Foreign investors bought shares worth Tk587.15 crore against sales of shares worth Tk263.97 crore in February
Net foreign investment at the Dhaka Stock Exchange (DSE) in February soared for the second month, as foreign investors continued injecting funds in the capital market after significant withdrawal last year.
The net foreign investment surged by 84% to Tk323 crore in February, compared to Tk175.29 crore in the previous month.
Foreign investors bought shares worth Tk587.15 crore against sales of shares worth Tk263.97 crore in February. In January, the foreigners bought shares worth Tk495.19 crore against sales of shares worth Tk319.90 crore.
Market operators said that the foreign investors went on a bargaining hunt while buying shares, after continuous fund withdrawal in 2018.
Experts said foreign investment in the country’s premier bourse remained positive for only three months—January, March, and September—of 2018 as overseas investors faced a number of issues, including: political uncertainty during election year, depreciation of the Taka against the US dollar, and woes in the country’s banking sector.
The market returned to a positive state after the December 30 general elections.
According to stakeholders, another reason for the increase in investment is that foreign investors have a tendency to invest in the capital market when share prices are high.
Prof Mohammad Musa, dean at the School of Business and Economics of United International University, told the Dhaka Tribune: “Foreign investment increased due to a favourable investment climate. They [foreign businesses] are looking for more opportunities to invest, which is why they are investing more.
"Additionally, the market was active after the national election, which dismissed their fears, and they started investing again.”
In December 2018, net foreign investment at DSE was negative, when foreigners sold shares worth Tk347.62 crore against their purchase of shares worth Tk246.09 crore—keeping the net investment of Tk101.53 crore negative.
In November 2018, foreign investors bought shares worth Tk323.84 crore, against sales of Tk346.35 crore, which amounted to a net foreign investment of Tk22.50 crore.
In October 2018, the net foreign portfolio investment was negative Tk201.68 crore, with foreign purchases of shares worth Tk282.50 crore, against sales worth Tk484.18 crore.
Foreign investment at DSE fell drastically in 2018, as compared to 2017. In 2018, net foreign investment dipped to negative Tk593.47 crore, which was positive Tk1,704.94 crore in 2017, according to DSE data.
Foreign investment in shares were to the tune of Tk4,496.24 crore, against share sales of Tk5,089.71 crore last year. But in 2017, overseas investors bought shares worth Tk6,576.29 crore, against share sales of Tk4,871.34 crore.
Net overseas investment at DSE was Tk78.43 crore in 2011, Tk792.59 crore in 2012, Tk1,942.89 crore in 2013, Tk2,619.78 crore in 2014, Tk185.50 crore in 2015, and Tk1,340.98 crore in 2016.