The settlement rate for letters of credit (LCs) reached Tk123.55 per US dollar at several commercial banks yesterday, marking an increase of as much as Tk0.70 over the past 15-20 days.

Several of the country's leading business groups settled their LCs at Tk123.55 yesterday, The Business Standard understands after discussions with business groups, senior commercial bank officials and the central bank. The findings indicate that the dollar rate has been rising steadily over the past two weeks.
A senior official at one of the country's largest business conglomerates told TBS that the dollar has appreciated by about Tk0.70 over the past 15 to 20 days. "We are now paying significantly more for every dollar than before. The settlement rate used to be Tk122.85."
The business group also shared an estimate of the additional cost. It said settling a $2 million LC now costs about Tk1.4 crore more than before, substantially increasing import costs. The company warned that the higher dollar price could further fuel inflation.

A senior Bangladesh Bank official told TBS that a handful of commercial banks are driving up the dollar rate. According to the official, when one bank purchases dollars from exchange houses at higher rates, the exchange houses seek to sell dollars to other banks at the same price, creating instability in the foreign exchange market.The official added that the dollar rate also rises when a bank purchases more dollars from exchange houses than it actually needs. Since banks buy dollars from exchange houses and then sell them for LC settlements with a profit margin, higher purchase prices ultimately translate into higher settlement rates.Senior officials at several commercial banks acknowledged that a few banks are paying above-market prices for dollars, influencing the broader foreign exchange market. They said the Bangladesh Bank should take appropriate action against those institutions, noting that aggressive dollar purchases by several banks in late 2022 had similarly destabilised the market.

Bankers, on the other hand, said demand for dollars has been driven primarily by payments for government fuel imports. Although the volume of fuel imports has remained largely unchanged, the cost of settling those LCs has increased because global oil prices surged during the Iran conflict, affecting payments for fuel import contracts opened about two months ago.

They also noted that remittance inflows slowed considerably in June. During the first 28 days of the month, remittances exceeded $2.5 billion. By comparison, Bangladesh received more than $3 billion in remittances in each of the previous six months.

At the same time, export earnings fell by 7.07% year-on-year in May. According to the latest data from the Export Promotion Bureau (EPB), Bangladesh exported goods worth $4 billion in May, down from $4.73 billion in the same month last year.

Bankers said the government is currently facing heavy demand for dollars to finance fuel imports while foreign currency inflows remain comparatively weak.

They also warned that pressure on the dollar market could intensify in the coming months. Private sector credit growth currently stands at just 4.75%, indicating subdued business activity. However, as businesses expand and import demand recovers, LC openings are expected to rise, placing additional pressure on the dollar market. Bankers expressed concern over how high the exchange rate could climb under such circumstances.So far in the current fiscal year, Bangladesh Bank has purchased around $6.5 billion from commercial banks.Bankers said there is now a significant gap between Bangladesh Bank's published inter-bank dollar rate and the actual rates prevailing in the market. While the rate remains at Tk122.85 per dollar, they argue that the market is trading well above that level, making the official rate non-reflective of actual transactions. The reference rate is Tk123.18.

Yesterday, the BC selling rate quoted by various commercial banks ranged between Tk123.55 and Tk123.60 per dollar.Former Bangladesh Bank governor Ahsan H Mansur said, "Bangladesh Bank has a tendency to keep the dollar rate artificially fixed. That should not be the case because the exchange rate should be determined by the market. The price at which banks are currently buying remittances reflects the true value of the dollar. However, the central bank continues to show an average rate of Tk122.85, which is not reflective of the real market."

He added, "It is essential to activate the interbank foreign exchange market. However, the interbank market has yet to become fully functional."

The treasury head of one commercial bank said interbank foreign exchange transactions remain very limited because banks are instead buying dollars directly from exchange houses at rates between Tk123.50 and Tk123.60.

According to Bangladesh Bank data, a total of $63.5 million was traded in the interbank market over the past five working days.

The treasury head of another private commercial bank said the exchange rate published by Bangladesh Bank is significantly below the actual market rate and therefore does not accurately reflect prevailing market conditions.

South Korea will invest nearly $1.2 trillion -- equivalent to more than two-thirds of its GDP -- in a new chip-building hub and AI data centres over several years, as it seeks to profit from soaring demand while developing previously neglected regions.

The enormous cash injection comes as Asia’s fourth-largest economy rides high on a global AI boom -- with South Korean memory chipmakers emerging as a crucial cog in the fast-moving industry.

“Speed is the only path to survival. We must secure the core elements of artificial intelligence faster than any other nation,” President Lee Jae Myung said in Seoul at an event to unveil the public-private collaboration.

Samsung Electronics and SK Hynix will make a record investment of 800 trillion won (around $520 billion) in a new semiconductor fabrication hub in the country’s southwest, the government said.

Both companies have seen profits and share prices skyrocket in recent months, as frenzied demand for AI infrastructure squeezes the global supply of memory chips.

The government also announced a separate investment of a quadrillion won (around $650 billion) in AI data centres over the next 10 years.

The plans are in line with Lee’s agenda for industrial development in regions outside the capital, and Industry Minister Kim Jung-kwan said the Samsung-SK Hynix project will comprise four fabrication plants.

“We will develop the southwestern region into a second semiconductor production hub,” he said. Samsung Electronics and SK Hynix will each build two plants under the 800 trillion won project, according to Kim’s presentation slide.

“Permit approvals and construction timelines will be dramatically shortened to rapidly expand production capacity,” Kim said.

“Through this, we will maintain an overwhelming market leadership and a decisive technological gap in the memory semiconductor sector.”

Science Minister Bae Kyung-hoon announced that the country will invest 550 trillion won on AI data centres by 2029.

“By 2035, an additional 10-gigawatt AI data centre will be built, with a total investment exceeding 18.4 gigawatts and 1,000 trillion won.”

The new investment is by far South Korea’s largest.

The southwestern region of Honam -- a traditional liberal stronghold encompassing Gwangju and the Jeolla provinces -- has long lagged behind the more industrialised southeast.

This disparity dates back to rapid economic development under former president Park Chung-hee in the 1960s and 70s.

But without incentives for companies to voluntarily relocate, the massive investment could backfire, warned Kim Dae-jong, a professor of Business Administration at Sejong University.

This could, in turn, hurt the nation’s semiconductor competitiveness.

“It is essential to minimise the financial burden, amounting to hundreds of trillions of won, as well as the time-related risks faced by companies,” said Kim.

RENEWABLES

Analysts say there are abundant renewable electricity resources in the southwest, making it possible for companies to meet their commitments to boosting green energy use.

But they caution that building an entirely new semiconductor manufacturing ecosystem away from the existing industrial base around Seoul would require significant time and investment.

“Establishing production lines from scratch could take more than five years,” Lee Jong-hwan, a semiconductor engineering professor at Sangmyung University, told AFP.

“The biggest challenge is that most skilled workers and suppliers remain concentrated around the Seoul metropolitan area.”

Concerns were also raised about heavy demand for water. President Lee wrote on X on Saturday that “assessments indicate it is possible to supply one million tons of industrial water per day” in the region.

The announcement comes as South Korea debates how the enormous profits generated by the global AI-driven semiconductor boom should be shared more broadly across society.

Kim Yong-beom, the president’s chief policy secretary, in May suggested using excess AI-related tax revenue to fund startup support for young people, basic income programmes for rural and fishing communities, and assistance for artists.

The boom has also fuelled worker demands over pay packages, with Samsung averting a major strike in May by agreeing a deal on bonuses with its largest union.

Veon, the parent company of Banglalink, has proposed a $1 billion investment initiative in Bangladesh, with an immediate commitment of $250 million, as the global digital operator seeks to expand its presence in the country’s digital economy.

The proposal was discussed during a meeting between Prime Minister Tarique Rahman and Veon Chairman Augie Fabela at the Prime Minister’s Office in Jatiya Sangsad Bhaban yesterday morning.

Called “Invest in Bangladesh NOW!”, the initiative is a joint public-private proposal with the Ministry of Post, Telecommunications and ICT aimed at attracting more foreign direct investment into the country’s digital sector.

