Ahsan Habib

The net foreign portfolio investment in Bangladesh continued to fall in the July-March period of fiscal year 2023-24 due to the negative economic outlook, repeated devaluation of the local currency against the US dollar, and policy instability.

The national budget for the fiscal year of 2024-25 is going to be presented in parliament on Thursday with monumental tasks ahead for the government to collect more revenues and contain stubbornly high inflation.

The key index of the Dhaka Stock Exchange plunged by 1,000 points in a span of three months as investors keep selling their holdings, fearing further deterioration of economic indicators.

Bangladesh’s stock market has never fallen into such a bad situation in terms of the narrowing of investment opportunities in the last 30 years, said Abu Ahmed, a stock market analyst.

According to a provisional estimate of the Bangladesh Bureau of Statistics (BBS), consumption of goods and services grew 3.53 percent in 2023-24, up from 2.52 percent in the last fiscal year.

Bangladesh's factory output grew 6.66 percent in the current fiscal year, the slowest pace of expansion since the Covid-19 pandemic hit the country, as the stubbornly high inflation hurt domestic demand and the shipment of export-oriented goods slowed.

The profit margin of Grameenphone Ltd was around seven times more than that of Robi Axiata Ltd in 2023.

Stock investors in Bangladesh are leaving the share market as they are losing their hard-earned money because of the persisting fall of the indices driven by the prolonged economic crisis, the worsening health of the banking industry, and rising interest and exchange rates.

SS Steel Ltd has registered higher turnover thanks to increased sales ever since the steelmaker started acquiring several companies in 2020, but its overall profit has dropped.

Investors who owned the issues of good companies that provided at least 50 percent dividend in their last financial year incurred losses in the first four months of 2024. On the other hand, people who bet on low-performing companies, which declared less than 15 percent dividends, saw their portfolio inflate.

Why is there such a huge discrepancy between multinational banks and state-run lenders despite operating in the same business environment? The reason is a lack of efficiency in making business decisions, business focus, and political bias.

As a result, general investors remained in the dark about the financial performance of the company during this period.

The profit amounted to Tk 999 crore, soaring 70 percent year-on-year. It was Tk 587 crore in 2022.

Analysts say the regulator’s intervention is denting investors’ confidence and it comes at a time when they are still smarting from the wounds caused by the 18-month-long floor price, a period when most of the stocks were untradeable.

The government spent Tk 246,583 crore in July-January of 2023-24 out of the total budget of Tk 761,785 crore for the entire fiscal year, figures from the finance ministry showed. The outlay under interest payments and subsidies was Tk 88,226 crore, which was 36 percent of the allocation.

Since the floor price removal, the stocks have been bleeding owing to massive sell-offs by local and foreign investors as the economic uncertainty persists

In the last decade, the debt-to-GDP ratio rose by 13 percentage points. The IMF forecasts that the ratio will reach 43.5 percent in 2028-29.

A top official of the ministry said the government would increase the number of beneficiaries in two major schemes – the old age allowance and the allowance for widows, deserted, or destitute women.

The British multinational bank logged profits of Tk 2,335 crore in 2023, up from Tk 1,655 crore in 2022, according to its financial reports.

The merger guideline for banks and financial institutions is being hailed as a major step towards fixing the problem in the financial sector, which has been weighed down by massive default loans and weak corporate governance.