Bangladesh stocks were worst in South Asia last year

Although it offered the highest dividend yield in the region, the Bangladesh stock market recorded the worst performance among South Asian economies last year, dragged down by poor corporate earnings, especially in the banking sector, according to a new review.

The benchmark DSEX index fell 6.7 percent over the year.

By contrast, India's BSE Sensex rose 8.52 percent. Pakistan's KSE index jumped 45 percent, while Sri Lanka's CSE All index climbed 41 percent.

Elsewhere in Asia, Vietnam's VNI Index advanced 39 percent, and Indonesia's JCI Index gained 22 percent. Thailand's SET index was the only other major laggard, dropping 10 percent.

A performance review for 2025 by BRAC EPL Stock Brokerage said the Bangladesh market saw persistently weak trading activity throughout the year. Market turnover reflected fragile investor sentiment amid a mix of global and domestic pressures, including new US tariff imposition, international conflicts, stress in the banking sector, and local political developments.

While some macroeconomic indicators showed signs of improvement, including interest rates, inflation, and the foreign exchange market, concerns over banking sector reforms and rapidly rising non-performing loans continued to weigh on confidence, the review said.

Corporate earnings of listed companies deteriorated in the first nine months of the year to September, dropping about 423 percent year-on-year. The slump was driven largely by weak results from several listed banks and non-bank financial institutions.

Investor sentiment towards the banking sector remained highly cautious, reflecting recent reform measures, slower business growth, and elevated levels of non-performing loans, according to Brac EPL.

The non-bank financial institution sector recorded the steepest price fall, with share prices sliding 27 percent over the year, tracking weaker earnings.

Although the banking sector delivered the poorest overall performance, unusually strong earnings disclosures from a handful of banks almost doubled their share prices. This helped limit the broader sector decline to 4 percent.

Apart from general insurance, paper and printing, and ceramics, all sectors recorded price declines during the year, the review said.