailing geopolitical tensions."

"The week opened on a dismal note, weighed down by broad-based selling in the first session as investors were rattled over emerging adversities."

"Although selective large-cap stocks saw tentative buying interest in subsequent sessions, it provided only limited support and was proven insufficient to offset the broadly subdued market trend. Meanwhile, investor participation was also shifted to the insurance sector owing to positive expectation over the recent sectoral developments, it noted.

Investors were mostly active in Pharma sector, followed by General Insurance and Bank.

Among the top turnover stocks, A-category shares – companies that pay dividends of over 10% – led the chart, while Z-category stocks dominated both the top gainers and top losers lists.

Of the top ten gainers, six were Z-category stocks, two A-category, and two B-category. Among the top ten losers, nine were Z-category stocks, with only one from the A category.

Alongside expanding the essential medicines list, the government is set to introduce a new pricing policy mandating pharmaceutical companies to ensure at least 25% of their annual sales from these essential drugs.

Under the new policy, companies that fail to meet the 25% threshold will be barred from seeking approval for new drugs, as applications will not be considered by the authorities.

The policy has been approved by the health ministry and is now awaiting gazette notification.

The government on 8 January announced the expansion of the National Essential Medicines List, adding 135 drugs and raising the total to 295, and said their prices will be fixed soon. It also announced that the National Medicine Pricing Policy 2025 has been finalised.

While officials describe the move as a major step towards improving access and affordability, pharmaceutical industry leaders have sharply criticised the policy, calling the mandatory supply requirement unrealistic and detached from market realities.

Manufacturers also allege that they were not meaningfully consulted during the formulation of either the expanded essential medicines list or the new pricing framework.

Industry representatives said that although their association submitted position papers and supporting documents to the pricing committee, these were not reflected in the final policy.

Infograph: TBS
Infograph: TBS

Why manufacturers avoid essential drugs

Dr Md Zakir Hossain, secretary general of the Bangladesh Association of Pharmaceutical Industries (BAPI), told The Business Standard that no pharmaceutical company in Bangladesh produces only essential medicines.

"Some companies produce just 5–10% essential drugs, while many newer firms produce none at all," he said. "Imposing a 25% requirement without revising prices would inevitably lead to financial losses or even factory closures."

He noted that the previous list of 117 essential medicines had remained largely unchanged for decades, with prices revised only twice in the last 32–33 years, making production commercially unviable.

"At current regulated prices, manufacturers incur heavy losses. This is why many companies avoid producing essential medicines," he said.

Dr Zakir warned that several saline manufacturers have already shut down due to compulsory pricing policies and pointed to regulatory bottlenecks in importing raw materials, which require multiple layers of approval. He added that companies have yet to receive official guidance on how the new pricing framework will be implemented.

Syed S Kaiser Kabir, chief executive officer and managing director of Renata, echoed similar concerns, describing the policy as disconnected from ground realities.

"The decision to mandate at least 25% of total production as essential medicines was taken without consulting the industry and bears no relation to the current market structure," he told The Business Standard.

"This reflects a command-economy mindset," he said. "If the government fixes prices below production costs, no company will manufacture the product. That is basic economics."

Questioning the demand assumptions, he added: "Where is the market for 25% of my total output to be essential drugs? Should companies manufacture excess products and stockpile them? No product can be produced without demand."

Abdul Muktadir, president of BAPI, said the health ministry had excluded industry stakeholders from the pricing process altogether.

"We were not consulted at any stage, and even now we do not know whether this policy will ultimately benefit or damage the pharmaceutical sector," he said.

Public health experts urge caution

Dr Md Abu Zafor Sadek, a pharmacist and former World Bank consultant, welcomed the expansion of the essential medicines list, calling it a positive step for public health. However, he cautioned that rigid price controls could undermine quality, disrupt supply continuity and discourage future investment.

He said collaborative pricing mechanisms, rather than unilateral price fixation, were more likely to serve patients effectively. On the proposed 25% production requirement, he added that business decisions tend to function best when guided by market demand rather than compulsion.

Government calls policy a 'landmark decision'

Announcing the updated essential medicines list on 8 January, Md Sayedur Rahman, special assistant to the chief adviser for the health ministry, said essential medicines address nearly 80% of common diseases.

He said price regulation of these medicines would directly improve affordability and availability for the majority of the population, describing the initiative as a "landmark decision".

According to him, a task force spent the past 14 months consulting manufacturers, researchers, international organisations and other stakeholders on the pricing framework.

"Not everyone agreed, and reaching full consensus is difficult," he said. "But the policy reflects broad-based consultation."

Once gazetted, all essential medicines will fall under price regulation, with no exceptions, he added.

