Net foreign investment at DSE positive in January

After three consecutive months of net negative foreign investment, the Dhaka Stock Exchange (DSE) returned to positive territory in January 2019.

In the recently concluded month, foreign investors bought shares worth Tk495.19 crore against sales of Tk319.90 crore. This amounts to a net foreign investment of Tk175.29 crore in the first month of 2019.

The market was positive after the December 30 general elections.

Another reason for the increase in investment was that foreign investors have a tendency to invest in the capital market when share prices are high, stakeholders said. 

Professor Mohammad Musa, Dean at the School of Business and Economics of United International University, told the Dhaka Tribune: “Foreign investment increased due to a favourable investment climate.  They are looking for more opportunities to invest, which is why they are investing more. Additionally, the market was active after the national election. That is why their fears were dismissed and so they are investing.”

To increase international acceptability of the DSE, Dhaka Stock Exchange Brokers Association (DBA) President, Shakil Rizvi, told the Dhaka Tribune: “We will try to help the bourses bring investment from different foreign organizations. Many Chinese fund managers are positive about Bangladesh's overall economy and its capital market.”

In December 2018, net foreign investment at DSE was negative. In that month, foreigners sold shares worth Tk347.62 crore against their buying of shares worth Tk246.09 crore, keeping the net investment of Tk101.53 crore negative.

In November, foreign investors bought shares worth Tk323.84 crore, against sales of Tk346.35 crore. This amounts to net foreign investment of Tk22.50 crore.

In October, the net foreign portfolio investment was negative Tk201.68 crore, with foreign purchases worth Tk282.50 crore against sales of shares worth Tk484.18 crore.

Foreign investment at DSE fell drastically in 2018, as compared to 2017. In 2018, net foreign investment dipped to negative Tk593.47 crore, which was positive Tk1,704.94 crore in 2017, according to data from the premier bourse.

Foreign ivestments in shares were to the tune of Tk4,496.24 crore, against share sales of Tk5,089.71 crore last year. But in 2017, overseas investors bought shares worth Tk6,576.29 crore, against share sales of Tk4,871.34 crore.

According to the premier bourse, net overseas investment at DSE was Tk78.43 crore in 2011, Tk792.59 crore in 2012, Tk1,942.89 crore in 2013, Tk2,619.78 crore in 2014, Tk185.50 crore in 2015, and Tk1,340.98 crore in 2016.

Experts said foreign investment in the country’s premier bourse remained positive for only three months (January, March and September) of 2018 as overseas investors faced a number of issues, including political uncertainties during election year, depreciation of the Taka against the US dollar, and woes in the country’s banking sector.
Source: https://www.dhakatribune.com

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