Norway’s Sovereign Wealth Fund Sees Bangladesh Investments Drop to Eight-Year Low2 min read

Norway’s sovereign wealth fund, the largest in the world, has scaled back its investments in Bangladesh’s capital market, hitting an eight-year low in 2024. Data from Norges Bank Investment Management reveals a 5.73% decline, with total investments dropping to $141.93 million, down from $150.56 million in 2023 reportedly.

This marks the lowest investment level since 2016, when the fund had allocated $111 million to Bangladesh’s stock market. At its peak in 2020, investments stood at $248.35 million, but since then, the fund has slashed its exposure by 42.85%.

Market analysts attribute this steady retreat to a combination of currency fluctuations, regulatory inconsistencies, and investor concerns over market stability. One key factor was the imposition of floor prices on listed companies by the Bangladesh Securities and Exchange Commission (BSEC) in July 2022. Designed to curb excessive stock price declines, this policy remained in place for 18 months before finally being lifted on January 18, 2024.

Despite the removal of restrictions, the Bangladesh stock market has struggled to restore investor confidence. Persistent economic challenges, including inflation, foreign exchange volatility, and trade deficits, have added to concerns. Additionally, issues such as market manipulation, governance lapses, regulatory uncertainty, and the lack of high-performing large companies have discouraged foreign investments.

The Norwegian fund began investing in Bangladesh’s stock market in 2015 with an initial stake of $19 million. Over the years, its investments saw both growth and decline:

• 2017: $244.41 million
• 2018: $202.91 million
• 2019: $188.12 million
• 2020 (Peak Year): $248.35 million
• 2024: $141.93 million (Lowest since 2016)

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Despite the overall reduction, the Norwegian fund made some strategic reinvestments. In 2024, it reentered Prime Bank, a company it had withdrawn from in 2020. Additionally, it invested in MJL Bangladesh, expanding its portfolio to 12 companies, up from 10 in the previous year. However, this still lags behind its earlier holdings in 20 companies in 2020 and 22 in 2019.

In 2024, the fund allocated investments across 12 major companies, with its top holdings including:

• BRAC Bank – $36.27 million
• Square Pharmaceuticals – $36.13 million
• Grameenphone – $31.33 million
• City Bank – $12.47 million
• Prime Bank – $8.26 million
• Renata – $4.41 million
• Bangladesh Submarine Cables Company – $4.01 million
• MJL Bangladesh – $3.34 million
• Olympic Industries Ltd – $1.99 million
• Beximco Pharmaceuticals – $1.44 million
• Singer Bangladesh – $1.08 million
• Walton Hi-Tech Industries Ltd – $1.16 million

Interestingly, the fund increased its holdings in BRAC Bank, Square Pharmaceuticals, City Bank, and Grameenphone, while reducing stakes in Renata, Beximco Pharmaceuticals, Singer Bangladesh, Bangladesh Submarine Cables Company, Walton, and Olympic Industries Ltd.

While Norway’s sovereign wealth fund has scaled back its exposure in Bangladesh, its continued presence in key companies suggests a cautious but ongoing commitment. With economic and regulatory reforms, the question remains—can Bangladesh’s stock market regain the confidence of global investors?

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