DSE\\\'s net portfolio investment becomes negative in March

Net foreign investment or portfolio investment in the Dhaka Stock Exchange (DSE) entered a negative territory in March as the foreign fund managers were in selling spree following continued political crisis.  
Foreign investors bought shares worth Tk 3.19 billion, but sold shares worth Tk 3.51 billion. As higher sell pushed net position in negative of Tk 322.95 million in March, shows statistics available with the Dhaka Stock Exchange (DSE).
In February, overseas investors bought shares worth Tk 2.50 billion and sold shares worth Tk 2.19 billion taking net investment position to Tk 317.40 million, the DSE data showed.
However, total turnover (buy and sell) for foreign investment increased by 42.76 per cent in March compared to February. Total turnover in February was Tk 4.70 billion while it stood at Tk 6.71 billion in March.
Analysts said although net position dropped sharply and entered a negative territory, they played a role on the both side of fence.
 "The net foreign investment in DSE entered in negative zone in March as foreign fund managers were in selling spree amid prolonged political unrest," said a leading stock broker who deals with portfolio investment.
They are also keenly observing the country's political situation as political unrest eat-up companies' profitability, resulting lower dividend, he said.
Stock indices also took a big hit in March. DSEX, the benchmark index of the premier bourse, plunged 232.73 points or 4.88 per cent in March compared to February.
The foreign investors went for selling spree as political situation remained volatile said Akter H Sannamat, managing director of Union Capital.
The foreign investors 'watching' the market movement and want a peaceful solution of political uncertainty, he said.
He stressed political stability, improvement in power and infrastructure, macroeconomic equilibrium and foreign investors-friendly policies to attract more portfolio investment into the stocks.
Also known as portfolio investment, foreign investments accounts for around 2 per cent of DSE's total market capitalisation, which is the lowest among South Asian countries.
Foreign investors' preferred sectors are: banks, non-bank financial institutions, power and energy, pharmaceuticals, telecoms and IT, an investment banker said.
They also focused on some multinational companies stocks that announced healthy dividends and generated good profits, he added.
In 2014, foreign investors bought shares worth Tk 44.06 billion and sold shares worth Tk 17.98 billion to take their net investment to Tk 26.08 billion, which was a record high, according to DSE statistics.
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