Foreign investors’ participation in Bangladesh’s capital market is increasing amid reform initiatives and efforts to simplify investment procedures, with their total transactions rising 37.6 percent in the first eight months of this year compared to the same period last year.

The total value of foreign investors’ transactions from January to August this year reached BDT 37.01 billion, compared to BDT 26.87 billion during the corresponding period in 2025, according to data from the Dhaka Stock Exchange (DSE).

The transactions increased by around BDT 10.13 billion year-on-year. Moreover, the volume of foreign transactions during the first eight months of 2026 reached nearly 94 percent of the total transactions recorded throughout 2025.

Market insiders attribute the rise in foreign participation to a range of reform initiatives, including preparations to upgrade Bangladesh’s capital market from frontier market status to emerging market status, engagement with international index providers, simplification of procedures for foreign investors and efforts to shorten the settlement cycle.

DSE Managing Director Nuzhat Anwar told BSS on Saturday that the increase in foreign transactions was not attributable to any single initiative by the DSE.

“Preparations to upgrade the market from frontier to emerging market status, engagement with organisations such as MSCI, simplification of Bangladesh Bank’s rules relating to Non-resident Investors’ Taka Accounts (NITAs), and the initiative to introduce a T+1 settlement system have collectively sent positive signals to foreign investors,” she said.

She said a procedural complication concerning NITAs, which are used by foreign portfolio investors to invest in Bangladesh, had recently been eased by Bangladesh Bank.

Previously, the accounting of funds through NITA accounts had to be handled separately for individual transactions. Following the DSE’s communication with the relevant authorities, Bangladesh Bank simplified the procedure.

Under the revised arrangement, foreign investors can complete the necessary accounting when repatriating funds from Bangladesh instead of undertaking separate calculations for every transaction. The change is expected to make the investment process more convenient for foreign investors.

The proposed transition to a T+1 settlement system has also sent a positive signal to international investors, Anwar said.

She added that the DSE was working to ensure professional market management, transparency and accountability while maintaining regular communication with foreign investors. The combined impact of these initiatives is contributing to increased foreign participation, she noted.

DSE data show that foreign transactions fluctuated considerably during the first eight months of 2026, although the overall volume remained significantly higher than that of the corresponding period last year.

Foreign transactions stood at BDT 3.77 billion in January and rose to BDT 6.63 billion in February. The figure subsequently declined to BDT 2.72 billion in March and BDT 1.75 billion in April.

Transactions surged in May to BDT 8.31 billion, the highest monthly figure recorded during the first eight months of this year.

Foreign transactions amounted to BDT 5.4 billion in June and BDT 5.23 billion in July before declining to BDT 3.18 billion in August.

In comparison, foreign investors’ transactions totalled BDT 26.87 billion during the first eight months of 2025.

Monthly transactions that year stood at BDT 1.81 billion in January, BDT 2.64 billion in February and BDT 1.71 billion in March.

The volume increased to BDT 4.26 billion in April and peaked at BDT 5.06 billion in May. Transactions then declined to BDT 2.85 billion in June before rising to BDT 4.91 billion in July and falling to BDT 3.71 billion in August.

For the whole of 2025, foreign investors’ total transactions amounted to BDT 39.2 billion.

Against that backdrop, the BDT 37.01 billion recorded in the first eight months of 2026 indicates that foreign transactions have already reached nearly 94 percent of last year’s full-year total.