According to a public official familiar with the discussions, the initiative will focus on next-generation digital infrastructure, digital services, digital banking, artificial intelligence and mobile financial services.

In general, the goal is to position Bangladesh as a leading destination for global digital investment, according to the official.

In a statement issued in the evening, Banglalink said that, beyond its own investment, Veon plans to use its global network to encourage other international investors to explore opportunities in Bangladesh’s rapidly growing digital economy.

Augie K Fabela II, founder and chairman of the Board of Veon Group, said, “We are a long-term partner in Bangladesh’s journey toward becoming a trillion-dollar economy. Through the ‘Invest in Bangladesh NOW’ initiative, Veon is prepared to serve as the anchor investor in an ambitious programme designed to help attract $1 billion in foreign direct investment.”

“Alongside our own investment, we will actively engage international partners to unlock Bangladesh’s tremendous potential. We are fully aligned with the government’s vision for digital and financial transformation and stand ready to support that vision through long-term investment, innovation, and partnership,” added the Veon board chairman.

During the meeting, Prime Minister Tarique Rahman urged Banglalink to make smartphones more affordable and consider further reducing internet prices so digital services become accessible to people from all walks of life.

According to a media release from the Prime Minister’s Press Wing, the PM stressed the need to expand digital inclusion by ensuring that people from all socioeconomic backgrounds can own smartphones and access affordable internet services.

Post, Telecommunications, Information Technology and Science and Technology Minister Faqir Mahbub Anam, Prime Minister’s Adviser on ICT Rehan Asif Asad, Veon Board Member Michiel Soeting and Banglalink Chief Executive Officer Johan Buse also attended the meeting.

The investment proposal comes as Veon seeks to expand its presence in Bangladesh through strategic partnerships and acquisitions.

In a recent letter to the prime minister, the Dubai-headquartered company expressed interest in a strategic combination with state-owned mobile operator Teletalk as part of its broader expansion plans. It also said it was prepared to significantly increase its investment in Bangladesh and requested discussions on potential collaborations involving strategic public assets.

The proposal also includes a possible acquisition of Nagad from the Bangladesh Post Office.

According to sources, Veon is among several foreign companies that have expressed interest in investing in or acquiring a stake in Nagad.

Veon said it has already applied for a digital bank licence and received a no-objection certificate from the Bangladesh Bank to operate as a payment service provider.

The company said it has invested more than $2.5 billion in Bangladesh over the past two decades through Banglalink and contributed more than $4 billion to the national exchequer during that period.

The government is likely rolling back several budget proposals for FY2026-27, including a package VAT on retail businesses and a mandatory TIN for opening bank accounts, while raising the personal tax-free income limit to Tk4 lakh.

The government may also abandon its plan to introduce a new package-style VAT, known as a "specific VAT," on small retail businesses. The move comes amid concerns over inadequate implementation preparedness and the risk of harassment of small traders at the field level.

The government is also considering raising the tax-free income threshold for individual taxpayers from Tk3,75,000 to Tk4 lakh for the next tax year, with the same threshold likely to remain in place for 2027-28. It may be further increased to Tk4.5 lakh for tax years 28-29 and 29-30, and Tk5 lakh for 30-31.

In addition, the proposed 15% capital gains tax on landowners in land development projects may be reduced to 5%.

TIN for new bank accounts may go

The proposal included in the Finance Bill to make a Taxpayer Identification Number (TIN) mandatory for opening bank accounts is also likely to be withdrawn. Sources involved in the budget process at the National Board of Revenue (NBR) said changes may also be made to the personal income tax slabs.

Low chance of VAT on retail businesses

Speaking to The Business Standard on condition of anonymity, a senior NBR official said, "The likelihood of implementing the proposed specific VAT at the retail level this year is low."

He said the initiative was part of a broader plan to expand the VAT net but acknowledged that the necessary groundwork has not yet been completed.

"The required preparations are still lacking. There are concerns that implementation could create confusion, lead to harassment of businesses and ultimately increase consumer prices. As a result, the proposal may not be implemented for now," he said.

"The government may conduct further studies before moving ahead with the proposal," he added.

Under the plan, businesses with annual sales or turnover below Tk50 lakh would have been required to pay a fixed monthly VAT based on their location. The NBR also planned to simplify VAT registration for such businesses and automatically deduct the tax from their bank accounts. A new regulation was expected to be issued to facilitate the scheme.

The proposed monthly VAT ranged from Tk1,000 to Tk10,000.

During the budget discussion in parliament on 24 June, Finance Minister Amir Khosru Mahmud Chowdhury said the government planned to bring 16 retail and service sectors, including grocery and cosmetics shops, under the specific tax regime in FY2026-27.

The proposed specific tax is essentially a package VAT system that had previously been in place but was later abolished.

Mustafizur Rahman, distinguished fellow at Centre for Policy Dialogue (CPD), welcomed the government's latest plans as positive steps.

"There is a need to expand the VAT base by bringing the retail sector under the VAT net. However, this should be preceded by further study to ensure that implementation does not create unnecessary complications" he told The Business Standard.

Referring to reports that the government may raise the tax-free income threshold, he said, "The proposal is reasonable. We (CPD) had recommended setting the tax-free income threshold in line with inflation."

He added, "The 5% tax on low-income taxpayers should also be retained. Otherwise, the tax burden on middle-class taxpayers will increase."

He also said the proposal to make TIN mandatory for opening bank accounts should be dropped, noting that many people do not have taxable income. "Making TIN compulsory for opening a bank account would create an unnecessary burden on them."

Meanwhile, the Bangladesh Shop Owners Association held a press conference yesterday demanding that the government withdraw the proposal.

Association leaders warned that, if implemented, the measure would expose small and micro businesses to widespread harassment by VAT officials. They also argued that it could create serious disruption in the small and medium-sized enterprise (SME) sector, ultimately undermining the government's public support.

Speaking at the press conference held at the association's office in Moghbazar, association president Md Helal Uddin and other senior leaders urged the government to reverse its decision and abandon the proposed tax regime.

Weak public institutions are holding back Bangladesh’s economic growth and costing the country billions in lost tax revenue, the World Bank said yesterday, urging reforms to tax administration, procurement, auditing and project implementation.

“These are facts, but they are also symptoms of deeper structural issues. At the core of those issues are weak institutions,” said Jean Pesme, World Bank country director for Bangladesh, at the launch of the Strengthening Institutions for Transparency and Accountability (SITA) project in Dhaka.

Citing the WB’s Country-Level Institutional Assessment and Review based on 2023 data, Jean said Bangladesh ranks in the bottom quartile among upper-middle-income countries in eight of 13 institutional clusters. The areas include political institutions, social institutions, integrity, justice, human resource management, public finance, labour and social protection, and service delivery.

The costs are heavy. Jean pointed out that Bangladesh’s tax-to-GDP ratio stood at only 6.9 percent in fiscal year 2024-25, which is less than half of the roughly 15 percent considered necessary to finance the country’s development ambitions.

Around 70 percent of government revenue comes from indirect taxes, reflecting a narrow and inequitable tax base, he added.

According to the WB, public investment projects face average cost overruns of around 30 percent and implementation delays of about three years, while Bangladesh ranks 116th among 137 countries in infrastructure quality.

“Weaknesses in procurement and public investment management undermine infrastructure outcomes and public service delivery,” Jean said.

He described Bangladesh as being at an “inflection point”, with economic growth slowing over the past three years, fiscal pressures mounting, job creation weakening and external shocks exposing long-standing structural vulnerabilities.

Poverty reduction has also slowed, with 8.9 percent of the population projected to live below the $3-a-day poverty line in 2025.

“The next game for Bangladesh will depend less on policies alone and much more on how effectively institutions can implement them and close the execution gap,” he said.

He welcomed the government’s decision to separate tax policymaking from tax administration, calling it an important step toward stronger accountability and taxpayer confidence.

According to the WB official, the FY27 budget’s revenue and service delivery targets were ambitious but contingent on institutional capacity to deliver.

“It’s about outcomes and results,” he said, adding that the government’s emphasis on digitalising tax administration and improving compliance is consistent with the reform agenda supported by the WB.

