Net foreign investment in stocks marked a significant jump in the first nine months of 2016 compared to the same period a year ago as foreign fund managers considered the market lucrative for long-term investment.
Analysts said the favourable macroeconomic indicators coupled with easing of political tension in recent months increased the foreign investors' confidence to pour fresh fund into stocks.
Net investment by foreign investors for January to September, 2016 stood at Tk 5.87 billion, which was Tk 818 million in 2015, jumping 617 per cent over the period, according to statistics available with the Dhaka Stock Exchange (DSE).
The overseas investors bought shares worth Tk 34.92 billion, while they sold stocks of Tk 29.05 billion in nine months of 2016, the DSE data showed.
In 2015 for January to September, the foreign investors bought shares worth Tk 27.75 billon, while they sold shares worth Tk 26.93 billion, taking the net position at Tk 818 million.
"Foreign investment in our stockmarket is gradually increasing and the trend will continue in the coming days too as the market offers discounted rate of many fundamental stocks," said a DSE official.
Foreign fund managers see the Bangladesh stock market as one with potential among the emerging markets, said a local stockbroker who deals with foreign investors.
"Foreign investors injected fresh funds amid positive speculations as the market performed comparatively better in recent months," he opined out.
"The foreign investment marked a significant jump 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," he said.
He said they usually prefer long-term investment in the companies with good fundamentals at discount rate.
Md Ashaduzaman Riadh, strategic portfolio manager of LankaBangla Securities said, "Bangladesh showed outstanding and intact performance in different macro and social indicators this year among the frontier markets, and we have been able to sell the underlying growth stories of Bangladesh".
"The foreign investors are seeing the Bangladesh outlook very positively, he said, adding that favourable macroeconomic indicators, rising income and consumption of young demography and easing political tension have increased investor confidence".
Banks shares were the top choice of foreign investors, who also seemed interested in power and energy, non-banking financial institutions, telecom, pharmaceuticals, multinational companies and IT.
Foreign investors include global investment banks like Morgan Stanley, JPMorgan, Goldman Sachs and BlackRock.
Net foreign investment in 2015 was Tk 1.86 billion, a 93 per cent increase over 2014, according to DSE data.
Also known as portfolio investment, foreign investment accounts for less than 2.0 per cent of the premier bourse's total market capitalisation, which stood at Tk 3,280.25 billion as on Sunday.
© 2024 - All Rights with The Financial Express
