Foreign fund in DSE jumps 792pc in 11 months

Net foreign investment in stocks marked a significant jump for January-November period of 2016 compared to the same period a year ago, as overseas investors were anticipating a positive market scenario.
Analysts said the favourable macroeconomic indicators coupled with stable political scenario in recent months jacked the foreign investors' confidence up to increase their positions in the Bangladesh stockmarket.
Net investment by foreign investors for January to November, 2016 stood at Tk 9.55 billion, which was Tk 1.07 billion in the same period a year ago, jumping 792 per cent over the period, according to statistics available with the Dhaka Stock Exchange (DSE).
The overseas investors bought shares worth Tk 43.76 billion, while they sold stocks of Tk 34.21 billion in the 11 months of 2016, the DSE data showed.
In 2015 for January to November, the foreign investors bought shares worth Tk 34.39 billon, while they sold stocks worth Tk 33.32 billion, taking the net position at Tk 1.06 billion.
 "Portfolio investment in our capital market is gradually increasing and the trend will continue in the coming days too as the market offers discounted rate of many fundamental stocks," said a DSE official.
Foreign fund managers see the Bangladesh stock market as one with potential among the emerging markets due to positive macroeconomic indicators and a stable political scenario, said a local stockbroker who deals with foreign investors.
"The portfolio investment marked a significant jump as the investors think that this is the right time to invest in the Bangladesh's stock market and the market is lucrative for long-term investment," he said.
Md Ashaduzaman Riadh, strategic portfolio manager of LankaBangla Securities said, "Bangladesh showed outstanding and intact performance in different macro and social indicators this year among the frontier markets, and we have been able to sell the underlying growth stories of Bangladesh".
"The foreign investors are seeing the Bangladesh outlook very positively, he said, adding that favourable macroeconomic indicators, rising income and consumption of young demography and easing political tension have increased investor confidence".
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.
Foreign investors include global investment banks like Morgan Stanley, JPMorgan, Goldman Sachs and BlackRock.
Net foreign investment in 2015 was Tk 1.86 billion, a 93 per cent increase over 2014, according to DSE data.
Portfolio investment accounts for less than 2.0 per cent of the premier bourse's total market capitalisation, which stood at Tk 3,337.98 billion as on Sunday.
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