The SITA project, financed by a $250 million WB credit, will seek to modernise five institutions: the National Board of Revenue (NBR), the Bangladesh Bureau of Statistics (BBS), the Bangladesh Public Procurement Authority (BPPA), the Office of the Comptroller and Auditor General, and the Planning Division.

Successful implementation of the project is expected to result in higher revenue collection, more efficient public spending, greater procurement transparency and stronger public auditing.

The WB urged authorities to accelerate the rollout of digital tax systems at the NBR, improve data accessibility and timeliness at the BBS, strengthen project selection and monitoring in the Planning Division and the IMED, expand the electronic Government Procurement (e-GP) system and fast-track audit reforms.

“The next 18 months are critical. Only early results will ensure credibility, public trust and reform momentum,” Jean said.

State Minister for Planning Jonayed Abdur Rahim Saki, who inaugurated the project, said the government is committed to strengthening public institutions through technology to improve transparency and accountability.

He said digitising core government agencies would improve revenue mobilisation, public financial management, auditing, procurement and development planning while helping curb corruption, misuse of public funds and money laundering.

Industrial production grew by only 2.86 percent in the outgoing fiscal year -- the slowest pace in recent memory. Yet the budget projects that growth will somehow jump to 7 percent next year and continue rising thereafter. Such an acceleration is not impossible, but it demands a transformation far deeper than anything currently underway.

This gap between performance and aspiration raises an uncomfortable question: why do the same constraints -- weak logistics, unreliable energy, low foreign investment, anti-export policy bias, and chronic skill shortages -- persist after decades of being diagnosed and rediagnosed? The answer cannot be ignorance. Policymakers have long understood these problems, and the solutions are hardly mysterious.

The persistence of these constraints points to something more structural. Industrial stagnation cannot be understood solely as the result of technical bottlenecks. It also reflects the institutional incentives that shape industrial policy, competition, and investment decisions. Understanding those incentives requires looking beyond the familiar explanations that dominate policy debates.

THE CONVENTIONAL EXPLANATION

The prevailing explanation traces Bangladesh’s industrial underperformance to weak state capacity, policy inconsistency, and short political time horizons rather than to the incentives shaping policy choices. Bureaucratic fragmentation, cumbersome regulations, inadequate infrastructure, fiscal constraints, and limited administrative capability make it difficult to implement coherent industrial strategies. Governments, whether democratic or authoritarian, also tend to prioritise visible short-term projects over long-term investments in education, energy, logistics, and institutional reform.

These explanations are neither trivial nor incorrect. Weak institutions, limited technical capacity, and political incentives all matter. But they are insufficient to explain why many of the same constraints have persisted for decades despite being widely recognised. Policymakers have long understood the importance of reliable infrastructure, export diversification, better logistics, and a more attractive investment climate. Technical knowledge is readily available, international experience is abundant, and development partners have invested heavily in building administrative capacity.

The more important question, therefore, is not why good policies are difficult to implement, but why the obstacles themselves prove so resilient. That requires looking beyond administrative shortcomings to the incentives embedded in Bangladesh’s political economy. Many of these constraints persist not simply because the state lacks capacity, but because they are embedded in an institutional equilibrium in which economic power, policy influence, and market privileges reinforce one another.

AN ECONOMY ORGANISED AROUND PROTECTED RENTS

One consequence of this institutional equilibrium is an economy increasingly organised around protected rents. Bangladesh’s large business groups played a critical role in the country’s economic transformation, investing when capital was scarce, creating jobs, and helping build a domestic entrepreneurial class. The problem is not the existence of powerful firms. Every successful industrialiser had them -- from South Korea’s chaebol to China’s state-owned and private conglomerates.

The challenge is that Bangladesh has not developed institutions capable of disciplining economic power in the service of industrial transformation.

Over time, much of the formal economy has become organised around protected incumbent firms. Large business groups have expanded across manufacturing, finance, logistics, telecommunications, media, and services, while economic power and policy influence have become increasingly intertwined.

In this environment, protection, subsidised credit, regulatory discretion, and market access can become entitlements rather than instruments for building competitiveness. Firms often face stronger incentives to preserve existing advantages than to pursue innovation, export expansion, or technological upgrading.

Viewed through this lens, many familiar bottlenecks become easier to explain. Regulatory complexity raises barriers to entry. Finance flows toward established relationships rather than productive newcomers. Persistent shortcomings in logistics, trade facilitation, and export competitiveness become easier to tolerate when firms can remain profitable without competing aggressively in global markets. Underlying these patterns is an institutional environment that rewards rents more consistently than productivity.

THE NARRATIVE THAT SUSTAINS THE SYSTEM

Economic structures endure not only because they generate profits for powerful groups. They also endure because they generate ideas that justify them.

In Bangladesh, industrial policy has long been shaped by a powerful narrative: Bangladesh is different. It must follow its own development path by nurturing domestic entrepreneurial capabilities and guiding industrial transformation through active state intervention. Over time, however, this developmental narrative has increasingly come to justify preserving established firms and exercising administrative discretion over market competition.

These arguments resonate because they contain important truths. No country has industrialised without building domestic entrepreneurial capabilities, and national development cannot be outsourced to foreign investors. The problem begins when nurturing domestic capability becomes synonymous with shielding incumbent firms from competition.

The result is that industrial policy becomes more concerned with preserving existing capabilities than creating new ones. The relevant question is no longer what firms contribute to structural transformation, but whether they reinforce that order.

The problem deepens when the success of incumbent firms becomes equated with the success of the economy itself. Industrial transformation is a process of continuous renewal in which firms enter, compete, grow, and, when they cease to be productive, exit. Yet policy increasingly focuses on preserving established firms rather than renewing the industrial ecosystem.

This bias is reflected in how policy responds to success and failure. Large firms in financial distress are treated as systemic concerns because of their size and employment, while the financing, market access, and technological constraints facing thousands of small and medium enterprises receive far less attention, even though their collective contribution is indispensable to employment, innovation, and industrial diversification.

WHAT EAST ASIA ACTUALLY DID DIFFERENTLY

The weakness of Bangladesh’s approach becomes clearer when contrasted with the East Asian experience.

East Asian success was not built on free markets alone. Nor was it built on suppressing large firms or rejecting foreign capital. Its defining feature was not simply disciplined rents but continuous industrial renewal. Governments used policy support not to preserve existing firms but to create conditions in which new firms could emerge, successful firms could grow, and resources could gradually shift away from less productive activities.

Governments provided protection, subsidised credit, tax incentives, and other forms of policy support. But these privileges were conditional rather than permanent. They were tied to export success, technological upgrading, productivity growth, and integration into global markets. Firms that failed to deliver lost state support.

This took different institutional forms across countries. South Korea disciplined the chaebol through export targets and directed credit while allowing weaker firms to exit. Taiwan fostered dense networks of small and medium enterprises that continuously generated new suppliers and exporters. China combined foreign investment, local experimentation, and competition among firms and regions to accelerate technological learning and industrial upgrading.

The common thread was not a particular industrial policy but a particular relationship between the state and business. Governments remained closely connected to firms while retaining sufficient autonomy to discipline them when national development objectives required it. This has been described as “embedded autonomy” -- a state embedded in business networks yet sufficiently autonomous to discipline them.

Bangladesh has achieved embeddedness. What it has struggled to develop is autonomy. Without that autonomy, support becomes difficult to withdraw, even when performance falls short.

That is the critical distinction. The issue is not whether governments create rents—every successful industrial policy does. The issue is whether those rents are conditional on performance or become permanent privileges. East Asia used state support not only to build globally competitive firms but also to continually renew its industrial base. Bangladesh has too often used it to preserve existing market positions.

GROWTH REQUIRES DISCIPLINE

If Bangladesh genuinely wants industrial growth to accelerate, it needs more than another package of incentives. Industrial policy must shift from discretionary privileges to transparent, performance-based support that rewards firms for exporting, innovating, upgrading technology, and raising productivity. That requires predictable rules, open competition, and a state capable of disciplining powerful economic actors in pursuit of broader developmental goals.

