Portfolio investment jumps five-fold in FY 17

Net portfolio investment in stocks jumped over five-fold in the fiscal year (FY) 2016-17 compared to the previous year as overseas investors, anticipating positive market scenario, parked more funds in stocks.
Analysts said positive macroeconomic indicators coupled with declining interest rate, stable exchange rate and political calm boosted the foreign investors' confidence to inject fresh funds in stocks.
Overseas investors purchased shares worth Tk 61.39 billion and sold shares worth Tk 38.70 billion to take their net investment to Tk 22.69 billion in the just-concluded FY 2016-17, according to available Dhaka Stock Exchange (DSE) data.
In FY 2015-16, the net position by foreign investors was only Tk 4.52 billion as they bought shares worth Tk 42.67 billion and sold shares worth Tk 38.16 billion, the DSE data showed.
"Fresh funds have been injected into the secondary market as many overseas fund managers see the Bangladesh stockmarket as an emerging one in the region due to positive macroeconomic indicators and a stable political scenario," said a local stockbroker who deals with foreign investors.
He, however, noted this trend may continue in the coming days too as market offers discounted rate of many fundamental stocks.
Meanwhile, the DSEX, the prime index of the DSE, surged 1149 points - thereby generating a rise of 25 per cent in the FY 2016-17.
Market liquidity also saw a substantial boost at the end of the year, clocking up Tk 7.55 billion in daily average turnover in FY 2016-17 - thereby soaring 74 per cent over the previous FY.
The overseas investors' fresh and increasing position in the listed firms also showed their growing trust in the market, the stockbroker said.
Foreign investors were found to have the highest holding in Olympic Industries with a 42.80 per cent stake, up from 39 per cent a year ago, closely followed by Brac Bank with 42.78 per cent stake.
The overseas investors' stakes in Beximco Pharma were 41.18 per cent, followed by Delta Brac Housing Finance with 37.71 per cent, Bangladesh Steel Re-rolling Mills 30.58 per cent and Square Pharma 15.39 per cent.
Banks were the foreign investors' preferred sector, followed by non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecom and IT.
Also known as portfolio investment, foreign investment in total accounts for nearly 2.0 per cent of the premier bourse's total market capitalisation that stood at Tk 3801 billion at the close of trade on June 29, the last trading day of the fiscal year 2016-17.
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