'Win-win situation', says task force member

Syed Abdul Hamid, professor of health economics at Dhaka University and a member of the task force on the National Essential Medicines List, said prices of essential medicines were rarely adjusted after 1994, causing manufacturers to gradually abandon them.

"As companies shifted towards medicines with indicative prices, doctors prescribed those more frequently, forcing patients to buy relatively expensive alternatives," he said.

He argued that the new formula-based pricing system would bring essential medicines back into the market at affordable prices. By way of example, he said a drug that should have cost Tk2 was previously unavailable, forcing consumers to pay Tk10 for substitutes.

"Companies will still earn profits, but these will be regulated profits," he said, adding that the system would also curb aggressive marketing, as additional promotional costs could no longer be passed on to consumers.

"If implemented properly, this policy can create a win-win situation for both the public and the pharmaceutical industry," he said.

Cost-plus pricing for essential medicines

Under the new rules, essential medicines will be priced using a cost-plus benchmarking method to determine the maximum retail price (MRP), excluding VAT.

The government-nominated committee or the DGDA will set MRPs based on the cost of raw materials – including active pharmaceutical ingredients (API) and excipients – as well as primary packaging and class-based markups.

Primary packaging costs will be included as they come into direct contact with medicines, while secondary and tertiary packaging costs will be excluded to prevent unnecessary price escalation.

Reference pricing for non-essential medicines

For non-essential medicines, manufacturers will propose the MRP, subject to DGDA approval.

If seven or more companies produce a medicine, the median market price will be used as the benchmark under the Internal Reference Pricing system. If fewer than seven companies manufacture the drug, the lower of the internal or international reference price will apply.

In all cases, the approved MRP must remain within 15% of the benchmark price.

For imported finished medicines, prices will be set based on the C&F value, prevailing exchange rate and a predetermined markup.

New generics, biologics and API import rules

Patent-free new generic medicines not previously marketed in Bangladesh will be priced using a benchmarking method that includes raw material costs, primary packaging, secondary and tertiary packaging, and a 1.30 markup for essential medicines.

Biologics — including vaccines, insulin injections and gene therapies — will be priced based on an objective assessment of production costs and a regulated, sector-priority profit margin.

To promote domestic API production, importers will be required to obtain a no-objection certificate (NOC) from the DGDA before importing APIs.

An NOC will be granted if the importer can demonstrate that the API is either not produced locally in sufficient quantity or that domestic prices exceed international reference prices by more than 20%. The DGDA is required to issue the NOC within seven working days of receiving a complete application.

The Dhaka Stock Exchange (DSE) saw a moderate rise yesterday (14 January), driven largely by sharp price hikes in several risky and loss-making stocks, raising concerns among market participants about speculative activity overshadowing fundamentals.

The benchmark DSEX advanced 19 points, or 0.40%, to close at 4,966, while the blue-chip DS30 index gained 9 points to settle at 1,908. Despite the positive index movement, overall trading activity weakened, with turnover slipping 4% to Tk369 crore.

Market observers noted that the day's rally was heavily influenced by aggressive buying in financially weak companies, many of which have a history of losses, poor governance, or regulatory challenges.

Shares of FAS Finance and Peoples Leasing topped the gainers' chart after hitting the upper circuit, while Prime Finance and Fareast Finance also posted near double-digit gains. BD Welding and BD Thai Food joined the rally, continuing a recent trend where low-priced and high-risk stocks attract short-term traders seeking quick gains.

Analysts said such price movements are largely detached from company fundamentals and are often fuelled by speculative positioning than by any meaningful improvement in earnings prospects or balance-sheet strength.

Notably, several of the top gainers came from the non-bank financial institution (NBFI) segment, which has been under prolonged pressure due to weak asset quality, liquidity constraints and, in some cases, regulatory action.

Despite these challenges, their share prices surged as retail investors chased momentum amid a lack of clear direction in fundamentally strong stocks.

In contrast, a number of companies faced selling pressure, with Bangladesh Industrial Finance Co Ltd (BIFC) leading the losers after shedding the maximum allowed limit. Shares of Shyampur Sugar, Bay Leasing, HR Textile and Meghna Cement also declined notably.

Turnover concentration remained limited to a handful of stocks, with ACI, Square Pharmaceuticals, City Bank, Orion Infusion, Dominage Steel and Saiham Textile featuring among the most traded issues.

However, traders pointed out that broader market participation remained subdued, as institutional investors stayed largely on the sidelines.

The Chittagong Stock Exchange mirrored the positive sentiment, with its CSCX index rising 21 points to close at 8,612, while the CASPI index added 30 points to finish at 13,915. Turnover at the port city bourse stood at Tk8.59 crore.

