Foreign net investment jumps 328pc in January on DSE

Babul Barman | Published: February 04, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

Foreign net investments in the Dhaka bourse increased 328 cent in January 2014, compared to a month ago, as foreign fund mangers now consider the market lucrative for long-term investment due to low prices of fundamentally strong stocks.
Foreign investors bought shares worth Tk 4.03 billion, while they sold stocks worth Tk 1.24 billion in January 2014, to take their net investment for the month to Tk 2.78 billion, according to statistic from the Dhaka Stock Exchange (DSE).
It is also the eight months highest net investments in DSE since June last year. In June, 2013, net investment by foreign investors was Tk 3.36 billion.
In December, 2013, net foreign investments was Tk 649.46 million as foreign investors bought shares worth Tk 1.12 billon and sold shares worth Tk 478.49 million, the DSE data showed.
"Foreign investors are injecting fresh funds amid positive speculations, as the investors think that this is the right time to invest in the Bangladesh's stock market and the market is lucrative for long-term investments," Akther H Sannamat, managing director of Union Capital told the FE.
"Recent improvements in market situation seem to heighten investors' confidence and they are more active in taking positions," he said.
The stable current political situation and no tough political programme in near future encouraged the investors to take position, he added.
However, he stressed long-term political stability, improvement in power and infrastructure, macroeconomic equilibrium to attract more investment into the country.
"Foreign fund managers have increased allocation to the frontier markets in 2013 to take the advantage of favorable macro indicators and low correlation of those markets with USA, Europe and emerging markets where alpha generation has become more difficult during prolonged anaemic growth," Md Ashaduzaman Riadh, Manager of LankaBangla Securities told The FE.
"Bangladesh has showed outstanding and intact performance in different macro and social indicators in last year among the frontier markets, and we have been able to sell the underlying growth stories of Bangladesh," he said.
Uncertainty of election was a crucial risk factor and it is now over. Perceived political stability in coming months will help revive corporate profitability of listed companies and liquidity situation in market, he said.
"Foreigners started taking positions on subsequent changes in business cycle in Bangladesh from the beginning of 2014," he added. Â
Also known as portfolio investment, foreign investment accounts for less than 1.0 per cent of DSE's total market capitalisation worth Tk 2,901.26 billion.