Bangladesh’s stock market has continued to decline sharply even after the formation of a new government, with the Dhaka Stock Exchange’s main index DSEX dropping 223 points, or 4.42 percent, on Sunday to fall back to 5,000 points. The market had initially surged following a peaceful national election, but optimism quickly faded as sustained sell-offs and liquidity shortages returned.

Market participants attribute the downturn to investor panic triggered by the ongoing Middle East conflict and a long-standing crisis of confidence. Former BSEC chairman Faruq Ahmad Siddiqi said panic selling has intensified due to war fears, though he noted that the scale of the decline in Bangladesh is abnormal compared to other countries. He also pointed to structural weaknesses, including a shortage of strong companies and low financial literacy among traders.

Investor groups expressed frustration over the lack of change in the securities regulator after the new BNP-led government took office. Current BSEC chairman Khondkar Rashed Maksud defended the commission’s record, citing reforms and efforts to attract quality listings. However, with few new companies entering the market and many existing ones in poor standing, analysts warn recovery will be difficult without fresh investment.