All depositors of five troubled Islamic banks will receive their deposited funds within the next two years, Bangladesh Bank Governor Ahsan H Mansur said today (15 January).

"The decision on refunding deposits was taken based on the advice and consent of the Shariah Council and every effort is being made to protect the interests of depositors," he said while speaking at a press briefing regarding the Sammolito Islamic banks.

He added that the process of returning depositors' money has also been designed strictly in accordance with Shariah Council guidelines.

The governor clarified that the government is not only returning the principal amounts. "Investment profits or interest that were recorded on paper up to 2024 will also be paid to depositors."

"If someone kept their money in these banks for a long period … say, 10 years … they will receive their full principal along with the returns that were shown for that period," he said.

"Even if those investments were mismanaged or did not actually take place due to failures of the previous management, the decision has been made to compensate depositors in full," he added.

Mansur added that although Islamic banking principles generally require losses from genuine investments to be shared among partners, in this case the losses have not been passed on to depositors. Instead, the government has assumed responsibility for the losses.

According to the governor, revised accounts for the 2024–25 fiscal year show significant financial losses at these banks, but neither past nor current losses have been imposed on depositors.

"There are some limitations under Islamic Shariah principles, which is why not all additional benefits could be provided. However, both the actual deposits and the profits recorded on paper have been paid," he said.

The governor also mentioned that a small group of troublemakers attempted to create unrest at several branches, particularly Union Bank, but no major damage occurred. He urged ordinary depositors not to be influenced by such activities.

Reassuring the public once again, Ahsan H Mansur said that after the appointment of new management, especially for deposits made after the first of this month, there are no restrictions on withdrawals.

Depositors can withdraw funds on demand and are receiving returns at market-based rates, he added.

India's civil aviation authorities have slapped a penalty of Rs22.20 crore on the country's biggest airline IndiGo for massive disruption of services in December 2025.

The Directorate General of Civil Aviation (DGCA) said in a statement today (17 January) that in addition to the fine, Indigo has been ordered to pledge a bank guarantee of Rs50 crore in favour of the civil aviation sector regulator to ensure compliance with the directives and long term systemic correction.

Responding to the DGCA order, IndiGo, which has over 60% share of India's burgeoning civil aviation market, said it will take full cognisance and take appropriate measures.

The DGCA said the imposition of financial penalty was decided after a four-member committee appointed by it made a comprehensive assessment of the circumstances leading to large-scale delays and flight cancellations by IndiGo from 3 to 5 December 2025, resulting in cancellation of 2,507 flights and delays of 1,852 flights and causing inconvenience to over three lakh passengers stranded at various airports.

The total penalty includes one-time systemic penalties of Rs1.8 crore.

The committee observed that IndiGo's management failed to adequately identify planning deficiencies, maintain sufficient operational buffers and effectively implement the revised Flight Duty Time Limitation (FDTL) provisions, the statement said, adding "these lapses resulted in widespread flight delays and large-scale cancellations, causing inconvenience to passengers.

The DGCA said the inquiry committee conducted a detailed probe and thoroughly studied the network planning, rostering and software being deployed by Indigo for the same.

At its core, banking is about pricing and managing risk. Trouble begins when risk is quietly recycled within the system rather than reduced or spread adequately across the board. In trading bonds, that is increasingly what is happening in the country’s banking sector.

Commercial lenders issue subordinated bonds and buy them from one another to strengthen capital in line with regulatory requirements.

While this boosts capital ratios on paper, it does not attract funds from corporates or individual investors to the desired level, which goes against the very purpose of bank bond trading. The practice keeps risk tightly concentrated within the banking sector.

Put simply, it is like households in a neighbourhood lending to and borrowing from each other, rather than spreading risk by transacting with better-off groups. The exposure does not vanish; it just circulates.

In the three years since 2022, banks accounted for around 80 percent of subordinated bond investors, according to official data. The consequence hit three years later, when the Bangladesh Bank in 2025 put five ailing lenders in the merger process.

Of them, four banks collectively owe institutional investors about Tk 2,900 crore in Mudaraba subordinated bonds and more than Tk 1,000 crore in Mudaraba perpetual bonds.

That enormous Tk 3,000 crore could simply disappear from the books, since bond investments do not have the insurance protection deposits enjoy.

RISK BUILDING INSIDE

Under banking regulations, subordinated bonds count as Tier-2 capital. In the event of a failure, these bonds are repaid only after depositors and senior creditors, making them higher risk and higher return than deposits.

Banks deduct subordinated bonds from their demand and time liabilities but lend using the bond proceeds. This can worsen liquidity mismatches in a fragile banking system.

