Norway’s sovereign wealth fund (SWF), the world’s biggest fund, raised stakes in the Bangladesh’s capital market for the third consecutive year in 2018, despite the market remaining bearish in the year due to the December 30 national polls-centric political uncertainties.
The government pension fund of Norway increased its ownership in nine companies, kept unchanged its holdings in three and lowered in five firms in 2018 compared with that in the previous year, according to a web site post of Norges Bank Investment Management Company which manages SWF.
It offloaded its stakes in three companies to invest in three new firms.
SWF has been increasing its stake in the Bangladesh stock market every year since its start of investment in the country in 2015 with around $19 million.
The fund enhanced its presence in an otherwise dull market keeping in mind huge potential of the country’s stock market, market operators said.
They said that the development of the country had been rising significantly that drew attention of countries across the globe.
Bangladesh’s gross domestic product growth hit record 7.86 per cent in last fiscal year (2017-2018), according to the Bangladesh Bureau of Statistics.
Market experts said that the country had to increase investment in infrastructure development and other projects to achieve its 2021 and 2030 visions.
They said banks could not finance the huge amount of money needed for investment and the capital market would be the main source of funds for the development.
A Chinese consortium of Shenzhen and Shanghai stock exchanges on September 5 last year joined Dhaka Stock Exchange as its strategic shareholder through purchasing its 25 per cent shares for Tk 947 crore that also created a positive impression of the Bangladesh’s stock market, they said.
Therefore, the foreign fund found it profitable for more long-term investments in the capital market of Bangladesh in 2018 despite the market passing a very tough year amid elections-centric political uncertainties, they said.
DSEX, the key index of DSE, shed 13.75 per cent, or 858.88 points, over the year to close at 5,385.64 points on December 27, 2018, the last trading session of the year.
Besides, the average turnover at DSE plunged by 38.43 per cent to Tk 552.03 crore in 2018 compared with that of Tk 874.83 crore in the previous year.
The net investment value of SWF declined to $202.91 million in 2018 compared with that of $244.41 million in the previous year due mainly to the significant fall in share prices of most of the companies.
SWF almost doubled its holdings in Bangladesh Submarine Cable Company, Singer Bangladesh and Eastern Bank in 2018 compared with that in the previous year.
It offloaded its stakes in LankaBangla Finance, MJL Bangladesh and Mutual Trust Bank, and invested in Summit Power, Bashundhara Paper Mills and BBS Cables.
The fund cut investments in ACME Laboratories, Berger Paints, Mercantile Bank, Olympic Industries and Southeast Bank.
SWF invested most in Square Pharmaceuticals ($44.25 million) followed by Grameenphone ($37.81 million), BRAC Bank ($27.86 million) and Beximco Pharmaceuticals ($11.22 million).
The net foreign investment at DSE was Tk 530.74 crore negative in 2018 at DSE from Tk 1,704.94 crore positive in the previous year.
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