Portfolio investment on DSE slumps 78pc in April

Net portfolio investment in stocks slumped 78 per cent month-on-month in April this year, hitting eight months low, as overseas investors booked profit on large-cap stocks.
Local stockbrokers who deals with foreign investors, told the FE that the overseas investors increased their share sales in April as the rising share prices prompted them to realise profit while some followed 'wait-and-see' strategy.
During the month of April, DSEX, the prime index of the Dhaka Stock Exchange (DSE), registered a cumulative loss of 216 points or 3.79 per cent after gaining nearly 684 points in January-March period of 2017.
Foreign investors bought shares worth Tk 4.69 billion and sold stocks of Tk 3.98 billion to take their net investment to Tk 700  million in April, according to statistics available from the Dhaka Stock Exchange (DSE).
In March, net investment by overseas investors was Tk 3.30 billion, as they bought shares worth Tk 7.11 billion and sold stocks worth Tk 3.81 billion, the DSE data shows.
The April's net portfolio investment in DSE was also the lowest in the eight months since August 2016. In August, 2016, net overseas investment was negative Tk 37.60 million as they bought shares worth Tk 3.69 billion and sold stocks worth Tk 3.73 billion.
"Net foreign investment in the premier bourse slowed down in April as foreign investors opted to book quick-gain, taking the advantage of rising share prices," said a local stockbroker who deals with foreign investors, seeking anonymity.
"As DSEX rose about 684 points in January-March period of 2017, the overseas investors realised profit from their holdings," he said.
However, he expressed optimism that the foreign fund managers still see the Bangladesh stockmarket as one with potential among the emerging markets due to positive macroeconomic indicators and a stable political scenario.
Fundamentally strong issues like multinational companies, banks, non-bank financial institutions, power and energy, pharmaceuticals, telecoms and IT are foreign investor preferred stocks.
In 2016, net foreign investment at DSE was Tk 13.40 billion, which was 1.85 billion in 2015.
Also known as portfolio investment, foreign investment accounts for about 2.0 per cent of the DSE's total market capitalisation, which stood at Tk 3,746 billion as of Sunday.
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