Norway鈥檚 sovereign wealth fund, the world鈥檚 largest fund, saw its investments in the Bangladesh capital market drop to an eight-year low in 2024, declining by 5.73 per cent to $141.93 million from $150.56 million in 2023, according to data from Norges Bank Investment Management.
The investment amount in 2024 was the lowest since 2016, when the fund invested $111 million in the country鈥檚 stock market.
The fund鈥檚 investments peaked at $248.35 million in 2020 but have since declined by 42.85 per cent.
Market experts attributed the decline to currency fluctuations and regulatory policies that deviate from international practices, such as the imposition of floor prices on listed companies.
The Bangladesh Securities and Exchange Commission introduced the floor price restriction in July 2022 to curb excessive stock price declines amid economic concerns.
The restriction remained in place for 18 months before being lifted on January 18, 2024.
Experts noted that Bangladesh鈥檚 capital market has struggled to demonstrate stability which contributed to the negative sentiment of the foreign investors.
The country鈥檚 economy is also grappling with inflation, foreign exchange volatility, and trade deficits.
Additionally, market manipulation, governance issues, frequent regulatory changes, and a lack of well-performing large companies have deterred foreign investments.
Since 2015, the Norwegian sovereign wealth fund has been investing in Bangladesh鈥檚 stock market, starting with $19 million.
The fund鈥檚 net investment in the market stood at $244.41 million in 2017, $202.91 million in 2018, and $188.12 million in 2019.
Despite reducing its overall investment, the Norwegian fund reinvested in Prime Bank in 2024 after withdrawing from the company in 2020.
It also invested in MJL Bangladesh, increasing the number of companies it holds shares in to 12, up from 10 in the previous year.
However, this remains significantly lower than its investments in 20 companies in 2020 and 22 in 2019.
The fund鈥檚 investments in 2024 included $36.27 million in BRAC Bank, $36.13 million in Square Pharmaceuticals, $31.33 million in Grameenphone, $12.47 million in City Bank, $8.26 million in Prime Bank, $4.41 million in Renata, $4.01 million in Bangladesh Submarine Cables Company, $3.34 million in MJL Bangladesh, $1.99 million in Olympic Industries Ltd, $1.44 million in Beximco Pharmaceuticals, $1.08 million in Singer Bangladesh, $1.16 million in Walton Hi-Tech Industries Ltd.
Compared with 2023, the fund increased its holdings in BRAC Bank, Square Pharmaceuticals, City Bank, and Grameenphone, while reducing its stakes in Renata, Beximco Pharmaceuticals, Singer Bangladesh, Bangladesh Submarine Cables Company, Walton, and Olympic Industries Ltd.