The government’s industrial growth projections implicitly assume that the existing system will generate East Asian-style dynamism. Yet East Asia’s success rested on institutions that linked privilege to performance, competition, and continuous industrial renewal. Bangladesh’s challenge is to build institutions that do the same. Without that discipline, industrial policy will remain focused on preserving today’s capabilities rather than creating tomorrow’s. Only then can the country build globally competitive industries.

The writer is the former lead economist of the World Bank’s Dhaka office.

The Dhaka Stock Exchange (DSE) has found the factory of Active Fine Chemicals closed during an inspection, raising the number of non-operational listed manufacturing companies to 33.Geographic Reference

The inspection, conducted on Thursday, is part of the bourse's ongoing drive to verify the operational status of listed companies and provide investors with a clearer picture of their actual business status.

According to DSE data, 32 listed manufacturing companies went out of operation between 2016 and Sunday, while another company has remained shut since 2002.

The list of non-functional companies becomes even longer when troubled financial institutions are taken into account. Five Islamic banks are currently undergoing merger, while five non-bank financial institutions (NBFIs) have been selected for liquidation.

Market analysts say the growing number of inactive listed companies exposes deep-rooted structural weaknesses in the country's capital market and highlights long-standing failures in regulatory oversight.

Many of these companies raised funds from the public through the stock market years ago but later became victims of sponsor disputes, financial irregularities, loan defaults, prolonged financial distress, or legal battles. Some failed to modernise operations or lost competitiveness amid changing market conditions.

Several manufacturing companies struggled with rising energy costs and persistent shortages of gas, making operations financially unviable.

Hamid Fabrics, for example, suspended factory operations in June last year, citing inadequate gas pressure. The company informed investors that production had already been disrupted for nearly two years before the worsening gas crisis forced a complete shutdown.

Appollo Ispat Complex has remained closed since October 2020. The manufacturer of Rani Marka Dheutin, which went public despite strong objections from the then finance minister AMA Muhith, fell into trouble within three years of listing after allegations of embezzlement involving its former directors.

Meghna Pet Industries has remained non-operational since 2002, making it the longest-closed company among listed firms. Company officials could not be reached for comment, as its page on the DSE website provides neither a contact number nor the name of the company secretary.

Market participants say the absence of timely regulatory intervention has allowed many troubled companies to remain listed years after production ceased.

The physical inspection is part of the exchange's broader initiative to verify the operational status of listed companies, said Md Sajedul Islam, shareholder director of the DSE.

In recent months, the exchange has intensified inspections as companies have not disclosed their operational status to investors.

Stock prices surged while factories remained shut

With factories remaining shut, machinery lying idle, and workers gone for long, several non-operational companies have posted sharp price increases on the bourses. Analysts suspect speculative trading and price manipulation behind the rallies.

Shyampur Sugar Mills, which has remained closed since December 2020, saw its share price jump about 42 per cent over the past month. The stock gained another 8.73 per cent on Sunday to close at Tk 225.50.

Khulna Printing & Packaging, whose factory has not been producing anything for more than two years, rose 8.61 per cent on Sunday to Tk 16.40, its highest level in a month.

In some cases, companies appear to exist only on paper. Familytex (BD), for instance, no longer has any physical manufacturing assets. A recent investigation by a special team from the Chittagong Stock Exchange (CSE) found that the company's factory and other assets had already been sold to a private entity.Geographic Reference

There are always some investors who are attracted to highly speculative stocks, said Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA). A segment of traders deliberately takes high risks, betting on sharp price swings rather than company fundamentals.

"They believe that once a stock starts rising, the relatively low free float of these companies makes it easier to drive prices further in their favour," Mr Islam added.

Analysts warn that continued trading of stocks of non-operational companies erodes investor confidence and damages the credibility of the capital market. They urge the regulator to take prompt action against the firms, saying cleaning up the trading board is essential to protect investors and foster the long-term development of the equity market.

Responding to concerns over the growing number of non-operational firms, Md Abul Kalam, executive director and spokesperson of the Bangladesh Securities and Exchange Commission (BSEC), said the stock exchanges are the frontline regulators and have the authority to take action against such companies.

"The stock exchanges can suspend trading or delist companies in accordance with the listing regulations," he added.

One of Bangladesh's leading industrial conglomerates, DBL Group, is preparing to list two of its sister concerns on the country's capital market as part of a broader strategy to strengthen corporate governance and gradually bring more of its businesses under public ownership.

The two companies are Parkway Packaging and Printing Limited and Thanbee Print World Limited. Both have already signed agreements with a local merchant bank to manage their Initial Public Offering (IPO) process.

According to the group's roadmap, if the IPOs of these two companies are completed successfully, another four to five companies will be listed on the stock exchange over the next four years.

Speaking to The Business Standard, DBL Group Vice Chairman M A Rahim said the group is currently preparing to bring both companies to the capital market. He noted that a similar attempt was made around one and a half years ago during the tenure of the interim government, but the process stalled after the regulator raised several queries.

"We responded to all of them. However, as the process became prolonged, we realised it was unlikely to move forward at that time. So, we decided to put the initiative on hold," he said.

He said the group revived the IPO plan after the new government assumed office, encouraged by its positive stance on the capital market and the economy, as well as its call for large, well-managed companies to join the stock market.

"We expect to complete the necessary documentation by November. Our target is to complete the IPO of at least one company by December, while the other is expected to come to the market in February or March 2027," Rahim said.

More companies to follow

Rahim said the successful listing of the two companies would pave the way for a series of future IPOs from the group.

"The pharmaceutical company will not be brought to the market now because it is still a relatively new business and needs a few more years to strengthen its financial base. We also want to wait a little longer before listing our ceramics business. Before those, we plan to bring some of our textile companies to the market. We aim to list one textile company by the end of 2027, followed by others in phases. Over the next four years, we hope to list at least four to five companies," he said.

'Our primary goal is not fundraising'

Rahim said raising capital is not the principal objective behind the IPOs. Instead, the group is focusing on building a stronger corporate governance framework for the future.

"At present, our four brothers jointly manage the business. As the family grows, not everyone will necessarily be involved in management. We want these companies to be run by professional management. Family members who wish to participate in the business can do so, while those who do not can remain shareholders and benefit from the companies' growth and dividend income," he said.

He added that the group wants to establish a sustainable corporate structure that will ensure good governance over the long term.

"Once listed, the companies will have independent directors, regular regulatory oversight, annual financial reviews and a much stronger corporate governance framework," Rahim said.

He also confirmed that both companies will seek listing on the main board, not the SME platform.

Planned use of IPO proceeds

According to Rahim, Parkway Packaging and Printing plans to raise around Tk70 crore through its IPO. The proceeds will be invested in expanding its carton manufacturing facility.

For Thanbee Print World, however, the fundraising amount has not yet been finalised.

"A decision will be made next week. Instead of raising a large amount, we are also considering listing the company by offering only 5% to 10% of its shares to the public because our primary objective is to strengthen corporate governance," he said.

Two companies at a glance

Parkway Packaging and Printing Limited began commercial operations in 2008. The company has a paid-up capital of Tk45 crore and an annual turnover of around Tk140 crore. It manufactures cartons and packaging products primarily for Bangladesh's readymade garment industry and has a production capacity of approximately 35,000 cartons per day.

Thanbee Print World Limited, also established in 2008, has a paid-up capital of Tk45 crore and an annual turnover of around Tk200 crore. The company provides garment printing services with a daily printing capacity of approximately 250,000 pieces.

About DBL Group

Founded in 1991, DBL Group has grown into one of Bangladesh's largest diversified conglomerates. Its businesses span apparel, textiles, textile printing, washing, garment accessories, packaging, ceramic tiles, pharmaceuticals, dredging, retail and digital transformation services.

The group already has one listed company, Matin Spinning Mills PLC, on the Dhaka Stock Exchange.

If implemented as planned, DBL Group's listing strategy is expected to increase the presence of large industrial groups in Bangladesh's capital market, expand the pool of quality listed companies and promote stronger corporate governance and transparency, while creating new investment opportunities for investors.

Food vendors across Asia who rely on plastics for everything from bags to cups and containers are grappling with their rising costs, the result of the energy crisis sparked by the Middle East war.

