After the fall of the Awami League government on 5 August last year, the capital market experienced a prolonged downturn. On 18 August, former banker Khondkar Rashid Maksud was appointed Chairman of the Bangladesh Securities and Exchange Commission (BSEC), marking the beginning of a series of reform initiatives in the capital market.

About nine months after taking his responsibility, the daily turnover has grown significantly-from Tk250 crore to over Tk1,000 crore and fines totaling over Tk350 crore have been imposed on various individuals and institutions for involvement in stock market manipulation.

Although the stock market faced a significant decline right after the new BSEC Chairman assumed office, the downturn became particularly notable. On 21 August 2024, the index dropped by 108 points in a single day. Then, from 2 September to 9 September, the index continued to fall for six consecutive days, losing a total of 199 points. This consistent decline caused unrest among investors.

Following that, under the leadership of Rashid Maksud, the market experienced one of the longest consecutive declines in recent memory - a 13-day losing streak - during which the index dropped by over 300 points. Daily turnover fell to as low as Tk250 crore.

In response, frustrated investors took to the streets demanding the Chairman’s resignation. In March of this year, unrest also spread within BSEC itself, leading to a work stoppage among officials. After three days of strike, normal operations at BSEC resumed.

After that, the BSEC met with Chief Adviser Prof Muhammad Yunus to ensure investor protection. At the meeting, five key directives were issued to strengthen the market. A taskforce was also formed, which is currently working on amending 17 rules and regulations related to the capital market.

According to market insiders, investor confidence began to return following significant measures announced in the 2025-26 national budget aimed at boosting the capital market. In addition, the taskforce has already issued decisions concerning mutual funds, IPOs, and the bond market, all of which are having a positive impact.

Speaking to The Daily Sun, Investment Corporation of Bangladesh (ICB) Chairman Prof Abu Ahmed said, “Everything takes time. A new commission may have been appointed, but it’s unrealistic to expect overnight improvement in the market.”

He added, “Progress on the five directives from the Chief Adviser is being reviewed through monthly meetings, and investors are being kept informed. This transparency is building investor confidence. Once all reform activities are completed, it is the investors who will ultimately benefit.”

Five key directives from the Chief Adviser

In May this year, Chief Adviser Prof Muhammad Yunus issued five key directives to ensure the dynamism of the capital market. These directives are as follows: listing of state-owned multinational companies, encouraging large private companies to list, engaging international experts for reforms, taking action against irregularities, promoting capital market-based financing.

Taskforce formed to reform 17 key areas

To foster the development of the stock market, restore investor confidence, and ensure international standards of governance, a five-member taskforce has been formed. This taskforce is working on reforms in 17 key areas, including: identifying and addressing market size issues, promoting capital market for long-term financing, enhancing market governance, strengthening BSEC’s institutional capacity, improving oversight of market institutions, updating private placement regulations, ensuring transparency and investor protection, modernising laws for market intermediaries, enhancing investor confidence, standardising penalties and enforcement, improving coordination among regulators, merger and acquisition oversight.

Heavy fines

One of the most talked-about figures during the tenure of former BSEC Chairman Shibli Rubayat Ul Islam was Abul Khair Hiru. Under the current commission, led by Khondkar Rashid Maksud, Hiru and several of his close associates have been heavily fined.

On 5 December last year, the new commission imposed a collective fine of Tk134.59 crore on Hiru and his associates. The highest fine of Tk33.66 crore was imposed on his father, Abul Kalam Matbor, followed by Tk32.46 crore on Hiru himself. Others fined include Hiru’s wife Kazi Sadia Hasan, sister Kanika Afroze, brother Sajed Matbor, Mohammad Bashar, brothers-in-law Kazi Fuad Hasan and Kazi Farid Hasan, relative Aleya Begum, and his affiliated company Monac Holdings.

The commission has also removed cricketer Shakib Al Hasan from his role as BSEC goodwill ambassador. In addition, he was fined Tk50 lakh for alleged involvement in share manipulation.

In its most recent commission meeting, BSEC initiated a special audit into the financial operations of three Beximco Group companies—Beximco Limited, Beximco Pharmaceuticals, and Shinepukur Ceramics—covering the past five years.

BSEC has also recently declared Salman F Rahman, his son, and former BSEC Chairman Shibli Rubaat Ul Islam as undesirable in the capital market.

Listed companies and IPO investigations

During Shibli Rubayat Ul Islam’s tenure, five companies raised a total of Tk661 crore through IPOs. However, since August 2024, the current commission has not approved any new IPOs.

Though no new companies have entered the market since 5 August 2024, the current commission has initiated investigations into several companies that were previously listed.

Asiatic Laboratories Limited raised Tk95 crore from the market prior to 5 August and began trading in March 2025. In November last year, the current commission formed a three-member probe committee to investigate the company’s fund utilization and financial reports from the past six years.

Best Holdings Limited raised Tk350 crore through the book-building method and was scheduled to begin trading in February 2024. However, in September, the new commission ordered a thorough investigation into the IPO approval and related issues.

The IPO application of Borak Real Estate Limited, which had received approval to raise Tk400 crore through book-building, was later canceled by the current commission.

Investor numbers decline

While the capital market remained relatively stable at the start of 2024, the change in political landscape from August onward led to significant shifts in investor behavior.

According to data from Central Depository Bangladesh Limited (CDBL) As of January 1, 2024, the capital market had a total of 17.56 lakh investors, comprising 13.26 lakh male investors, 4.29 lakh female investors, and 55,285 non-resident (NRB) investors. By August 4, 2025, the total number of investors had declined to 16.30 lakh, including 12.37 lakh male investors, 3.92 lakh female investors, and 44,560 foreign investors.

Index and market turnover

On the first trading day of 2024, the benchmark index of the Dhaka Stock Exchange (DSE) stood at 6,242 points. As of the close of trading on 4 August 2025, the index had dropped to 5,471 points, reflecting a decline of 771 points.

Despite the dip in the index, market turnover has shown signs of recovery. At the beginning of August, daily turnover surpassed Tk1,000 crore for three consecutive trading sessions. The current market capitalization stands at Tk7 trillion (7 lakh crore).

Investor reaction

General investors are currently enjoying the recent upward trend in the stock market. ANM Ataullah Nayeem, President of the Bangladesh Investors’ United , told the Daily Sun that the continuous market downturn that began on August 5 last year had put the majority of investors at serious risk. “There were many protests during that time. But now, the current trend of the stock market is something we can rely on,” he said.

He mentioned that the government is undertaking various reforms, which are beginning to show positive effects. However, it is crucial to ensure that no one can manipulate the market like before and embezzle money from general investors. The surveillance system must be improved.

Ataullah Nayeem emphasized the need to activate institutional investors in the market at this time. He said the Investment Corporation of Bangladesh (ICB) must be freed from the burden of debt repayment. When ICB receives funds-such as the recent allocation of Tk 10,000 crore-it focuses entirely on repaying loans to various banks. Instead, ICB should be enabled to create a favorable environment for investing in the capital market.

He also noted that mutual funds should be made more investor-friendly. Only then, even after reforms, the stock market will remain conducive to investment.