Foreign investor participation in the Dhaka Stock Exchange (DSE) rose sharply in fiscal year (FY) 2025-26 as low market valuations, improving corporate earnings and a broad recovery in trading activity attracted renewed overseas interest, according to the DSE’s annual market summary.
Foreign trade turnover increased 25.41 per cent to Tk4,943.09 crore in FY26 from Tk3,941.41 crore a year earlier, while the market price-to-earnings (P/E) ratio eased marginally to 9.26 from 9.34, indicating the rally was broadly supported by earnings growth rather than stretched valuations.
The benchmark DSEX index climbed 19.11 per cent to 5,762.83 from 4,838.39, reversing the previous year’s 9.20 per cent decline. The blue-chip DS30 index advanced 19.96 per cent to 2,178.38 from 1,815.96, while the DSE Shariah Index (DSES) gained 10.12 per cent to 1,168.13 from 1,060.76.
The rebound was accompanied by a sharp improvement in market liquidity. Mainboard turnover jumped 55.53 per cent to Tk1,72,689.42 crore from Tk1,11,035.72 crore, lifting average daily turnover to Tk722.55 crore from Tk472.49 crore. Trading volume rose 45.80 per cent to 59.33 billion shares and units from 40.69 billion, while average daily volume increased to 248.25 million from 173.16 million.
Market capitalisation grew 5.50 per cent to Tk6.99 lakh crore at the end of FY26 from Tk6.62 lakh crore a year earlier. Equity strengthened its dominance, accounting for 51.32 per cent of total market capitalisation against 49.33 per cent a year earlier, while the share of government treasury bonds declined to 47.69 per cent from 49.77 per cent.
Corporate bonds recorded modest growth and the mutual fund segment contracted slightly.
Despite the increase in market value, the market capitalisation-to-GDP ratio fell to 11.42 per cent from 11.93 per cent, reflecting faster expansion of the broader economy than the stock market.
Trading trends varied across platforms. Turnover on the Alternative Trading Board (ATB) surged 73.83 per cent, SME board turnover slipped 1.46 per cent and SME block-market turnover plunged 33.41 per cent from FY25.
Mobile trading also evolved. Although registered mobile trading users fell 37.42 per cent to 16,313 from 26,067, turnover executed through mobile platforms jumped 78.93 per cent, raising mobile trading’s share of total market activity to 16.67 per cent, suggesting fewer but more active investors traded larger values digitally.
One area failed to mirror the market’s recovery.
Government tax collection from DSE transactions under Sections 135 and 137 of the Income Tax Act fell 11.33 per cent to Tk146 crore from Tk164.66 crore, marking a fourth consecutive annual decline despite substantially higher trading activity.
The FY26 data point to a market that recovered strongly on the back of improved liquidity, rising foreign participation and attractive valuations, although activity remained uneven across trading segments and government revenue from the market continued to weaken.
