Foreign funds in stocks increase 202 per cent in 9 months

| Updated: October 24, 2017 02:40:47

Representational photo: FE Representational photo: FE

Net foreign investments in stocks jumped 202 per cent year-on-year in the first nine months of 2017 as overseas investors poured more funds into the Bangladesh stock market.

Positive macroeconomic indicators and a stable political scenario boosted the foreign investors' confidence to increase their positions in the Bangladesh capital market, said an analyst.

Foreign investors bought shares worth Tk 51.01 billion and sold shares worth Tk 33.26 billion to take their net investment to Tk 17.75 billion for the January-September period of 2017, according to data from the Dhaka Stock Exchange (DSE).

Between January and September 2016, foreign investors bought shares worth Tk 34.92 billon and sold stocks worth Tk 29.04 billion to take their net investment to Tk 5.88 billion, the DSE data shows.

DSE portfolio investment also soared 450 per cent in September on a month-on-month basis as they bought shares worth Tk 5.61 billion and sold shares of Tk 3.86 billion to take their net investment to Tk 1.75 billion, according to DSE statistics.

Net investment by foreigners in August 2017 was only Tk 320 million.

An analyst said favourable macroeconomic indicators coupled with political stability increased the foreign investors' confidence to take positions in securities in the Bangladesh stock market.

"Declining interest rate, resilient export growth, strong currency, rising consumption and easing political tension have increased the foreign appetite for Bangladesh equities," said a leading stockbroker who deals with foreign investment.

Meanwhile, DSEX, the benchmark index of the premier bourse, increased 1,057 points or 21 per cent in January-September period of 2017.

Also known as portfolio investment, foreign investment accounts for around only 1.0 per cent of the premier bourse's total market capitalisation, which stood at Tk 4,083 billion at the end of Tuesday's trading.

Banks are the foreign investors' preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also draw their attention.

Net foreign investment in 2016 was Tk 13.41 billion, which was seven-fold high over the previous year, according to DSE data.

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