The foreign portfolio investment at the Dhaka Stock Exchange (DSE) registered 170% rise in October as compared to the previous month, breaking the declining trend of last three months.
It rose to Tk2,283m in October from Tk846m in September, according to a DSE release on Sunday. Foreign investors bought shares worth Tk2,669m and sold stocks worth Tk3,850m last month.
“Foreign investor took position on stocks when they saw the local investors are selling on apprehension of a fall,” said MA Hafiz, president of Bangladesh Merchant Bankers Association.
He said the foreign investors might have considered the political crisis will come to an end as the tenure of the government has expired. “It prompted them to put funds on equities.”
Currently, the market is more or less at the bottom level and it would get a momentum, which inspired foreign investors to invest in the country’s stock market, said Akter Hossain Sannamat, managing director of Union Capital. He said political uncertainty would stop after a certain time and the market would be stable.
Prices of some stocks came down at a level as desired by some investors and that is why they got involved with huge investment, he added.
Meanwhile, a DSE director told the Dhaka Tribune that the process of demutualisation of the stock exchanges might have inspired the investors to buy stocks as the market would then be more transparent and accountable.
“Foreign investors want security of their funds. It would be possible as the stock exchanges are in the process of demutualisation,” he added.