Portfolio investment in stocks up 28pc in Feb

Net foreign investment in stocks marked a 28 per cent rise month-on-month in February this year as portfolio investors invested more funds in Bangladesh capital market, anticipating positive market scenario.
An analyst said the favourable macroeconomic indicators, including declining interest rate coupled with political stability jacked foreign investors' confidence up to inject fresh funds in the securities.
Foreign investors bought shares worth Tk 4.35 billion and sold stocks of Tk 1.97 billion to take their net investment to Tk 2.38 billion in February, according to statistics from the Dhaka Stock Exchange (DSE).
In January, net investment by overseas investors was Tk 1.86 billion, as they bought shares worth Tk 6.11 billion and sold stocks worth Tk 4.25 billion.
"Foreign investment in our capital market is gradually increasing and the trend will may continue in the coming days too as the market offers discounted rate of many fundamental stocks," said a DSE official.
A local stockbroker who deals with foreign investors, said, "Foreign fund managers see the Bangladesh stockmarket as one with potential among the emerging markets due to positive macroeconomic indicators and a stable political scenario".
"Lucrative dividends declared by the listed multinational companies also encouraged the investors to park money in the securities," he said.
Some multinational companies already declared hefty dividend for the year ended on December 31, 2016. BATBC declared 600 per cent cash dividend, followed by GlaxoSmithKline 500 per cent, Linde BD 310 per cent and Heidelberg Cement 300 per cent.
"Sustained revival of the foreign investors' interest was backed by the rising corporate profitability and increasing consumption level of Bangladesh," said Md Ashaduzaman Riadh, strategic portfolio manager of LankaBangla Securities.
Mr Riadh noted that declining interest rate, overall market liquidity and company's earnings condition is still very favourable for foreign equity investors.
He said among the frontier markets, Bangladesh did better in terms of declining interest rate, strong currency and GDP growth.
Mr Riadh expects large-cap companies with attractive valuation on which foreigners have high interest will strongly come back with top and  bottom line growth in 2017 and Bangladesh market is expected to get higher weight from foreign investors.
During the month of February, DSEX, the prime index of the DSE, registered a cumulative gain of 144 points.
The year-on-year in February, net foreign investments in stocks also soared 151 per cent in February, 2017 compared to the same month in 2016.
In February 2016, the overseas investors bought shares worth Tk 3.71 billion and sold shares worth Tk 2.76 billion to take their net investments to Tk 950 million.  
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.
In 2016, net foreign investment at DSE stood at Tk 13.40 billion, which was 1.85 billion in 2015.
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 3,727 billion as of Monday.
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