When banks subscribe to one another’s bonds, no fresh capital enters the sector. Even when corporates appear to buy bonds, many of these investors are provident funds of other banks, keeping exposure within the system.

“Deposits of one bank are effectively being shown as capital of another,” said AF Nesaruddin, former president of the Institute of Chartered Accountants of Bangladesh (ICAB). “That erodes the quality of capital.”

The Bangladesh Bank has previously recognised the danger of direct cross-buying, where two banks subscribe to each other’s bonds. The banking regulator instructed banks to avoid such transactions to limit contagion risk.

Banks then adopted somewhat a circular subscription, according to data.

Under this arrangement, Bank A buys Bank B’s bonds, Bank B buys Bank C’s, and Bank C buys Bank A’s. While technically compliant with the rules, the effect is much the same.

“It keeps almost the same risk within the system,” said Asif Khan, president of CFA Society Bangladesh, a platform for practitioners in the investment and fund management industry.

“If one bank fails, the stress spreads to others,” he added.

Khan said the practice goes against the spirit of the central bank’s directive but said banks are driven into it by a lack of investors. According to him, strengthening the demand side of the bond market could resolve the problem.

BANKS ARE NOT THE VILLAINS

Bankers and analysts say heavy reliance on bank-to-bank bond subscriptions is caused by a weak bond market rather than reckless behaviour by the lenders.

The country’s bond market has historically been thin, with limited liquidity and a narrow investor base. Although some subordinated bonds are listed on the stock exchange, trading is rare, making exits difficult.

As a result, individual investors shy away, while corporates hesitate to lock funds into long-term instruments.

Interest rates also work against bank bonds. In recent years, yields on risk-free treasury bills and bonds have exceeded returns on subordinated bank bonds.

“Why would investors subscribe to subordinated bonds when treasury rates are higher?” said Tanzim Alamgir, managing director and chief executive officer of UCB Investment Limited, which manages around 50 subordinated bonds.

Shah Md Ahsan Habib, a professor at the Bangladesh Institute of Bank Management (BIBM), said the lack of institutional investors leaves banks with few options.

“There are no vibrant bond markets and no institutional investor base, so banks are forced to go to other banks,” he commented.

Syed Mahbubur Rahman, a former chairman of the Association of Bankers, Bangladesh, said banks have limited scope to sell subordinated bonds to corporates.

“Corporates are reluctant to invest in long-term instruments, while individual investors want liquidity,” said Rahman, who is also the managing director and CEO of Mutual Trust Bank.

THE SCALE OF EXPOSURE

According to an analysis of 18 banks’ 2024 financial statements, around 80 percent of subordinated bonds were subscribed by other banks, while the rest went to corporates.

Among corporate subscribers, provident funds of banks still accounted for a large share.

In 2022, banks accounted for 96 percent of subscriptions. The ratio fell to 86 percent in 2023, showing a gradual rise in non-bank participation, though the market is still heavily skewed towards banks.

Of the 18 banks, Pubali Bank attracted the highest share of corporate subscribers at 65 percent. Nine banks failed to attract any corporate investors at all.

According to 2024 data, Agrani Bank subscribed Tk 350 crore of Mudaraba subordinated bonds issued by Exim Bank, while Standard Bank invested Tk 125 crore.

More than half of Exim Bank’s bondholders are now banks facing potential losses.

Mudaraba bonds issued by First Security Islami Bank and Union Bank were fully subscribed by other banks.

Since 2016, banks have issued subordinated bonds worth more than Tk 35,000 crore, according to the Bangladesh Securities and Exchange Commission (BSEC).

WHAT REGULATORS ADMIT

A senior central bank official said the regulator ordered banks to include corporate subscribers after realising that bank-to-bank subscriptions weaken capital quality.

Arief Hossain Khan, spokesperson for the Bangladesh Bank, said subordinated bonds allow banks to reduce their capital deficit.

“It is true that when a bank invests in another bank’s bond, it ultimately sends deposits to capital, which is not happy information. So, the central bank is considering this and trying to increase participation of corporates instead of banks,” he added.

Abul Kalam, spokesperson for the BSEC, said subscriptions by banks do not create real capital, even though they count as Tier-2 capital.

“Deposits of one bank are shown as capital of another,” he said.

He added that small savings and corporate funds need to be channelled into bonds for the proceeds to qualify as genuine capital.

While BSEC requires bond issuers to list, a lack of buyers due to low trust in issuers remains a problem, added Kalam.

Canada’s Prime Minister Mark Carney and Chinese President Xi Jinping agreed on a raft of measures from trade to tourism on Friday at the first meeting between the countries’ leaders in Beijing in eight years.

The Canadian leader hailed a “landmark deal” under a “new strategic partnership” with China, turning the page on years of diplomatic spats, tit-for-tat arrests and tariff disputes.