While the United States and Iran have reached a deal to halt the conflict, it will take time for markets to recover and supply flows to return to normal, with persistent concerns over traffic through the economically vital Strait of Hormuz.
At Taipei’s Songjiang market, chicken vendor Li Yu-ping, 52, said in early June that the price of plastic bags had jumped nearly 60 percent, while the cost of plastic trays had risen by a third.“We use them everywhere,” she said of the bags. “Our food containers are also plastic, all disposable.”

Wary of hiking prices, “all of this has become a cost for the vendors”, she said.A key raw material for many of these plastic goods is ethylene, which is derived from naphtha, an oil by-product. Around 60 percent of the naphtha imported to Asia comes from the Gulf.

Faced with tight supply and soaring prices due to the monthslong closure of the Strait of Hormuz, petrochemical companies mainly in South Korea and Japan have scaled back production capacity, sending the cost of basic goods such as plastic bags surging.In Bangkok, Nikorn Sai-inthara, a 60-year-old selling vegetables from a street cart, estimated his operating costs had risen by 30 percent.“I rely on plastic bags for my work because I sell vegetables on the go to busy people and office workers,” said Nikorn, who wraps individual portions in plastic and secures them with a rubber band.“Ever since the fighting started in the Middle East, my profits have fallen, but I don’t dare raise prices for my customers,” he told AFP. Several vendors across the region told AFP they do not have a practical alternative to the plastic products they use on a daily basis.“We have no choice. If you don’t give customers plastic bags, they complain,” said Chang Chiu-hsiang, a 78-year-old grocer in Taipei.

“I think you can’t really avoid using them,” added Li, the chicken vendor, noting however that some customers have started to use reusable bags.

Somsak Jaidee, 62, who sells rice porridge in bags secured with rubber bands at a Bangkok market, said that while “everything is more expensive... I have to endure it.”

“I can’t think of anything else that offers the same convenience for my customers as plastic bags.”

A cautious reopening of the Strait of Hormuz since the US-Iran deal was signed last week has yet to fully impact naphtha prices, which have dipped only slightly.

And manufacturers continue to process naphtha purchased when prices were higher.

In early June, Taiwanese manufacturer Formosa Petrochemical reported cutting the utilisation rate of its ethylene steam cracker to 35 percent, down from 53 percent in March at the very start of the war.

“At this point, the situation is not entirely due to lack of feedstock. The bigger issue now is that the feedstock has become extremely expensive, and some of our customers simply can’t bear the higher prices,” Formosa’s president, Lin Keh-yen, told AFP.

In South Korea, supply tensions remained acute in early June.

“Normally, if we order 10,000 plastic bags, they arrive within about a week. Now suppliers are telling us that we may have to wait more than a month” with prices 30-percent higher, said a shop employee in Seoul.

A nearby dry cleaner said the price of plastic garment covers had more than doubled, while a cafe owner noted a 50-percent increase in the cost of plastic cups.

South Korea’s plastics industry association said the Middle East war had forced manufacturers to hike prices, although “alternative” supply routes have helped stabilise the situation.

Fajar Budiyono, secretary-general of the Association of Olefin, Aromatic, Plastic and Chemical Industries in Indonesia, said a shift to suppliers in places like China and Africa has helped keep prices at bay.

In the Philippines, meanwhile, manufacturers said they had absorbed some of the additional costs.

“Our profits got squeezed. We could not simply raise prices as we would be swamped by imports,” said Steve Tavera, a member of the Philippine Plastics Industry Association.

As a result, price hikes have so far been “conservative”, he said.

Bangladesh is pursuing a dual-track strategy to retain duty-free access to the European Union after graduating from the least developed country (LDC) category, negotiating a free trade agreement (FTA) with the bloc while also seeking to qualify for its GSP Plus trade preference scheme.

With the clock ticking towards the end of its LDC trade privileges, businesses say that failing to secure an alternative arrangement could dent the country’s export competitiveness in its largest overseas market and hurt the overall economy.

The stakes are high as nearly half of Bangladesh’s merchandise exports are shipped to the EU. To the European market, they currently enjoy duty-free and quota-free access under the Everything But Arms (EBA) scheme for least developed countries.

The pressure is greater because the two biggest competitors of Bangladesh in the apparel market, India and Vietnam, already have trade agreements with the EU. Once Bangladesh loses its LDC preferences, exporters fear the market peers will gain a further competitive edge.

Bangladesh is scheduled to graduate from LDC status in November this year. The government has, however, sought a three-year postponement, and officials say the response from the relevant UN body has so far been positive.

Even if the graduation goes ahead as scheduled, the EU has agreed to continue its trade preferences for Bangladesh for another three years. That means regular tariffs will come into effect from 2029 under the current timeline.

Studies have estimated that Bangladesh could lose exports worth as much as $17.5 billion a year after graduation, as around 73 percent of the country’s exports currently benefit from LDC-related preferences.

“Eventually, we are heading towards signing an FTA with the EU, but it may take a long time because of the negotiations by both parties,” Commerce Minister Khandakar Abdul Muktadir told The Daily Star over the phone.

Negotiating an FTA, however, is rarely a quick process. India, for example, took around two decades to conclude its trade agreement with the EU.
Referring to the lengthy process, the commerce minister said, “But at the same time, we should not keep the EU market as a vacuum as it is the largest export destination for Bangladesh.”

That is why Bangladesh is pursuing both options at the same time, while giving priority to concluding an FTA as early as possible, Muktadir said.

FTA or GSP Plus?

Bangladesh has been negotiating with major trading partners to secure duty-free market access after LDC graduation, either through free trade agreements or preferential trading arrangements such as GSP Plus.

With the EU, discussions are at an early stage. Both sides have been exchanging letters to prepare the ground for formal negotiations, whether for an Economic Partnership Agreement (EPA), a conventional FTA or a Comprehensive Economic Partnership Agreement (CEPA).

Recently, the European Commission replied to a commerce ministry letter sent last October, saying it was carrying out an internal assessment before deciding whether to launch formal negotiations with Bangladesh.

At the same time, Dhaka is continuing its efforts to qualify for GSP Plus, which offers tariff preferences to developing countries that meet a series of international standards on labour rights, human rights, environmental protection and good governance.

Speaking on condition of anonymity, a senior commerce ministry official said Bangladesh has already fulfilled most of the requirements under the 32 international conventions linked to GSP Plus eligibility.

The official said recent labour reforms have strengthened Bangladesh’s position.

Parliament amended the labour law last year in line with recommendations from the International Labour Organisation (ILO). Bangladesh has also ratified three ILO conventions covering occupational safety, workplace health and protection from violence and harassment.

“We are continuing negotiations with the EU for both GSP Plus status and FTA signing as we know the importance of the EU markets,” the official said.

The ministry is also closely watching the outcome of Bangladesh’s request to defer its LDC graduation. The proposal is expected to go before the UN General Assembly in September after a recommendation from the UN Economic and Social Council (UN ECOSOC).

Officials believe that if Bangladesh’s graduation is postponed, the EU grace period could also be extended.

‘FTA OFFERS MORE DURABLE SOLUTION’

Mohammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID), said Bangladesh’s progress on labour reforms would support both GSP Plus and FTA negotiations.

However, he said the government should focus more on securing an FTA because it offers a more durable solution for retaining preferential access to the European market.

Razzaque also questioned how much Bangladesh would ultimately gain from GSP Plus.

Under the EU GSP rules for 2024-34, clothing exports from a GSP Plus beneficiary country would lose preferential treatment if they exceed 6 percent import thresholds.

Bangladesh already accounts for nearly 20 percent of the relevant clothing imports into the EU, well above the threshold.

The EU GSP rules also mention that clothing imports from a GSP Plus beneficiary should not account for more than 37 percent of all GSP-covered clothing imports into the EU. Bangladesh’s current share is close to 50 percent, raising questions over how much of its apparel exports would actually qualify for zero-duty treatment even if it secures GSP Plus.

Bangladesh has been a member of the World Trade Organization (WTO) since 1995 and currently enjoys duty-free, quota-free access to the EU market under the Everything But Arms (EBA) arrangement, which covers all products except arms and ammunition.

