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Foreign investors at DSE withdraw Tk941cr in 9 months

  • Published at 10:16 pm November 30th, 2019
DSE Tower
Photo of DSE tower Collected

Their investment at Dhaka Stock Exchange (DSE) fell for the ninth consecutive month in November

Foreign investors at the country’s premier bourse withdrew record Tk941 crore in the last nine months (March-November) as they went for large scale sale of shares due to protracted confidence crisis in the stock market.

Their investment at Dhaka Stock Exchange (DSE) fell for the ninth consecutive month in November.

According to the DSE data, in November, the foreign investors sold shares worth Tk321.32 crore against their purchase worth Tk222.44 crore. 

The net foreign investment dipped to Tk98.88 crore negative in November after Tk96.93 crore negative in October. It was Tk60 crore negative in September and  Tk102 in August.

The foreign investors withdrew around Tk941crore in the last nine months from the capital market.

Stock market experts and insiders said that the foreign investors continued pulling funds out of the DSE due mainly to prolonged bearish trend at the market, causing the key index to go down since January this year.

The market capitalization at DSE dropped about Tk65,000 crore in the last nine months. The prime index, DSEX, lost 1,200 points from its highest hit of 5,950 points, since January 24 this year.

Talking to Dhaka Tribune, requesting anonymity, a stock broker said that lack of confidence of investors in the market resulted in the continued share sales by the local and foreign investors.

Depreciation of taka against the US dollar may have dampened the mood of foreign investors in the last few months, as it decreased their profitability, market operators said further.

Former adviser to a caretaker government AB Mirza Azizul Islam said that the overseas investors could not regain confidence as the local investors were not showing confidence in the capital market.

Taking to Dhaka Tribune, stock market analyst and honorary professor at Dhaka University’s economics department Abu Ahmed said that most of the listed companies were suffering from lack of good governance. Companies’ sponsor directors often traded shares anonymously, violating securities laws, he mentioned.

“They tend to make false financial reports. In this case, foreign investors will not invest in capital market,” he said.

“Soaring non-performing loans coupled with falling foreign portfolio investment triggered further sell-offs,” he explained. 

In October, the foreign investors sold shares worth Tk328.92 crore against their purchase worth Tk231.99 crore.

In September, they sold shares worth Tk318 crore against their purchase worth Tk257 crore. In August, they bought shares worth Tk176 crore against their sales worth Tk279 crore.

In July, they bought shares worth Tk309 crore against their sales worth Tk474 crore. In June, the foreign investors sold shares worth Tk305.46 crore and bought shares worth Tk294.94 crore.

The net foreign investment position was Tk65 crore negative in May, Tk154 crore negative in April and Tk123 crore negative in March.