The performance of Bangladesh’s capital market is closely linked not only to the health of listed companies but also to broader economic and financial conditions, according to Masud Khan, chairman of the Bangladesh Securities and Exchange Commission (BSEC). Khan highlighted these points during the closing program of World Investor Week 2026, held Monday at a seminar jointly organized by the Dhaka Stock Exchange (DSE) and the DSE Brokers Association of Bangladesh (DBA).
Khan emphasized that international factors such as remittance flows, oil prices, and global economic developments, as well as domestic issues including banking-sector vulnerabilities and borrowing costs, all influence the market. “We must therefore look beyond daily market movements and examine the underlying economic fundamentals,” he said, urging stakeholders to recognize the interconnectedness of these elements.
According to Khan, a sustainable recovery in the capital market depends on stronger banks, increased transparency, improved loan recovery mechanisms, responsible lending practices, and lower financing costs. Investor confidence, he noted, is essential and cannot be sustained by market sentiment alone. He further explained the relationship between banks’ health and borrowing costs, pointing out that when banks face a high proportion of nonperforming loans, their ability to extend fresh credit is limited. This dynamic tends to pressure banks into maintaining higher deposit rates to attract funds, which subsequently leads to elevated borrowing costs for businesses.
High borrowing expenses, Khan said, discourage investment and raise operational costs, negatively impacting corporate profitability and investor sentiment. He discussed the often-observed correlation between interest rates and stock market valuations, where rising rates generally exert downward pressure on equities, while lower rates tend to support higher valuations by reducing financing costs and increasing the present value of future earnings. However, he cautioned that this relationship is not automatic and that markets also react to factors such as inflation, liquidity, exchange rates, earnings prospects, and investor expectations.
Khan stressed the importance of the capital market’s responsiveness to timely and accurate information, noting that both domestic and international developments affect investor sentiment and market dynamics. He also raised concerns about the authenticity of financial statements provided by many companies.
Echoing the need for institutional strength, DSE Chairman Monirul Islam underscored the critical role of trustworthy market intermediaries in restoring investor confidence. Islam pointed out that Bangladesh currently lacks globally recognized investment banks and that most financial intermediaries operating in the country are relatively small with limited institutional capacity. “Unfortunately, we have not seen strong institutions—whether brokerage firms, merchant banks, or asset management companies—and that is something we certainly need to work on,” he said.
The program was chaired by DBA President Saiful Islam and featured remarks from three BSEC commissioners: Tamir Habib Rahman, Nahid Mahtab, and Md. Nafeez Al Tarik.