THE TRADE PICTURE

The EU began enhanced engagement with Bangladesh under the EBA arrangement in 2017 to monitor compliance with international conventions on labour rights and human rights.

In 2025, Bangladesh was the EU’s 35th largest trading partner, accounting for 0.5 percent of the bloc’s total goods trade. For Bangladesh, however, the EU was its largest trading partner, representing 21.5 percent of the country’s total export.

Trade in goods between Bangladesh and the EU reached €23.3 billion in 2025, with the EU running a trade deficit of €19.1 billion.

Textiles dominated Bangladesh’s exports, accounting for almost 94 percent of EU imports from the country. EU exports to Bangladesh were led by machinery and appliances, which made up 36 percent of shipments, followed by chemical products at 24 percent.

Trade in services stood at €1.5 billion in 2024, while total trade in goods and services reached €23.8 billion.

Bangladesh is the largest beneficiary of the EU Everything But Arms scheme. In 2024, exports worth €19 billion entered the bloc under the arrangement, with a utilisation rate of 96 percent.

EU’s foreign direct investment stock in Bangladesh stood at €2.5 billion in 2024, while Bangladesh’s investment stock in the EU totalled €86 million, according to the European Commission.

Faisal Samad, a director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said exporters are concerned about retaining duty-free access to their largest market after LDC graduation.

“We are also working with the government by giving recommendations for retaining the zero-duty market access to the EU in the post-LDC period,” Faisal Samad told The Daily Star over the phone.

“But at the same time, we should keep open all of the avenues of negotiation with the EU so that we do not miss any opportunities,” he said.

The European Union (EU) is moving ahead with plans to roll out its Global Green Bond Initiative (GGBI) in Bangladesh, a move expected to mobilise up to 20 billion euro in private capital and significantly strengthen the country's access to sustainable development finance, officials said.

In a recent letter addressed to Nazma Mobarek, secretary of the Financial Institutions Division (FID) under the Ministry of Finance, the EU proposed a strategic partnership with the Bangladesh government to implement the initiative and initiate discussions on deploying the large-scale public-private investment mechanism.Finance

Launched in April 2026 by the EU and a consortium of development finance institutions, the GGBI is designed to channel up to 20 billion euro in private investment into sustainable infrastructure projects in low- and middle-income countries, including Bangladesh.

The initiative comes at a critical time as Bangladesh approaches graduation from the Least Developed Country (LDC) category, a transition that is expected to reduce access to concessional financing and increase the need to attract private investment for climate resilience and infrastructure development.

Officials and experts say Bangladesh will require billions of dollars annually to implement its climate adaptation agenda, including the Climate Prosperity Plan and renewable energy transition targets.

Against this backdrop, the EU-backed initiative is expected to create significant financing opportunities across several strategic sectors.

Under the proposal, the GGBI will provide technical and regulatory assistance to the Bangladesh Securities and Exchange Commission (BSEC), Bangladesh Bank (BB) and the Dhaka Stock Exchange (DSE) to strengthen the country's green bond framework and broader sustainable finance ecosystem.

The initiative may also offer transaction and issuer support to banks, corporates, state-owned enterprises and, potentially, sovereign green bond issuances, enabling local institutions to tap international climate finance and green capital markets.

In addition, it plans to deploy blended finance instruments to reduce borrowing costs, extend financing tenures and attract a wider pool of foreign investors to Bangladesh's green finance sector.Economics

Sector-specific support is expected for areas facing substantial financing gaps, including renewable energy, climate-resilient infrastructure, water and waste management, and sustainable transport.

When contacted, a senior FID official said, "The EU Delegation has expressed interest in holding discussions with the government between June 27 and July 2, 2026, to explore possible pathways for implementing the initiative in Bangladesh and identify areas for continued cooperation."

According to the official, the proposed meetings will focus on identifying priority sectors and mechanisms for long-term collaboration. However, securing a substantial share of the potential 20-billion-euro investment will depend largely on Bangladesh's ability to develop a robust pipeline of bankable green projects and align its regulatory framework with internationally recognised green bond standards.

According to the European Union's Global Gateway programme, the GGBI Fund is one of the three pillars of the EU's Global Green Bond Initiative.

It invests primarily in primary-market green bonds, with priority given to first-time issuers, including governments, local authorities and businesses. At least 20 per cent of the fund's investments will be allocated to least developed countries, supporting both local currency and euro-denominated bonds.

The initiative also seeks to deepen local capital markets, promote the international use of the euro and encourage the adoption of high environmental standards through EU best practices.

The World Bank has approved a $250 million project to help Bangladesh strengthen key public institutions through digital transformation, improved governance and greater transparency.

Approved on 12 June 2025, the Strengthening Institutions for Transparency and Accountability (SITA) project will support reforms in five major government institutions to improve public financial management, domestic revenue mobilisation, procurement, data systems and auditing, according to a World Bank factsheet.

The project aims to modernise the Bangladesh Bureau of Statistics (BBS), the National Board of Revenue (NBR), the Planning Division, the Bangladesh Public Procurement Authority (BPPA) and the Office of the Comptroller and Auditor General (OCAG).

According to the World Bank, stronger public institutions are essential for sustaining Bangladesh's economic growth, creating jobs and achieving long-term development goals.

The project will support the BBS in developing an integrated national data ecosystem to improve the production and use of high-quality data for evidence-based policymaking.

For the NBR, the initiative will focus on modernising tax administration through automation, e-invoicing and integrated digital systems to improve tax compliance and boost domestic revenue collection.

The Planning Division will receive support to strengthen public investment management through digital platforms, artificial intelligence-enabled analytics and real-time monitoring tools.

Meanwhile, the BPPA will enhance its electronic government procurement system with advanced digital features to improve efficiency, transparency and value for money.

The project will also help digitise audit processes at the Office of the Comptroller and Auditor General, with the goal of reducing audit reporting time from 72 months to nine months.

State Minister for Finance and Planning Zonayed Saki said the government remains committed to strengthening public institutions and improving governance to better serve citizens.

"By modernising systems and enhancing transparency in procurement, data quality, domestic resource mobilisation, public financial management and project implementation, the project is expected to build a stronger foundation for effective service delivery," he said.

He added that the initiative would also help increase public trust in government institutions and improve accountability.

Jean Pesme, the World Bank's Divisional Director for Bangladesh and Bhutan, said Bangladesh's next phase of economic growth would depend on strong and transparent institutions.

"The SITA project will help modernise core government systems while strengthening data quality, so decisions are better informed, results are tracked more effectively and accountability is reinforced," he said.

Consumers will have to pay more for officially imported smartphones from 1 July, as a temporary import duty concession has not been extended in the proposed FY27 budget.

The government cut customs duty on imported mobile phones and equipment from 25% to 10% in January to narrow the price gap between officially imported and grey-market devices. The concession, valid until 30 June, reduced the effective tax burden on imported handsets to about 43.43% from over 64%.

As the National Board of Revenue (NBR) has not extended the measure, the effective tax burden will return to 64.25% from 1 July. Industry leaders estimate official smartphone prices could rise by 20-25%.

The Mobile Phone Industry Owners Association of Bangladesh (MIOB) warned the move would raise retail prices. "Our production costs are already rising as prices of memory chips, processors, motherboards and batteries continue to increase globally," said MIOB President Zakaria Shahid.
Infograph: TBS
Infograph: TBS

"If duties return to previous levels, smartphone prices will inevitably rise further, and many consumers may return to the grey market," he added.

An NBR customs official, requesting anonymity, said the concession was withdrawn because it failed to achieve its objectives. "The incentive was introduced to encourage legal imports and local manufacturing. But neither official imports nor domestic production increased as expected," the official said.

Bangladesh has developed a sizeable phone assembly industry producing mainly entry-level and mid-range devices. However, premium smartphones from brands such as Apple, Google, Huawei, Motorola, Samsung and Xiaomi remain commercially unviable to assemble locally, leaving Bangladesh dependent on imports for flagship models.

Higher taxes may strengthen grey market

Bangladesh's smartphone market remains split between official and grey-market imports. The wide price gap has made unofficial devices attractive despite their lack of an official warranty and after-sales support.

