Net foreign investment in DSE hits 3-month low

Babul Barman | Published: April 02, 2014 00:00:00 | Updated: November 30, 2024 06:01:00

Net foreign investment into the Dhaka Stock Exchange (DSE) dropped to a three-month low in March as foreign investors adopted a 'go-slow' policy amid cautious stance.
Month-on-month net foreign investment dropped 20 per cent in March as foreign investors bought shares worth Tk 2.05 billion and sold stocks worth Tk 1.08 billion, taking their net investment to Tk 1.21 billion, according to data from the Dhaka Stock Exchange (DSE).
It was also three month lowest net foreign investments in DSE since December last year. In December 2013, net foreign investment was Tk 649.50 million.
In February, foreign investors bought shares worth Tk 3.27 billion, while they sold stocks worth Tk 2.06 billion in February 2014, taking their net investment for the month to Tk 1.21 billion, the DSE data showed.
"Net foreign investment in DSE fell as overseas investors' followed 'wait-and-see' policy like local investors as the Bangladesh Bank (BB) directed banks to submit daily capital market investment reports in weekly basis," Akter H Sannamat, managing director of Union Capital told the FE.
Following the directive, the foreign investors reduced their investment apprehending further fall in the market, said Mr Sannamat, also vice president of Bangladesh Merchant Bankers Association (BMBA).
However, he said that the foreign investors still have enough interest in Bangladesh markets. The recent demutualisation of the stock exchanges and signs of political stability increased their confidence.
An analyst said, "Lack of coordination between securities regulator and Bangladesh Bank shocked investors badly in recent days". He stressed for better coordination of market's stakeholders.
Also known as portfolio investment, foreign investment accounts for around 1.0 per cent of DSE's total market capitalisation which was Tk 2,858.50 billion on Tuesday.
Banks were initially the foreign investors' preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also caught their attention.
In 2013, foreign investors bought shares worth Tk 26.52 billion and sold stocks worth Tk 7.09 billion, taking their net investment for the year to Tk 19.43 billion.