Market capitalization, index, and trading volume in the country's stock market have increased. However, the market's position relative to the overall size of the economy has weakened further. In the recently concluded fiscal year 2025-26, the Dhaka Stock Exchange's (DSE) 'market cap to GDP' ratio decreased to 11.42 percent, down from 11.93 percent in the previous fiscal year. That is, although market capitalization increased, the size of the stock market relative to GDP has contracted further.
According to DSE data, at the end of fiscal year 2025-26, the total market capitalization of all types of securities, including government bonds, stood at Tk 6,98,692 crore. A year ago, it was Tk 6,62,271 crore. That is, market capitalization increased by Tk 36,421 crore during the year. Excluding government bonds, the market capitalization of other securities increased by Tk 35,877 crore.
However, the ratio of market capitalization has decreased as it could not keep pace with GDP growth. According to analysts, this reflects the weak position of the capital market compared to the country's economy.
In developed economies around the world, the 'market cap to GDP' ratio is usually between 100 and 200 percent. In the United States, it is more than double the GDP. In the United Kingdom, it fluctuates between 91 and 120 percent, and in India, between 125 and 137 percent. In contrast, Bangladesh's ratio is just over 11 percent, indicating the limited scope of the country's capital market.
No new IPOs for two years
Capital raising from the stock market for the country's private sector has virtually stalled. In June 2024, Techno Drugs Limited last raised Tk 100 crore through an IPO. Since then, no new IPOs have been approved for two consecutive fiscal years.
Market insiders say that due to the lack of new company listings, investment opportunities are decreasing, and market depth is not increasing. Currently, although there are hundreds of thousands of registered companies in the country, not even four hundred companies have raised capital from the stock market.
DSE director Minhaz Mannan Emon said that the pace of bringing new companies to the market has slowed as the regulatory body is busy reforming IPO regulations. As a result, new investment opportunities have not been created.
Positive progress in index and trading
Although no IPOs came, various indices of the stock market saw positive changes in fiscal year 2025-26. The DSE's main index, DSEX, rose more than 19 percent during the year to reach 5,763 points. The DS-30 index rose nearly 20 percent, and the Shariah-based DSES index rose more than 10 percent.
Trading activity also picked up significantly. In the outgoing fiscal year, a total of Tk 1,72,689 crore worth of securities were traded on the DSE, which is about 56 percent higher than the previous year.
During the same period, trading by foreign and expatriate investors increased to Tk 4,943 crore, which is more than Tk 1,000 crore higher than the previous year. Trading through mobile apps also increased by about 79 percent to reach Tk 28,794 crore.
Structural weaknesses behind the improvement
According to analysts, the recent rise is mainly dependent on the shares of weak and low-quality companies. Currently, out of the 360 listed companies, 125 are in the 'Z' category. Among them, 62 companies have been identified as having suspended production or being high-risk.
Saiful Islam said that besides improving the quality of existing companies, there is no alternative to bringing new and good companies to the market. Otherwise, sustainable development of the market will not be possible.
Md. Al-Amin said that due to the low number of good quality listed companies, there is a shortage of attractive shares for investors. To strengthen the market in the long term, it is essential to add quality new companies.
On the other hand, Bangladesh Securities and Exchange Commission spokesperson Abul Kalam said that the commission is working to bring good companies to the market through changes in IPO regulations, adding international valuation standards, and tax incentives. They hope that once new quality companies are listed soon, the size and depth of the country's capital market will increase further.