Although the Bangladesh Telecommunication Regulatory Commission launched the National Equipment Identity Register (NEIR) earlier this year to identify and eventually block unregistered devices, grey-market phones remain widely available.

Technology entrepreneur Fahim Mashroor said higher smartphone prices would hurt consumers at a time when smartphones have become essential for education, employment, digital financial services and e-commerce.

"A smartphone is no longer a luxury. It is part of the country's digital infrastructure, and the tax burden should be reduced," he said.

Industry sources said several brands had already increased handset prices by Tk500-Tk5,000 before the January duty cut took effect, citing higher global component costs, while unofficial imports continued unabated.

With the effective tax burden returning to more than 64%, industry players fear the price gap between official and grey-market devices will widen further, discouraging legal imports and potentially reducing long-term government revenue.

The broad index of the Dhaka Stock Exchange (DSE) crossed the 5,700-point mark on Sunday for the first time in nearly 22 months, as investors poured in fresh capital ahead of the fiscal year-end to take advantage of tax benefits.

The market opened the day's session on a positive note and the DSE broad index DSEX continued its upward trend till closure as investors remained buoyant. At the end of the session, the DSEX closed at 5,719 points, 1.18 per cent or 66.94 points up from the previous session. The DSE rose for four consecutive sessions, adding 165 points to the broad index.

S M Galibur Rahman, head of research and strategic planning at Shanta Securities, said the number of sellers declined significantly as the majority of investors were taking fresh positions. Many of them wanted to avail themselves of tax rebates by investing in listed securities. As investments must be made by June 30 for tax rebates, the market has persistently witnessed high turnover - above Tk 10 billion in recent sessions.

"Investors' intention to get a tax waiver was the main driver of the recent market rally," said Mr Rahman.

The companies that played a significant role in pulling the broad index include BRAC Bank, Pubali Bank, Square Pharmaceuticals, Beximco Pharmaceuticals, and Grameenphone.

Of them, BRAC Bank alone added 6.8 points to the broad index.

Meanwhile, BEXIMCO on Sunday emerged as the top gainer while also topping the chart of turnover leaders.

The company posted a turnover of Tk 1.05 billion while its stock price advanced 9.86 per cent to close at Tk 31.20 per share.

Insiders said the resumption of trading of Beximco Pharmaceuticals shares on the London Stock Exchange played a supportive role in the robust performance of BEXIMCO on the trading floor of the DSE.

Of the 394 issues traded, 213 advanced, 133 declined and 48 were unchanged, and the DSE posted a turnover of Tk 13.71 billion, 23.43 per cent up from the previous session.

All of the blue-chip stocks included in the DS30 index closed in the green and the index advanced 1.47 per cent or 31.41 points to 2,162.56 points. Market operators said a positive macroeconomic outlook helped restore investor confidence, which was reflected in the vibrant equity market.

Mr Rahman said fuel prices had almost returned to the pre-Iran war level, which would benefit the economy. Treasury rates also declined gradually. Subsequently, interest rates would fall, allowing breathing space for consumers.

"These factors jointly supported the equity market."

Investor participation concentrated mainly on the banking sector, which witnessed transactions of shares worth Tk 2.23 billion, constituting 16.3 per cent of the market turnover.

Daffodil Computers was the worst loser on Sunday after declining 4.25 per cent to close at Tk 146.40 per share on the DSE.

Popular Life Insurance, a listed insurer, has recommended a 20% cash dividend for its shareholders for 2025.

Despite a 42% decline in its earnings per share (EPS) compared to the previous year, the company recommended the same dividend it had paid earlier, according to data published today (28 June) on the stock exchange's website.

Following the dividend declaration, its shares price declined by 1.12% to close at Tk61.60 each at the Dhaka Stock Exchange (DSE).

Calculating its outstanding shares with the EPS, Popular Life Insurance profit stood at Tk8.88 crore, a significantly down from Tk15.32 crore in 2024.

According to disclosure, the net asset value per share of Popular Life Insurance stood at Tk78.10 at the end of 2025, and its net operating cash flow per share stood at negative at Tk18.86.

In 2025, its net asset value declined while its net cash negative widened significantly, the disclosure showed.

At the end of 2024, its net asset value was Tk89.01, and cash flow was negative at Tk3.45.

To secure the shareholders nod on the recommended dividend, the insurer scheduled an annual general meeting on 22 September through the virtually digital platform.

To identify its shareholders, the record date has been fixed on 20 August.

On 21 May, the insurer informed its board that it had decided to construct a joint venture multi-storied building on the company's own land located in the capital's Badda area on 115.56 decimal land. Popular Life Insurance got listed on the bourse in 2005.

As of May, out of its total shares, sponsor-directors held 23.70% stake, while institutional investors 24.57% and general public held 51.73% stake.

Bangladesh Bank (BB) has formally launched a Tk 100 billion special refinancing scheme to boost agricultural production and ensure food security, while revising key provisions from its initial proposal.

The new directive replaces the plan to use foreign currency reserves with domestic bank surplus liquidity and reduces the scheme’s duration from five years to three.

Through an Agriculture Credit Department (ACD) circular, issued today (Sunday) and sent to the Managing Directors/Chief Executives Officers of all banks, the central bank provided a comprehensive set of revised operating guidelines for the scheme. This follow-up circular replaces critical parameters previously outlined in the June 8, 2026.

A fundamental shift in policy has occurred regarding the source of funding. According to today’s circular, the Tk 100 billion scheme is no longer dependent on using foreign currency reserves. Instead, it will be constituted from the surplus liquidity of scheduled banks operating under the management of Bangladesh Bank. This change ensures the program operates strictly with domestic funds, preserving external reserves.

The duration of the scheme has also been adjusted. The central bank specified that the new refinancing tenor is now fixed at three (3) years from the date of the new circular issuance, down from the original five-year proposal.

All other instructions and provisions of the June 8, 2026, circular that were not specifically amended remain unchanged. Bangladesh Bank stated that these new guidelines are effective immediately.

This revised approach by the central bank appears intended to streamline the refinancing process by leveraging domestic banking liquidity while supporting the crucial agriculture sector—responsible for rural employment and national food security—in a sustainable and less reserve-dependent manner.

The government, for the first time in Bangladesh, has announced tax rates for five years to provide businesses with greater policy certainty and help create jobs, said Rashed Al Mahmud Titumir, the prime minister’s adviser on planning and economic affairs.

Businesses need stable tax policies to plan investments, and the announcement of tax rates for five years in advance will be instrumental in this regard, he said yesterday.

Speaking at a discussion titled “Youth in National Budget 2026-27: Education, Employment and Entrepreneurship” at Dhaka University, he said the budget seeks to build a state centred on public welfare and democracy.

To help reduce borrowing costs and encourage entrepreneurship, the government is working to lower lending rates, Titumir said.

“We are ensuring liquidity at a 3 percent rate so that entrepreneurs can get loans at interest rates of 5 to 7 percent,” he said.

“Our manifesto clearly states that socioeconomic development and sustainable state capability must be achieved,” he said.

The PM’s adviser said the government has given priority to energy, education, health and social protection in the budget for the next fiscal year.

The government has set a target of generating 20 percent of the country’s energy from renewable sources and plans to establish emergency energy reserves, he said.

Titumir said the government aims to increase public investment in education.

He said hospitals established during the tenures of former president Ziaur Rahman and former prime minister Khaleda Zia would be expanded to 101 beds.

Kidney dialysis centres and coronary care units will also be established in every district.

On social protection, he said the government was replacing what he described as a politically biased welfare system with a “lifecycle-based” approach to support citizens at different stages of life, including children, older people, widows and people with disabilities.

At the event, DU Treasurer Prof M Jahangir Alam criticised the budgetary allocation for university research.

He said the University Grants Commission has taken full control of research funding, leaving Dhaka University with no independent research allocation.

“With a 2 percent allocation, can one become a research university?” he said, questioning how the government’s vision of building an innovation-driven economy could be achieved without allowing the country’s leading university to manage its own research funds.

Crude prices fell by more than 3 percent on Friday, on course for steep weekly losses, as oil tankers kept exiting the Strait of Hormuz, easing supply concerns the day after a cargo vessel was hit near Oman.

