Participation of foreign investors in DSE trading hits 4-yr low

Mostafizur Rahman | Published at 12:05am on September 04, 2018

Net foreign investment at Dhaka Stock Exchange dropped for fifth consecutive month in August with the foreign turnover seeing the biggest drop in four years over investors concerns over national elections and its possible impact on financial sectors.
In August, the foreign investors sold shares worth Tk 181.76 crore against their purchase of shares worth Tk 176.01 crore with their net investment dipping to negative Tk 5.75 crore.
The total foreign turnover stood at Tk 357.77 crore in August, hitting a four-year low. Before this August, the lowest foreign turnover was at Tk 317 crore in August 2014.
The foreign turnover in August fell sharply from July this year as the foreign investors continued to go into shell as the country’s national elections are nearing.
Total turnover in July this year was Tk 856 crore.
The net foreign investment remained negative for five consecutive months since April.
It was Tk 24.69 crore negative in April, Tk 282.32 crore negative in May and Tk 206.68 crore negative in June.
United International University professor and share market analyst Mohammad Musa told New Age that the foreign investors continued shedding investment from the capital market to avoid any unforeseen risk surrounding national election.
He also said that the foreigners remained in the side line to figure out the impact of the political skirmish on the market.
Market experts said that foreign investors were keeping eye on the political development in Bangladesh, especially whether there would be a participatory election.
The 11th parliamentary election is expected to be held by January 2019.
Besides, media reports about various scams in the banking sector had made the foreign investors wary as they apprehended that the upcoming election may worsen the situation further.
The foreign investors might wait for the lowest possible share prices at the market to maximise their gains stock brokers said.
The net investment by the foreign investors at the country’s premier bourse surged to Tk 1,704.94 crore in 2017 from Tk 1,340.70 crore in 2016.
Overseas investors’ turnover at the bourse was Tk 3,362.11 crore in 2010, Tk 1,904.19 crore in 2011, Tk 2,355.23 crore in 2012, Tk 2,834.90 crore in 2013, Tk 6,600.94 crore in 2014 and Tk 7,465.4 crore in 2015.
The net overseas investment at the bourse was negative Tk 767.58 crore in the year of market crash (2010).