Net foreign investment in prime bourse remained negative for the nine straight months in November as the overseas investors continued to pull out their fund amid depressed market outlook.
The foreign investors withdrew record Tk 857 billion in last nine months (March-November) this year from the country's premier bourse due mainly to lack of confidence in the country's capital market, brokers said.
Market analysts said the foreign investors were selling off their shares due to the lack of confidence, depreciation of local currency against the US dollar and concern over the country's financial sector.
A crisis of confidence plagued the investors for long and the continuous fall of stock prices just added woes to their concern, said an analyst.
He noted that the financial market volatility, poor regulatory control, approval of weak IPOs (initial public offerings) also dented foreign investors confidence in the country's capital market.
In November, the overseas investors bought shares worth Tk 2.22 billion while they sold Tk 3.21 billion worth of shares, taking the net position of Tk 989 million in negative, according to the Dhaka Stock Exchange data.
In October, the net foreign investment was negative by Tk 970 million as they sold shares worth Tk 3.29 billion against their purchase of shares worth Tk 2.32 billion.
A leading broker, who deals with foreign investors, said a harsh decision on GP, the largest listed company of the DSE, by the telecom regulator ultimately affected the whole stock market.
The telecom regulator's move to declare GP a significant market power (SMP) in February this year to erode the confidence of foreign investors, he added.
The depreciation of local currency against the US dollar was another reason for withdrawal of funds by the foreign investors, he mentioned.
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