Foreign investors are increasingly offloading shares of multinational companies listed on Bangladesh’s capital market as prolonged political uncertainty and election-related concerns deepen a broader confidence crisis, market insiders said.
Investment activity on the stock market has nearly stalled amid political instability and uncertainty surrounding the upcoming national election.
The situation has been exacerbated by a sustained decline in market indices and daily turnover, along with a sharp fall in foreign investor participation.
Trading on the Dhaka Stock Exchange (DSE) has dropped to its lowest level in several months, reflecting heightened risk aversion among both local and foreign investors.
Data show a significant contraction in foreign holdings in multinational companies.
At the end of December 2024, foreign investors held 12.02% of shares in 11 listed multinational firms. By the end of November 2025 that figure had fallen to 6.45%, underscoring the scale of the retreat.
Market analysts said foreign investors typically avoid exposure in the absence of political stability and policy clarity.
Uncertainty surrounding the election, particularly over potential changes in government, economic policy and regulation, has prompted many to shift funds to safer markets.
The impact has been most visible in multinational stocks, which traditionally attract a higher share of foreign investment.
Local investors are also remaining cautious. High inflation, elevated interest rates and broader macroeconomic pressures have encouraged many to hold cash rather than deploy fresh funds, further tightening liquidity in the market.
DSE Director Richard D’Rozario said foreign investment in Bangladesh is largely concentrated in multinational companies.
“Since the imposition of the floor price, a near-total loss of confidence developed among foreign investors, prompting large-scale sell-offs. Even after the floor price was withdrawn, selling pressure continued,” he said.
He added that amid political uncertainty and the election, foreign investors are refraining from buying new shares, expressing optimism that confidence would return once political stability is restored.
Saiful Islam, president of the DSE Brokers Association of Bangladesh (DBA), said stress in the banking sector has further shaken investor confidence, including among foreign investors.
He noted that the decision to place nine non-bank financial institutions under liquidation heightened concerns, accelerating the withdrawal of foreign funds from the market.
He also pointed to high inflation eroding consumer purchasing power, limiting earnings growth prospects for consumer-focused companies, including multinationals.
Weak corporate governance, subdued dividend performance and the absence of major initial public offerings have also made foreign investors more inclined to sell rather than commit to long-term investments, he said.
Company-level data reflect the trend. Foreign shareholding in British American Tobacco Bangladesh fell from 4.52% at the end of December 2024 to 3.31% by November 2025.
Berger Paints saw foreign ownership decline from 0.20% to 0.01%, while Singer Bangladesh recorded a complete exit, dropping from 1.37% to zero over the same period.Reckitt Benckiser (Bangladesh) PLC experienced the steepest fall, with foreign ownership plunging from 2.45% to just 0.01%.
Foreign holdings also declined in Bata Shoe, LafargeHolcim Cement, RAK Ceramics (Bangladesh) and Grameenphone.
In contrast, Unilever Consumer Care saw a marginal increase, while Linde Bangladesh recorded a small rise after having no foreign shareholding at the end of 2024.
Market participants said a sustained return of foreign investors will depend on political stability, clearer policy direction, stronger corporate governance and deeper capital markets.
Source: Daily Sun
Bd-pratidin English/ ANI
