Foreign investment on equities in the Dhaka Stock Exchange (DSE) recorded new high in April this year as compared to the last couple of years.
Net investment by foreign investors in the last month stood at Tk572 crore, a jump of almost 500% over the previous month, according to the DSE.
Lower valuation level of equities, future corporate earnings growth projections and stable currency rate are among the reasons for attracting foreign portfolio investment, analysts said yesterday.
Foreign investors bought shares worth Tk876 crore and sold stocks worth Tk304 crore last month, DSE data showed.
However, foreign investment in the stock market makes up only 1% of the total DSE investment, which is lowest in the South Asia region.
“The market is now under declining trend, making prices of many scrips undervalued. Foreign fund managers took position afresh,” said an analyst at a leading brokerage firm.
The figures for net portfolio investment may rise further in coming days as the market is best for the foreign investors because of its lower prices, he said.
“Stable local currency against the greenback and substantial reserve in the central bank has given impetus in their confidence.”
Financials were the foreign investors’ preferred sector, but power and energy, pharmaceuticals, multinationals, telecoms and IT also received their attention.
Managing Director of Union Capital Akter H Sannamat said currently the market is more or less at the bottom level and it would get a momentum, which encouraged foreign investors to inject funds in the stock market. A DSE director said demutualisation of the stock exchanges might also have inspired the investors to bet on stocks as it ensures more transparency and accountability.