The volatility in the capital market began at the end of January
Net foreign investment at Dhaka Stock Exchange (DSE) turned negative in March after two months of positive trend as the foreign investors went for selling shares over caution on volatility in the banking sector and capital market.
The net foreign investment dipped to Tk123 crore negative in March after injecting Tk498 crore in the previous two months. Net investment was Tk323 crore in February and Tk 175 crore in January.
In March, the foreign investors sold shares worth Tk498 crore against their purchase of shares worth Tk375 crore. In February, they bought shares worth Tk587.15 crore against their sales worth Tk263.97 crore.
Market operators said that the foreign investment turned negative as a section of overseas investors might went for profit booking share sales after notable investment in the previous two months.
Market operators said that the volatility in the financial sector as well as in the capital market could be a major reason for the share sales in March.
The volatility in the capital market began at the end of January and it did not improve yet.
Banks’ liquidity dearth that was eventually pushing the interest rate up played the key role behind the sluggish environment in the capital market, they said.
The investors, puzzled by the unusual behavior in the market, went on jittery share sales.
The key DSE index, DSEX, lost 219.82 points in the month to close at 5,491.90 points on March 31.
Average daily turnover at DSE also dropped to around Tk430 crore compared with that of Tk765 crore in the previous month.
The sudden gloomy environment at the market instigated the foreigners to withdraw funds from the capital market.
The total foreign turnover at DSE increased to Tk873 crore in March from Tk851 crore in the previous month.