Bhutan’s stock market, managed by the RSEB, currently has 18 listed companies with a market capitalization of around Nu 60,162 million as of March 20, 2025
The Bhutanese stock market has witnessed notable shifts in recent months, reflecting evolving investor sentiment and market dynamics. The Bhutan Stock Index (BSI) recorded an 8.04% decline, dropping from 1,529.4 on October 1, 2024, to 1,406.51 by March 6, 2025. This downturn signals a period of market correction, possibly influenced by broader economic factors, sector-specific developments, and changing investor behavior.
Despite the overall decline, market volatility has remained moderate, with occasional sharp movements indicating increased trading activity and potential shifts in investor confidence. Toward the end of the period, a slight upward trend hints at the possibility of a market recovery, sparking cautious optimism among market participants.
Analysts suggest that the recent downturn may be attributed to economic adjustments and evolving market sentiment. However, the upward momentum observed in recent days could be linked to corporate announcements, particularly proposed dividend approvals ahead of the upcoming annual general meetings (AGMs). Such developments have historically influenced trading patterns, as investors seek to capitalize on dividend payouts and potential growth opportunities.
Furthermore, the BSI’s performance reflects the relatively narrow market structure, with only 18 listed companies across sectors such as manufacturing, finance, publishing, distribution, tourism and trading.
As Bhutan’s stock market matures, broader representation from underrepresented sectors like technology, agribusiness, and financial services could help stabilize the index and attract a more diverse investor base.
An independent analyst said, “Looking ahead, investors are advised to closely monitor macroeconomic trends, corporate performance, and government policies that may affect market accessibility and confidence. While the BSI presents growth opportunities, a thorough research and risk assessment remain crucial, especially given the market’s limited liquidity and the concentrated nature of its listed entities.”
“With signs of a potential recovery on the horizon, Bhutan’s stock market stands at a pivotal moment. The coming months will be critical in determining whether recent movements mark the beginning of a sustained rebound or signal further adjustments in the nation’s evolving financial landscape,” he added.
An Economist said that there is no fixed limit to the number of listed companies for maximizing economic benefits in any stock market. “However, considering our unique economic context—including its small population, landlocked geography, and reliance on specific sectors like hydropower and tourism—we need broader representation from all sectors to provide a true picture of Bhutan’s economy through the lens of stock market.”
Experts said that the following factors must be considered:
- Market Size and Liquidity: Bhutan’s stock market, managed by the Royal Securities Exchange of Bhutan (RSEB), currently has 18 listed companies with a market capitalization of around Nu 60,162 million as of March 20, 2025. Increasing the number of listed companies could enhance market liquidity and attract more investors, but this must be balanced against the economy’s capacity to support such growth.
- Economic Diversification: Bhutan’s economy is heavily reliant on hydropower and tourism. Listing more companies from underrepresented sectors (e.g., technology, agribusiness, and financial services) could diversify the economy and reduce dependence on a few sectors.
- Investor Participation: With only 100,572 shareholders as of 2023, public awareness and participation in the stock market remain low. Increasing the number of listed companies should be accompanied by efforts to educate the public on stock market investments to ensure sufficient demand.
- Global Comparisons: Bhutan’s stock market is one of the smallest globally. For context, smaller economies with more developed markets (e.g., Maldives or Laos) often have 20–50 listed companies. Given Bhutan’s size, aiming for 25–30 listed companies in the medium term could be a realistic target to enhance economic benefits, provided there are sufficient companies ready for listing and investor interest.
“However, simply increasing the number of listed companies is not enough. The quality of listed companies, regulatory frameworks, and market infrastructure must also be strengthened to ensure sustainable growth and economic benefits,” the expert added.
With approximately Nu 44,676.14 million, the financial sector has the highest representation in terms of market capitalization in the Bhutanese stock market, as per the RSEB website. It is then followed by the manufacturing sector with a market capitalization of Nu 12,603.17.
Other sectors like tourism, publishing, distribution and trading has a marketing capitalization of Nu 1,256.4 million; Nu 160 million; 1,377 million and; Nu 89.47 million respectively.
According to analysts, there are several challenges that hinder the development of Bhutan’s stock market, some of which are: Low Public Awareness and Participation; Low Market Liquidity; Limited Number of Listed Companies; Regulatory and Infrastructure Challenges and; Access to Finance.
To address these challenges and foster a more robust stock market, experts recommended enhancing Financial Literacy and Public Awareness; Encouraging More Companies to enlist; Improving Market Liquidity; Strengthening Regulatory and Market Infrastructure; Improving Access to Finance; and Leveraging Technology and Innovation.
Experts say that Bhutan’s stock market stands at a critical juncture, with the potential to drive economic growth and diversification if its challenges are addressed strategically. While there is no fixed limit to the number of listed companies for maximizing benefits, aiming for 25–30 listings in the medium term, with broader sectoral representation, could enhance liquidity, attract investors, and reflect the true diversity of Bhutan’s economy.
Tashi Namgyal from Thimphu
