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Net foreign fund in stocks rebounds after five months

Investment remains negative Tk 2.69b in nine months


Babul Barman | October 02, 2018 00:00:00


Net foreign fund in stocks turned positive last month after remaining negative over the period of last five months as overseas investors were putting fresh funds to take advantage of 'lucrative' price level.

The overseas investors bought shares worth Tk 2.47 billion and sold stocks of Tk 2.12 billion, to take their net investment to Tk 0.35 billion in September, according to statistics from the Dhaka Stock Exchange (DSE).

In August, the overseas investors collected shares worth Tk 1.76 billion, but sold shares worth Tk 1.82 billion, resulting in their net position negative by Tk 57 million, the DSE data shows.

The net foreign investment in the DSE was also negative in February, April, May, June and July this year.

In nine months from January to September, the foreign investors bought shares worth Tk 36.41 billion and sold stocks worth Tk 39.10 billion, taking their net position negative Tk 2.69 billion.

Market insiders said the overseas investors started to make fresh investments in September, taking the opportunity of purchasing shares at low prices.

DSEX, the prime index of the DSE, eroded more than 876 points or 14 per cent in nine months from January to September. And the DSEX lost 232 points alone in September.

"Foreign investors are very smart -- they always invest in the capital market when the share prices are on the decline," said a local stockbroker, who deals with foreign investors.

He noted that foreign investors may continue to invest in stocks in the coming months in anticipation of steady economic growth coupled with discounted rate of many fundamental stocks.

The high GDP (Gross Domestic Product) growth, cool inflation and rising private sector credit growth lured in overseas investors, he added.

However, an analyst said that despite net foreign fund turned positive, fears over political uncertainty ahead of national election coupled with depreciation of the taka against the US dollar remains major concerns for the overseas investors.

Banks shares were the top choice of foreign investors, who also seemed interested in power and energy, non-banking financial institutions, telecom, pharmaceuticals, multinational companies and IT companies.

Also known as portfolio investment, foreign investment accounts for less than 2.0 per cent of the premier bourse's total market capitalisation, which stood at Tk 3,873 billion as of Monday.

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