Carney has sought to reduce his country’s reliance on the United States, its key economic partner and traditional ally, as President Donald Trump has aggressively raised tariffs on Canadian products.

“Canada and China have reached a preliminary but landmark trade agreement to remove trade barriers and reduce tariffs,” Carney told a news conference after meeting with Xi.

Under the deal, China — which used to be Canada’s largest market for canola seed — is expected to reduce tariffs on canola products by March 1 to around 15 percent, down from the current 84 percent.

China will also allow Canadian visitors to enter the country visa‑free.

In turn, Canada will import 49,000 Chinese electric vehicles (EVs) under new, preferential tariffs of 6.1 percent.

“This is a return to the levels that existed prior to recent trade frictions,” Carney said of the EV deal.

Trump, who has cut off trade talks with Ottawa and insists the United States does not need any products from its northern neighbour, told reporters it was “good” that Carney had secured an agreement during his trip. “If he can get a trade deal with China, he should do that,” the president said.

The head of the Canola Council of Canada, Chris Davison, called the deal an “important milestone”.

But the Global Automakers of Canada, an industry group, voiced concern.

The deal may be an “expression of goodwill” to ease pressure on the canola industry, but allowing thousands of Chinese EVs into Canada at a low tariff rate “risks creating significant market distortions” and could hurt companies that employ Canadians, the group said.

Welcoming Carney in the Great Hall of the People, Xi said China-Canada relations reached a turning point at their last meeting on the sidelines of the APEC summit in October.

“It can be said that our meeting last year opened a new chapter in turning China-Canada relations toward improvement,” Xi told the Canadian leader.

“The healthy and stable development of China-Canada relations serves the common interests of our two countries,” he said, adding he was “glad” to see discussions over the last few months to restore cooperation.

Ties between the two nations withered in 2018 over Canada’s arrest of the daughter of Huawei’s founder on a US warrant, and China’s retaliatory detention of two Canadians on espionage charges.

The two countries imposed tariffs on each other’s exports in the years that ensued, with China also accused of interfering in Canada’s elections.

But Carney has sought a pivot, and Beijing has also said it is willing to get relations back on “the right track”.

The Canadian leader, who on Thursday met with Premier Li Qiang, is also scheduled to hold talks with business leaders to discuss trade.

Canada, traditionally a staunch US ally, has been hit especially hard by Trump’s steep tariffs on steel, aluminium, vehicles and lumber.

Washington’s moves have prompted Canada to seek business elsewhere.

In October, Carney said Canada should double its non-US exports by 2035 to reduce reliance on the United States.

But the United States remains far and away its largest market, buying around 75 percent of Canadian goods in 2024, according to Canadian government statistics.

While Ottawa has stressed that China is Canada’s second-largest market, it lags far behind, buying less than four percent of Canadian exports in 2024.

A time-bound structural and policy rejig of the revenue system is imperative for restoring and sustaining Bangladesh's macroeconomic stability as insufficient domestic resources upend government plans and generate overall volatility.

To this end, a multi-stakeholder taskforce on revenue reform is likely to recommend that the government complete major tax-policy reforms in near and midterms within next five years, beginning under the current interim government and finishing under the upcoming elected one.

The 'National Taskforce on Tax Restructuring', formed in October last following the political regime change, in order to review the country's revenue framework, is scheduled to submit its report by January 31, 2026, in line with its mandate.

The taskforce will focus on structural adjustments and development of the overall tax framework to help Bangladesh achieve its fiscal goals.

Talking to The Financial Express, Dr Zaidi Sattar, who heads the taskforce, said the report would place strong emphasis on revenue-policy reforms aimed at removing longstanding bottlenecks to trade and investment.

According to a notification issued in October last, the taskforce will prepare recommendations for raisin the tax-to-GDP ratio to a desired level and suggest both short- and long-term policy measures for a business- and trade-friendly tax regime that supports overall economic growth.

"Although we were asked to provide short- and long-term recommendations, we believe most of the reforms need to be implemented within the medium term," says the economist.

Dr Sattar, chairman of the Policy Research Institute (PRI), thinks the current interim government may be able to implement some of the recommendations but the bulk of the reforms would need to be carried forward by the next elected government.

Referring to the ongoing process of bifurcation of the revenue administration, he says the government is creating two separate divisions but the committee's recommendations would focus solely on the tax-policy division.

Responding to a query on the tax-GDP target up to 2035 set in the medium and long-term revenue strategy (MLTRS) framed by the National Board of Revenue, Dr Sattar said Bangladesh must raise the ratio in line with its transition from the least-developed country (LDC) status.

