Net foreign investment in the Dhaka Stock Exchange (DSE) fell 48 per cent in the just concluded fiscal year compared to previous fiscal as foreign fund managers were in selling mood amid volatile market situation.
In the fiscal year (FY) 2014-15, overseas investors bought shares worth above Tk 41.45 billion and sold shares worth above Tk 28.45 billion, to take their net investment for the fiscal year to above Tk 12.99 billion, according to statistics from the DSE.
In the FY 2013-14, overseas investors bought shares worth above Tk 37.91 billion and sold shares worth above Tk 12.97 billion to take their net investment to above Tk 24.93 billion, the DSE data showed.
However, total turnover (buy and sell) from overseas investors increased by 37.40 per cent in the last fiscal year compared to previous fiscal as total turnover was above Tk 69.91 billion in FY 2014-15 while it was above Tk 50.89 billion in FY 2013-14.
"Net foreign investment in DSE fell last fiscal year as the bourse witnessed sell pressure from foreign fund managers throughout the fiscal year 2014-15 amid volatile market situation," said a leading stockbroker who deals with portfolio investment.
He said the foreign investors naturally want to see a peaceful environment for the safe return of their investment. "As the country's political situation deteriorated in early 2015, the global fund managers preferred to sell shares to book profit," he said.
Foreign investment was slow in January, February, March and April as the market experienced a number of downswings and the investors adopted a 'wait-and-see' policy then, he said.
The secondary market witnessed see-saw movement throughout the last fiscal. However, DSEX, the prime index of the DSE, rose only 103 points or 2.30 per cent in the last fiscal over the previous fiscal.
Mohammad A Hafiz, former President of Bangladesh Merchant Bankers Association (BMBA) stressed on political stability, improvement in power and infrastructure, macroeconomic equilibrium and foreign investors-friendly policies to attract more portfolio investment into the stocks.
Also known as portfolio investment, foreign investments accounted for more than 1 per cent of DSE's total market capitalisation, which was Tk 3,247.30 billion at the end of FY 2014-15.
Foreign investors preferred stocks under banks, non-bank financial institutions, power and energy, pharmaceuticals, telecoms and IT sectors, an investment banker said.
They also focused on some multinational stocks that announced healthy dividends and generated good profits, he added.
However, in the calendar year 2014, foreign investors bought shares worth Tk 44.06 billion and sold shares worth Tk 17.98 billion, to take their net investment to Tk 26.08 billion, which was a record high, according to DSE statistics.
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