Foreign investment at capital market falling for 6 months
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The net foreign investment at Dhaka Stock Exchange (DSE) remained negative for the six consecutive months till August as the foreign investors, muddled by falling trend in the market and haphazard environment in the financial market, kept selling shares amid volatility at the market during the period.
In August, the foreign investors sold shares worth Tk279 crore against their purchase of shares worth Tk176 crore. In July, they bought shares worth Tk309 crore against their sales worth Tk474 crore.
The net foreign investment dipped to Tk102 crore negative in August after Tk164 crore negative in July.
The foreign investors withdrew around Tk619 crore in the six months (March-August) from the capital market.
Market operators said that the foreign investment turned negative as a section of overseas investors might have gone for profit booking share sales after notable investment in the previous six months.
Market operators have said that the volatility in the financial sector as well as in the capital market could be a major reason for the share sales in August. The volatility in the capital market began at the end of January and it did not improve since.
They also think that depreciation of taka against the US dollar may have dampened the mood of foreign investors in the last few months, as it decreased their profitability.
In June, the foreign investors sold shares worth Tk305.46 crore and bought shares worth Tk294.94 crore.
The net foreign investment position was Tk65 crore negative in May, Tk154 crore negative in April and Tk123 crore negative in March.
According to the premier bourse data, net foreign investment in DSE fell to negative Tk183.70 crore in fiscal year 2018-19, lowest in eight years since 2011-12 FY. In 2017-18, the net foreign investment was Tk71.76 crore positive.
The FY19 figure was the lowest since the market crash in FY 2010-11 when the net foreign investment was Tk404.59 crore negative.
Foreigners bought shares worth Tk4,017.81 crore against their share sales of Tk4,201.51 crore last year (FY19). In 2017-18, overseas investors had bought shares worth Tk5,900.47crore against their sales worth Tk5,828.70 crore.
Experts on the capital market said foreign investment portfolio played a vital role in any capital market.
Managing director of IDLC Investments Limited Md Moniruzzaman told Dhaka Tribune that in 2019 some investors might still be waiting for currency depreciation before increasing their market investment in Bangladesh.
Professor of United International University and stock market analyst Mohammad Musa says volatility in the country’s financial sector also kept the investors on edge from the beginning of the year.
Source: https://www.dhakatribune.com
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