Brent crude futures settled at $71.99 a barrel, down $3.27, or 4.34 percent. US West Texas Intermediate finished at $69.23 a barrel, down $2.69 or 3.74 percent.

Since the market closed last Thursday, the Brent benchmark fell 10.86 percent, while WTI fell 9.62 percent for the week. The market closed for a public holiday last Friday.

“There is a growing sense that oil is going to keep moving through the Strait of Hormuz,” said Phil Flynn, senior analyst with Price Futures Group. Prior to the agreement on 60-day ceasefire, markets worried supplies would fall short of demand, but those fears seem to be passing.

“The predominant view, it appears, remains one of imminent oversupply,” said PVM analyst Tamas Varga. “We’re going to get a flood of oil,” Flynn said. “I think we’re going to see a huge flood of products.”

Oil giant Saudi Aramco resumed oil loading on Friday at its Ras Tanura terminal in the Gulf after a nearly four-month halt, shipping data from LSEG showed.

Two very large crude carriers (VLCCs), which can load cargoes of 2 million barrels, took on crude at the terminal while another waited nearby, the data showed.

“There is a general selloff as the market reacts to the increased flows exiting the Strait of Hormuz and China not yet picking up crude demand,” said June Goh, senior oil market analyst at Sparta Commodities.

UNKNOWN PROJECTILE HITS VESSEL

On Thursday, both benchmark contracts jumped more than 2% after a cargo vessel was hit by an unknown projectile near Oman, prompting the U.N.’s shipping agency to suspend its voluntary evacuation scheme. Two US officials told Reuters that Iran fired on the cargo ship as it attempted to pass through the strait.

Iranian authorities said the security of vessels passing outside designated Hormuz routes is not guaranteed. On Friday, Iran reasserted its right to control shipping through the Strait of Hormuz and warned Gulf states against siding with the US.

Data on Thursday showed that crude shipments through the strait rose this week to their highest since the US-Israeli conflict with Iran began at the end of February. Despite the ceasefire deal that reopened the waterway, overall traffic is far below the pre-war daily average.

Meanwhile, Russian authorities are considering a diesel export ban for several months, state news agency TASS said on Friday. Russia, a major diesel exporter, faces fuel supply issues after Ukrainian drone attacks extensively damaged its oil refineries and other energy infrastructure.

Bangladesh’s first-ever short-term shariah-based sukuk drew overwhelming interest from individuals and institutions at its debut auction yesterday.

Investors submitted bids worth Tk 56,607 crore for the 273-day sukuk, more than 10 times the issuance target of Tk 5,500 crore.

The shariah-based bond, issued by the government to finance the Important Rural Infrastructure Development Project-2 (IRIDP-2), carries an annual rental rate of 9.36 percent. The Bangladesh Bank (BB) held the auction in Dhaka on behalf of the government.

Shariah-based banks and financial institutions, Islamic banking branches and windows of conventional banks, institutional investors, and individual investors participated in the auction, the BB said in a statement. Given the overwhelming demand, the sukuk was allotted to investors on a pro-rata basis.

Interest in shariah-compliant instruments has been rising since their launch in December 2020. With yesterday’s auction, the total amount raised by the government through sukuk has exceeded Tk 53,000 crore.

The BB said the introduction of a short-term sukuk, alongside existing long-term Islamic securities, would strengthen liquidity management for shariah-based banks and financial institutions. The central bank plans to issue more sukuk bonds in days to come.

In this regard, Istequemal Hussain, director of the Debt Management Department at BB, told The Daily Star that they plan to raise Tk 30,000 crore in the next fiscal year through the issuance of various sukuk bonds, which will be open to individual investors.

The BB said the issuance expands shariah-compliant investment opportunities for Islamic financial institutions and individual investors.

The short-term sukuk will qualify as a Statutory Liquidity Reserve (SLR) asset for eligible banks and financial institutions, while Islamic banks will be able to use it as collateral to access the central bank’s Islamic Banks Liquidity Facility (IBLF).

Trading of the sukuk in the secondary market will begin today, allowing banks, financial institutions, insurance companies, provident and mutual funds, and individual investors to buy and sell the instrument. According to the BB, 727 successful bids from individual investors, provident funds, mutual funds, and deposit insurance entities were allotted sukuk worth around Tk 87.37 crore.

Bangladesh's gross national savings (GNS) are projected to decline to 26.93 per cent of gross domestic product (GDP) in the outgoing fiscal year-hitting a five-year low,Demographics

The latest savings figure collated by Bangladesh Bureau of Statistics (BBS) marks a decline of 0.74-percentage points from the estimated 27.67 per cent recorded in the past FY2024-25, extending a downward trend that began after the post-pandemic peak.

Economists attribute the fall in national savings to mounting pressure on household finances amid persistently high inflation, slower income growth and subdued private-sector investment.

The country's GNS stood at 29.25 per cent of GDP in FY2021-22 before rising to a five-year-high 29.95 per cent in FY2022-23.

Since then, it has steadily declined to 28.42 per cent in FY2023-24, 27.67 per cent in FY2024-25 and an estimated 26.93 per cent in FY2025-26.

In terms of volume, gross national savings are estimated at Tk 15.26 trillion in the current fiscal year.

Gross national savings measure the portion of national disposable income that remains after total consumption expenditure is deducted.

It is a key indicator of an economy's capacity to finance investment from domestic resources without relying excessively on external borrowing.

Economists say the dip in savings reflects deeper structural challenges facing the economy.Economics

"Households are increasingly spending a larger share of their income on essential goods and services because of prolonged inflationary pressure," Dr Zahid Hussain, former lead economist at the World Bank's Dhaka office, told The Financial Express.

"When inflation remains elevated for a prolonged period, particularly since the outbreak of the Ukraine war, families dip into their savings to maintain consumption. As a result, aggregate national savings tend to decline."

Bangladesh has experienced inflation above the government's comfort range for several years. Rising food, transport and utility costs have significantly eroded purchasing power, particularly among low- and middle-income households.

Weak private investment has also contributed to the decline in savings.

Economists note that savings and investment are closely linked. Lower profitability, an uncertain business environment, foreign-exchange constraints and higher borrowing costs have discouraged fresh private investment, reducing incentives for businesses and households to save.

Dr Mohammad Yunus, research director at Bangladesh Institute of Development Studies (BIDS), told the FE that actual household savings could be much lower as a significant share of national savings comes from corporate entities and autonomous and semi-autonomous government organisations.Business News

He says the decline in savings should serve as a warning for policymakers.

"A sustained decline in national savings reduces the pool of domestic resources available for investment. If investment demand recovers while savings remain weak, the economy may become increasingly dependent on foreign borrowing," he notes.

The latest figures also highlight a widening gap between Bangladesh's long-term development ambitions and current macroeconomic realities.

Historically, high domestic savings have been a key driver of rapid economic growth across Asia. Countries such as China, South Korea and Vietnam maintained high savings rates during their industrialisation, enabling them to finance large-scale investment programmes.

Although Bangladesh's savings rate remains comparatively strong by regional standards, the recent decline suggests growing stress in the economy.

Dr M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, thinks restoring macroeconomic stability would be crucial to reversing the trend.Demographics

"Bringing inflation under control, improving investor confidence, ensuring stable energy supplies and strengthening financial-sector governance are among the measures needed to improve the situation," he suggests.

He adds that there is a direct relationship between macroeconomic stability and household saving behaviour.

"When people are confident about future income prospects and inflation is moderate, they are more likely to save. Conversely, prolonged uncertainty discourages savings and long-term investment decisions."

The government and Bangladesh Bank have recently adopted tighter monetary and fiscal measures aimed at containing inflation and stabilising the external sector.

Dr Md Ezazul Islam, director-general of Bangladesh Institute of Bank Management (BIBM), says inflation could have been much higher without the central bank's tight policy stance.

"We believe these tighter policy measures will help ease inflationary pressures in the coming months."Economics

For now, however, the provisional BBS estimates suggest Bangladesh's domestic savings base is under increasing pressure, stoking concerns about the economy's ability to sustain investment-led growth without greater reliance on external financing.