Market insiders have expressed concerns over the stagnation of new investments in the stock market, exacerbated by the government's recent imposition of additional VAT and supplementary duties on goods and services.
This development has only heightened investor apprehension, as the added financial burdens are expected to negatively impact market dynamics.
With commodity and service prices set to rise due to these fiscal measures, investors are contemplating the potential effects on living costs and the broader economic environment.
A prevalent fear now dominates the market: the added tax burden could escalate prices to unsustainable levels, leaving the public grappling with ever-increasing living costs.
Mojammel Haque, an investor at NLI Securities, said, "At present, investors are more inclined to withdraw their investments rather than invest further. When investments are shrinking on the stock market, the prospect of fresh investments seems futile."
He added that the rising trend in commodity prices has been ongoing for quite some time.
With the new government in power, there were hopes that inflation would ease.
However, recent policy changes have led to expectations that all kinds of goods would be adversely affected.
As a result, investors are now prioritising liquidity, retaining funds for living expenses rather than reinvesting in the stock market.
Consequently, new investments have slowed, and this trend is likely to continue.
Despite the arrival of a new commissioner and a revamped Dhaka Stock Exchange (DSE) board at the start of the year, market stakeholders have lamented the lack of measures to protect investors' interests.
Former chief research officer at Brac EPL Investment Ltd, Debbrata Kumar Sarker, said, "Investors, particularly institutional ones, invest to generate profits. If the stock market no longer offers this opportunity, who will invest here?"
He further noted that the commission should identify institutions capable of making investments and encourage them to contribute.
Recent imposition of taxes and VAT on over a hundred products has caused even more panic, prompting investors to shy away from new investments.
He also pointed out that when people’s disposable income is insufficient, investments are a distant prospect.
"People will invest only after covering their living expenses," he remarked.
Market analysis reveals that the stock market has experienced significant declines in early 2025.
On 12 January, the market saw the sharpest drop of 38 points, while 5 January recorded a fall of 34.44 points.
In contrast, the market had witnessed a slight uptick in early January, with an increase of 1.71 points on 1 January, 33.67 points on 6 January, and 9.43 points on 9 January.
However, the general trend remains downward, underlining the growing investor scepticism.
