Foreign portfolio investors increased their trading activity in Bangladesh’s stock market during the 2025–26 fiscal year, but remained net sellers as they withdrew more funds than they invested.

Data from the Dhaka Stock Exchange (DSE) showed that foreign investors’ total share trading volume rose by nearly 25% from the previous fiscal year, reaching its highest level in four years. Overall market turnover also increased to Tk 49.43 billion from Tk 39.43 billion a year earlier.

Despite the higher trading volume, foreign investors sold more shares than they bought throughout most of the fiscal year, resulting in a continued net capital outflow.

Market participants attributed the selling pressure initially to political uncertainty ahead of the national election and broader macroeconomic concerns. Although foreign buying briefly recovered after the BNP-led government took office, the trend weakened following the Iran–U.S. conflict.

Analysts said rising geopolitical tensions in the Middle East and concerns over energy market volatility prompted global investors to shift funds from frontier markets, including Bangladesh, to safer and more liquid developed markets.

Market experts also identified Bangladesh’s capital gains tax regime and its calculation method as key obstacles to attracting foreign investment. They said regulatory reforms and greater policy clarity could help restore investor confidence.

DSE data showed that in May alone, foreign investors sold shares worth Tk 1.61 billion while purchasing only Tk 60 million, with much of the selling concentrated in blue-chip and fundamentally strong companies.