The foreign investment in the Dhaka Stock Exchange (DSE) marked a significant jump in June compared to May 2014 as overseas investors injected fresh funds into fundamentally strong stocks.
Easing of political tension and favourable macro economic indicators attracted foreign investors to take position in Bangladesh stocks, especially multinational companies in recent months, said local stockbrokers, who deal with foreign investors.
Net investment by foreign investors in June stood at Tk 3.62 billion, which was Tk 1.29 billion in May, registering an increase of 180 per cent over the month, according to statistics from Dhaka Stock Exchange (DSE).
Foreign investors bought shares worth Tk 4.82 billion, while they sold shares worth Tk 1.20 billion in June, taking their net investments Tk 3.62 billion. It was also the second highest net investments in DSE since April, this year. Â
In May, portfolio investors bought shares worth Tk 3.53 billon, while they sold shares worth Tk 2.24 billion.
The foreign investors were on a buying spree throughout the June.
"Portfolio investors are injecting fresh funds as the investors think that this is the right time to invest in the Bangladesh's stock market as the market is lucrative for long-term investments," Akther H Sannamat, managing director of Union Capital said.
"The foreign investors are seeing the Bangladesh outlook very positively," he said, adding that favourable macroeconomic indicators and easing of political tension increased investor confidence.
"Foreign investors showed interest on Bangladesh capital market due to favourable macro economic indicators and easing of political tension in recent months," said Md Ashaduzaman Riadh, strategic portfolio manager of LankaBangla Securities.
The political stability will also help revive corporate profitability of listed companies and liquidity situation in the market, he said.
Foreign investment, also known as portfolio investment, accounts for around 2 per cent of DSE's total market capitalisation, which stood at Tk 2,928.25 billion as on Wednesday.
Multinational companies stocks were the foreign investors' preferred sector, but power and energy, pharmaceuticals, telecoms and IT also caught their attention.
In 2013, portfolio investors bought shares worth Tk 26.52 billion and sold shares worth Tk 7.09 billion, taking the net investment of Tk 19.42 billion, according to the DSE data.
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