Analysts highlighted that foreign investors lean towards companies with solid business potential and strong governance.
In July, Prime Bank and Brac Bank attracted the most foreign portfolio investments, as interest in Bat Bangladesh, Renata, and Reckitt Benckiser Bangladesh diminished.
Data from the Dhaka Stock Exchange (DSE) showed that net foreign portfolio investments rose by about TK250 crore during the same period. A total of 145 companies received foreign portfolio investments, with 24 companies seeing increases, 27 experiencing declines, and 94 maintaining their status.
Foreign investments were most substantial in Prime Bank, followed closely by Brac Bank, IDLC Finance, Marico, and Uttara Bank. Notably, Brac Bank garnered TK233 crore, while Prime Bank attracted TK78 crore, and so on for the others.
On the flip side, significant sales were noted in Bat Bangladesh, Renata, Reckitt Benckiser, and United Commercial Bank, with the highest selling at TK48 crore from Bat Bangladesh and additional sales from other firms.
Analysts indicated that foreign investors tend to favor firms with robust business strategies and governance. However, the presence of numerous “junk stocks” in the market means that investment often narrows to a select few companies.
Moreover, broader economic factors weigh on investor sentiment. Challenges like macroeconomic instability, low reserves, currency fluctuations, and political unrest could deter foreign capital inflow.
The MSCI mentioned in its June 2025 review that the Bangladesh Securities and Exchange Commission (BSEC) had gradually lifted floor price restrictions from July 2022 on most securities but kept some limits intact. Concerns over capital repatriation delays were also reported due to liquidity issues in the foreign exchange market.
As a result, MSCI is expected to maintain the special treatments initiated in February 2023, aimed at minimizing adjustments to the Bangladeshi index and addressing concerns about index replication.
In a previous September review, FTSE Russell shared that with the removal of floor prices on almost all stocks except for Beximco Limited and Islami Bank Bangladesh, they would assess Bangladesh’s securities for FTSE index eligibility in September 2024.
During the Foreign Investors Summit held on August 13, 2025, a special advisor to the Chief Advisor noted that Bangladesh has, unlike many nations, avoided a serious economic crisis amid recent political shifts. He emphasized stable GDP growth and declining inflation.
Chowdhury pointed out that in a global context, Bangladesh’s capital markets performed well in July, ranking third in global market gains, which is impressive for a market recovering from past turmoil. He encouraged both foreign and domestic investors to look toward Bangladesh for long-term investment opportunities.
By the end of July, the top companies by foreign portfolio investment included Brac Bank (35.5%), Olympic Industry (33.96%), Vexico Pharma (27.55%), among others.
The MD of a leading securities firm stated that foreign investors often seek long-term gains, thus they evaluate companies based on financial health and transparency. Unfortunately, there are not many companies that meet these criteria in Bangladesh.
He also noted that Brummer and Partners represents the largest foreign fund manager operating in the country with about TK2,000 crores managed, alongside Asia Frontier Capital.
During the summit, Takao Hirose from Contextual Investment LLC candidly shared insights about global investors, characterizing them as quick to act and demanding, but also somewhat unpredictable. He warned that instability could drive them away, and called for a robust domestic investor base to avoid overdependence on foreign capital.
Ruchir Desai, a fund manager at Asia Frontier Investments Limited, underlined the importance of stability, drawing comparisons between Bangladesh and Sri Lanka. He observed that foreign investor trust in Bangladesh weakened from 2018 onwards, due to regulatory hurdles and market closures.
Desai stressed that although Bangladesh shows promise with decreasing inflation and recovering exports, stability in political and policy environments is crucial for future growth. He expressed optimism about the country’s capabilities over the next five to six years, provided necessary changes are made.
Another analyst remarked on the record dividends listed multinationals paid in 2024, in stark contrast to the previous year’s disappointing rates due to market instabilities. This year, Bangladesh has made notable progress in overcoming those challenges.
An MD from a brokerage firm explained that foreign investors have been net sellers on the DSE since 2018, with several regulatory issues contributing to growing concerns. DSE Chair Mominul Islam discussed at the summit the need for regulatory independence to avoid past pitfalls, asserting that regulatory reforms have been put in place to address common foreign investor complaints.
However, Bangladeshi stocks still face “special treatment” status from MSCI, a carryover from last year’s evaluation.