The NBR targets to raise Bangladesh's tax-to-GDP ratio to 10.5 by the fiscal year 2034-35, as part of its newly formulated 10-year revenue strategy.

"For a graduating LDC, the tax-to-GDP ratio should be upgraded to an average range of 15 to 20 per cent," he added.

The interim government formed the high-powered national taskforce to restructure the country's tax system with the aim of boosting revenue collection and raising the tax-GDP ratio to an acceptable level.

The other members of the panel include Dr. Sultan Hafiz Rahman, Professorial Fellow at BRAC Institute of Governance and Development (BIGD), Dr. Syed Mainul Ahsan, Professor Emeritus at Concordia University, Canada, Dr. Mohammad Zahid Hossain, Chairman of Bangladesh Krishi Bank, and Dr. Sajjad Zohir, Executive Director of the Economic Research Group (ERG).

In September last, the government dissolved the previous committee on NBR reform. The present taskforce was formed within a week of the dissolution of the committee.

A much-hyped 'social business' is getting institutionalized through newly introduced microcredit banks meant for empowering grassroots down-and-outs and firing up rural economy across Bangladesh.

In what officials tout as a landmark move for the country's financial landscape, the Advisory Council of the post-uprising interim government Thursday endorsed the Microfinance Bank Ordinance that allows individuals and organisations to set up such banks for commercial run in a newly defined way.

"This latest law is set to revolutionise the microcredit sector by allowing eligible micro-finance institutions (MFIs) to transition into full-fledged specialised banks," says one official.

With Chief Adviser of the Interim Government Professor Muhammad Yunus, the council meeting approved the ordinance broadly aimed at "deepening financial inclusion and providing the unbanked population with more sophisticated financial tools beyond simple credit".

The Nobel-laureate head of interim government is a longtime proponent of switching to 'social business' dedicated to advancing social-uplift goals instead of aggrandizing commercial interests.

Earlier, the Financial Institutions Division (FID) had drafted the law and consulted stakeholders before making the final version of the draft. After completion all the formalities, the draft law was placed before the cabinet meeting Thursday.

The law introduces a structured framework for evolution of the microfinance sector, which currently serves over 40 million clients. The new banks will operate primarily as "social businesses", officials said.

Each of the potential microfinance banks will have to have minimum Tk 5.0 billion as authorised capital while Tk 2.0 billion as paid-up capital.

Under provisions of the law, investors can recover their initial capital but profits beyond that must be reinvested into the bank to "further social goals rather than being distributed as traditional dividends".

The ordinance ensures that 60 per cent of the shares in the new banks would be held by the poor members (borrowers) themselves aimed at ensuring the empowerment of the down-and-outs at grassroots levels.

While MFIs currently operate under the Microcredit Regulatory Authority (MRA), the newly formed microfinance banks will fall under direct regulation and supervision of the central bank (Bangladesh Bank).

Unlike traditional MFIs, these banks will be authorised to accept public deposits, offer insurance products and remittance services, access domestic and foreign grants and loans more easily, provide specialised credits for microenterprises and cottage industry.

A senior official says the microfinance-bank ordinance does not force all NGOs to become banks. "NGOs can choose to convert entirely or only transfer specific branches into the new banking structure, while their remaining operations continue under the MRA," he told The Financial Express.

Meanwhile, the approval for the ordinance comes amid debate within the development sector-some liking, some loathing.

The Credit and Development Forum (CDF) hails the move as a "landmark step" to eliminate high-interest borrowings from commercial banks. Some critics express concern about the potential "commercialization" of a sector built on social mobilisation.

However, the government maintains that the "Social Business" clause is a robust safeguard against profit-seeking motives, ensuring the mission remains focused on poverty alleviation.

By allowing these institutions to collect deposits, the government hopes to reduce the cost of capital for micro-loans, which has historically been high due to MFIs' reliance on commercial bank loans.

This shift is expected to provide a significant boost to the rural economy and small-scale entrepreneurs ahead of the upcoming fiscal year, the authorities say, on an upbeat note on the emergent financial derivation.

Industry experts and business leaders have urged the government to adopt business-friendly policies to develop a sustainable packaging sector, arguing that it has the potential to surpass the readymade garment (RMG) industry in export earnings.

The call was made at the closing ceremony of Garment Technology Bangladesh (GTB) 2026, held yesterday at the International Convention City Bashundhara (ICCB) in the capital.

Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association (BGAPMEA) President Md Shahriar said corrupt individuals involved in money laundering had posed as businessmen and siphoned off large sums from banks, adding that genuine entrepreneurs never plunder a country's wealth.

Bangladesh Textile Mills Association (BTMA) President Showkat Aziz Russell stressed the need for self-reliance, noting that although Bangladesh has achieved self-sufficiency in packaging and accessories, certain policies are pushing the industry towards decline.

