Morgan Stanley Capital International (MSCI) will end its more than three-year special treatment of Bangladesh's capital market in the November 2026 Index Review, paving the way for the resumption of normal index reviews and corporate-event implementation for Bangladeshi securities.
The global index provider announced on August 5 that it would no longer apply the special treatment to the MSCI Bangladesh Indexes from the November review. The special treatment dates back to February 2023, when MSCI froze index changes after Bangladesh's floor-price mechanism restricted natural price discovery and impaired market accessibility for foreign institutional investors.
The situation changed after the Bangladesh Securities and Exchange Commission removed the floor prices from the remaining affected securities, Beximco and Islami Bank Bangladesh, on June 9 this year. MSCI subsequently welcomed the removal, saying floor prices had severely hindered market accessibility and distorted price discovery.
The latest development effectively brings an end to a prolonged freeze on normal MSCI treatment of Bangladesh.
MSCI said it will implement in November all index-review changes that had been postponed under the special treatment. These include changes in the Number of Shares (NOS) and Foreign Inclusion Factors (FIF) for securities classified in Bangladesh.
Regular implementation of corporate events will resume on December 1.
The announcement means Bangladesh will remain under the special arrangement for the upcoming August review, but normalisation will begin with the November review.
However, MSCI has also left Bangladesh with a clear warning. It said any reintroduction of floor prices on listed securities could trigger a consultation on potentially reclassifying Bangladesh from Frontier Market to Standalone Market status.
