Foreign investors withdraw funds at DSE for 3rd month
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The net foreign investment at Dhaka Stock Exchange remained negative for the third consecutive month in May as the foreign investors, discouraged by the continuous falling trend in stock prices at the market and woes in the country’s financial market, kept selling shares.
The overseas investors withdrew funds worth Tk 343 crore in last three months. The net foreign investment dipped to Tk 65.16 crore negative in May after Tk 154 crore negative in April. The net position was Tk 123.70 crore negative in March.
In May, the foreign investors sold shares worth Tk 384.97 crore and bought shares worth Tk 319.81 crore. In April, the overseas investors sold shares worth Tk 411 crore against their purchase of shares worth Tk 257 crore.
Before the three months of negative mark, the net foreign investment was Tk 323 crore positive in February and Tk 175 crore positive in January. The capital market remained volatile for the fourth consecutive month with poor participation of investors.
The media continuously exposed irregularities and loopholes in the capital market, causing investors lose confidence in the market, market operators said. They said the regulators had taken a number of initiatives to revive the trust and confidence of investors, but the moves proved futile that might puzzle the foreigners.
They said the dearth of liquidity in the financial sector affected the market mostly and the crisis was yet to be over. The financial sector remained volatile with a host of reasons including liquidity crisis, rising interest rate, lack of governance, and pressure of foreign currency.
The banks account for more than 15 per cent of the total market capitalisation of DSE. Therefore, any stress on the banking sector puts adverse effect on the stock market. The market fell in most of the sessions in May, but jumped in a couple of sessions that helped the index finish positive in the month.
The key DSE index, DSEX, gained 174.90 points in May to close at 5,377.74 points on May 30 as the regulators took several measures to resuscitate the market that had suffered a downward trend in recent months. The DSEX dipped to 5,196 points on May 15 but rebounded slowly afterwards and witnessed a 75-points jump on May 28.
Bangladesh Bank provided Tk 856 crore for the small-scale investors affected by the recent plunge and raised banks’ investment limit in the capital market. The BSEC had met with the stakeholders and decided to bring amendments to a number of its rules to prevent fraudulent activities at the market.
The total foreign turnover on DSE increased to Tk 704.78 crore in May from that of Tk 668 crore in the previous month. The net foreign investment was Tk 593.47 crore negative in 2018 with nine months of decline on political uncertainties surrounding the December 30 national elections. After the elections, the foreign investors had moved to buy shares with an expectation that the market would turn around.
The polls-centric political uncertainties eased after the national elections, market operators said. Before 2018, the net overseas investment at the bourse was Tk 676.58 crore negative in the year of market crash (2010).
Source: http://www.newagebd.net
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