He warned that allowing 100% duty-free "free of cost" imports would result in all products being sourced from abroad, threatening the survival of local factories. He also called for a reduction in excessive port charges and levies to enhance the competitiveness of domestic businesses.

Speaking as the chief guest, former commerce and home minister Altaf Hossain Chowdhury expressed optimism after witnessing the sector's dynamism and capacity. He said packaging and accessories exports reached $7.45 billion in the last fiscal year and could surpass the garment sector if provided with the right support.

He also said the BNP would stand by entrepreneurs and work to resolve the sector's challenges if it forms the next government.

Bangladesh Employers' Federation (BEF) President Fazle Shamim Ehsan was present as a special guest at the event.

The four-day event, the country's largest garment technology exhibition, was jointly organised by ASK Trade & Exhibitions Pvt Ltd and the BGAPMEA.

As part of efforts to diversify and expand export trade, the BGAPMEA organised the 15th Garments Accessories and Packaging Expo (GAPEXPO), which featured 350 member and non-member companies across 1,500 stalls.

Companies from India, China, Pakistan, Taiwan, Australia, Germany and Dubai participated in the exhibition. Machinery, raw materials and locally manufactured garments accessories and packaging products were showcased.

Organisers said the expo attracted more than 1,00,000 visitors, creating effective linkages between buyers and sellers. On the final day, eight participating stalls were awarded crests in recognition of being selected as the "best stalls."

Bangladesh's equity investors have suffered steep losses over the long term, with each $100 invested in the country's stock market shrinking to just over $41 in dollar terms, reflecting a value erosion of nearly 59%, according to data from Morgan Stanley Capital International (MSCI).

The figures underscore the prolonged underperformance of Bangladesh's capital market compared to both global and frontier peers, raising fresh concerns about market structure, policy consistency and investor confidence.

According to MSCI's cumulative index performance data calculated up to December 2025, the MSCI Bangladesh Investable Market Index (IMI) stood at $50.39 in gross return terms, far behind the MSCI Frontier Markets IMI at $235.35 and the MSCI All Country World Index (ACWI) IMI at $428.49.

The divergence becomes even starker when net returns are considered. While the MSCI ACWI delivered net returns of $407.18 and frontier markets returned $218.07, MSCI Bangladesh's net return dropped to just $41.25. This means an investor who put $100 into Bangladesh equities over the long run lost nearly 59% of the original value in US dollar terms.

Market analysts say the poor performance reflects a combination of stagnant stock prices, weak liquidity and significant currency depreciation. Although some shares have shown resilience in local currency terms, the sharp fall of the taka against the US dollar has severely eroded dollar-based returns. As a result, even periods of relative price stability in taka have translated into losses for foreign investors once exchange rate effects are taken into account.

MSCI data also show that since November 2009, the MSCI Bangladesh Index has generated an average net return of minus 3.34%, compared to positive returns of 6.29% for frontier markets and 10.07% for the global index. This long-term underperformance has placed Bangladesh at the bottom among comparable markets tracked by global fund managers.

The MSCI Bangladesh IMI, which currently includes 36 companies and covers about 99% of the free-float adjusted market capitalisation, has a total market value of around $5.18 billion. The index is heavily concentrated in a few large-cap stocks, including Square Pharmaceuticals, Beximco Limited, BRAC Bank, Beximco Pharmaceuticals and Grameenphone. Market participants say this narrow investable universe limits diversification opportunities for global funds and increases vulnerability to stock-specific shocks.

A managing director of a brokerage firm said global fund managers largely rely on MSCI indices when allocating capital across countries. Persistent regulatory interventions, such as the imposition of floor prices, frequent policy changes and restrictions on price discovery, have reduced Bangladesh's attractiveness in global index frameworks. Both MSCI and FTSE Russell have maintained restrictions on Bangladesh-related indices due to concerns over market accessibility, liquidity and transparency, further dampening foreign interest.

Foreign investor activity has also weakened sharply in recent months. Data from the Dhaka Stock Exchange show that monthly foreign turnover fell to just $5 million as of mid-December, compared to $30 million in October and $22 million in November. Earlier in 2025, foreign participation had shown brief signs of recovery, peaking at $41 million in May and $40 million in July, but those inflows proved short-lived as global investors steadily reduced exposure.

December witnessed notable selling pressure in several heavyweight stocks, leading to a net foreign outflow of around Tk118 crore. According to the monthly shareholding report, foreign investors sold shares worth roughly Tk120 crore during the month, while buying amounted to only about Tk2 crore. Most of the selling was concentrated in large-cap stocks that traditionally dominate foreign portfolios.

