Bangladesh’s stock market witnessed an unusual phenomenon in fiscal year 2024–25 as over one lakh (100,000) investor accounts were closed, coinciding with a rare IPO drought—no new companies entered the market via initial public offerings throughout the year. The trading year drawing to a close without a single IPO is a situation rarely seen in recent decades. Historically, IPOs have been vital for introducing fresh capital and stimulating investor interest, especially among retail participants. This extended lull not only eroded market liquidity but also undermined confidence among brokers and investors. Amid the IPO freeze, many brokerage firms began closing dormant or low-activity accounts due to inactivity and non-payment of annual fees. Experts in the industry point out that this trend emphasizes a shortage of investment options and a wider decline in retail investor involvement in equity markets for FY25.. Market analysts point to a combination of factors behind the lack of IPOs. Regulatory delays, ongoing economic uncertainty, and stricter listing requirements are thought to have discouraged companies from pursuing public listings. Meanwhile, weak investor sentiment and subdued stock valuations have made the prospect of raising funds through IPOs less attractive . Typically, IPOs stimulate brokerage activity, generate short-term trading volume, and draw new retail investors. Without them, the market has endured reduced trade turnover and suffered from a dropout of small-scale investors seeking entry points through newly listed companies. The exodus of over 100,000 accounts signals growing disenchantment. As brokerage houses shut these inactive accounts, the number of active beneficiary owner (BO) accounts—used for stock trading—has declined. Even previously high-interest segments, such as IPO-specific accounts, have shown signs of shrinkage, according to capital market observers. Longer-term concerns are also emerging. Retail investors, who often enter the market during IPO hype and stay for the long haul, are missing—potentially reducing the investor base and dampening market depth. Moreover, having fewer active retail participants reduces the market’s strength and its capacity to handle disruptions. To bring life back to the IPO pipeline, specialists suggest various reforms. These include streamlining approval processes, offering incentives such as reduced listing fees, improving regulatory transparency, and launching market education campaigns to boost investor confidence ahead of future IPOs. The IPO drought and subsequent account closures paint a clear picture: Bangladesh’s capital market risked entering a slowdown cycle without fresh issuers and new retail engagement. As the new fiscal year approaches, restoring the IPO mechanism and revitalising investor interest will be critical for reversing the decline in active accounts and strengthening market vibrancy.
