The overall stock market of Bangladesh has remained weak this year due to nervousness in the run up to the national elections.
Annual review report of the AFC Asia Frontier Fund made the observation.
The 11th national parliamentary election in Bangladesh will take place on December 30 next.
The report was of the view that the country’s central bank also passed ‘various arbitrary measures’ impacting banks’ net interest margins which was a ‘further dampener on stock market performance.’
The banking sector has a big weight in the country’s local stock market index.
Regarding the fund’s investable position, the report said: “Bangladesh ended the year as the second biggest weight for the fund.”
The estimated 12-month price-earnings ratio stood at 12.30 by the middle of December this year though the country’s market was hit by global risk off sentiment as market return turned negative 16.90 per cent.
With average economic growth of greater than six per cent since 2010, the fund manager expresses optimism on the future return.
“We are very positive on the long-term prospects for the country as well as the companies the fund holds there,” it added.
AFC Asia Frontier Fund is a fund managed by Asia Frontier Capital Ltd. It is a pioneering fund management company based in Hong Kong and specialises in investing in high growth Asian frontier economies.
The fund currently invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Kazakhstan, Kyrgyzstan, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka, Uzbekistan, and Vietnam.