Currently, total foreign investment in the Dhaka bourse stands at around Tk13,000 crore, with only about 36% of listed companies having any foreign shareholding.

The MSCI Bangladesh Index, launched on 1 December 2009, is part of MSCI's broader factor-based analytical framework. MSCI Factor Classification Standards (FaCS) group equities by key drivers of risk and return such as value, size, momentum, quality, yield and volatility – factors widely supported by academic research and validated by MSCI. These factor groups are built using 16 underlying metrics, including book-to-price, earnings and dividend yields, leverage, long-term reversal, earnings variability and beta, derived from MSCI's Barra GEMLT global equity risk model to enable transparent and intuitive fund comparisons.

MSCI Inc, formerly Morgan Stanley Capital International, is a US-based global financial services firm headquartered in New York. It provides widely used equity, fixed-income and real estate indices, multi-asset risk analytics, and ESG and climate solutions, including the MSCI World, Emerging Markets and All Country World indices.

Analysts said the MSCI index methodology is more fundamentally driven and therefore preferred by global fund managers, while the Dhaka Stock Exchange's index construction does not fully follow such internationally accepted standards.

As a result, the country's indices often fail to accurately reflect fundamentally strong stocks. This mismatch means local indices provide limited guidance on underlying corporate performance, making it difficult for investors to make informed and timely investment decisions based solely on domestic benchmarks.

The Bangladesh Securities and Exchange Commission (BSEC) has blamed merchant banks for the complete absence of initial public offerings (IPOs) over the past one and a half years, saying no IPO could be approved because no applications were submitted during the period.

Speaking at a press conference today (14 January), BSEC Director and Spokesperson Mohammad Abul Kalam said following the 2024 July uprising, merchant banks did not submit any IPO proposals, resulting in zero approvals.

Although the new commission had been working on revising the IPO rules after assuming office, the submission of IPO applications was never suspended, he added.

"Unfortunately, even under the previous rules, no company came forward to apply for an IPO after the mass uprising, despite having the opportunity to do so under the Public Issue Rules, 2015," he said. "As there were no applications, the question of verification or approval by the commission did not arise."

Placing responsibility squarely on merchant banks, the BSEC spokesperson said, "They could have submitted applications. Without applications, how can BSEC scrutinise or approve IPOs?"

He also noted that during the tenure of the previous commission, six IPO applications were under process, of which five were cancelled and one was withdrawn due to specific and serious deficiencies.

The press conference was organised at the BSEC multipurpose hall in Agargaon to explain various aspects of the Bangladesh Securities and Exchange Commission (Public Offer of Equity Securities) Rules, 2025.

Explaining the new IPO rules, Abul Kalam said the revised framework was finalised after extensive consultations with stakeholders to make the IPO process more transparent, market-driven and accountable.

Since assuming office, the new commission has been actively working to bring quality and fundamentally strong companies to the capital market, he added.

He said discussions with issuers and issue managers revealed several structural problems – particularly related to pricing – that had discouraged good companies from going public. The lack of transparency and market alignment in IPO pricing had created a confidence gap among potential issuers.

To address this, the commission formed a task force and undertook reforms, including measures to ensure greater transparency and rationality in the pricing process. "With these reforms, pricing will no longer be a major barrier for companies seeking listing," he said.

The new rules strictly prohibit cartelisation, artificial price bidding and placing bids beyond actual financial capacity. Six specific conditions have been imposed to prevent such practices, along with penal provisions for violations.

"These restrictions are meant to ensure that entities without real capacity to purchase cannot intentionally quote inflated prices to mislead the market," he said, defining cartelisation as secret collusion aimed at manipulating prices for unfair gains.

He also said the commission received 170 opinions on the draft rules from general investors, institutional investors, and other market participants, including 38 detailed analytical submissions.

Each comment was reviewed in detail during commission meetings, and issues with broad stakeholder consensus were incorporated into the final rules, he added.

He also pointed out that the 2006 IPO rules lacked clarity on critical issues such as merit-based evaluation, physical inspection, stock exchange recommendations, and issuers' freedom to choose a stock exchange.

These gaps have now been addressed. The new rules also clarify that issuers are not required to apply to both stock exchanges and may choose either one, he said.

The press conference also noted that earlier fixed-price IPOs were often negotiated rather than market-driven, creating moral hazard. Under revised rules, the commission has restored a true book-building system, tightening and improving transparency in indicative price discovery.

Issuers and issue managers must now justify prices using valuation methods and validate them through roadshows, securing at least 40% demand from eligible investors.

The event was attended by BSEC Executive Director Hasan Mahmud, Additional Director Lutf ul Kabir, and Joint Director and Public Relations Officer Shariful Alam.