Net foreign investment at DSE negative in November

The net foreign trading reached Tk492 crore negative in the last 11 months, said the DSE data

Foreign investment at the Dhaka Stock Exchange (DSE) was negative in November. 

Overseas investors were assessing risk factors surrounding the political developments in the run up to the December 30 national election, market operators said.

The net foreign trading at DSE remained negative, similar to October as the foreigners sold shares worth Tk346.35 crore against their buying of shares worth Tk323.84 crore, keeping the net investment of Tk22.51 crore negative.

In October, the net foreign portfolio investment was Tk201.68 crore negative as the foreigners bought shares worth Tk282.50 crore against their sales of shares worth Tk484.18 crore.

The net foreign trading reached Tk492 crore negative in the last 11 months, said the DSE data.

Financial market experts said that a depreciation of the Bangladeshi taka against the US dollar was another significant reason for withdrawal of foreign funds.

The investors may move their funds to safer markets where they could earn more profits at lesser risk.

In addition, overseas investors may move to sell off shares at a higher price than when they bought the shares and kept awaiting when they feel the price is low again for them to enter.

Regarding the reason for net negative foreign investment in the previous months, former president of Dhaka Stock Exchange Brokers Association (DBA) Mostak Ahmed Sadeq said the depreciation of the taka against the US dollar had dampened the mood of foreign investors.

Furthermore, political uncertainty ahead of the upcoming national election had also made investors adopt a “wait and see approach,” he added.

The net overseas investment turned positive at Tk35.16 crore in September after five consecutive months of negative trends.

It was Tk24.69 crore negative in April, Tk282.32 crore negative in May, Tk206.68 crore negative in June, Tk32.7 crore negative in July and Tk5.75 crore negative in August.

The rising political uncertainties over the months kept the investors at bay, market operators said.

The DSE’s key index, DSEX, lost 2.87 points in November to close at 5,281.25 points on November 29 as investors hesitated to keep their investment in the market for long periods before the national election. 

The total foreign turnover on the bourse also dropped to Tk670.19 crore in November from that of Tk766 crore in the previous month.
Source: https://www.dhakatribune.com

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