Foreign funds treble in stocks
Net foreign investment in the capital market more than tripled to Tk 1,569 crore in the first seven months of 2017 compared to the same period last year riding on the positive movement of price indices.
The net position of foreign portfolio stood at Tk 449 crore in the January to July period of 2016, according to Dhaka Stock Exchange (DSE) data.
In July this year, foreign investors bought shares worth Tk 625 crore and sold shares worth Tk 424 crore.
It means, the net investment position stood at Tk 200 crore in July, up by 25 times from Tk 8.3 crore in July last year.
Foreign investors are mainly interested in buying bank shares, a senior executive of a merchant bank said.
He said lack of investment opportunities in the global market amid economic recession prompted the foreign investors to widen their portfolio in Bangladesh.
The International Finance Corporation has recently invested over Tk 131 crore to buy 5 percent share of City Bank. The private sector lending arm of the World Bank Group will put its director to the board of the local private bank.
The foreign holdings of City Bank increased to 10.55 percent in July, up from 6.10 percent in December last year.
The share holdings of foreign investors in other private banks are also increasing, giving a boost to the prices of bank stocks.
The market capital of banks shares rose by 15 percent to Tk 56,000 crore in June this year from Tk 48,400 crore in December last year, according to DSE data.
Foreign investors like Islami banks the most, thanks to the fast-growing Islamic banking in Bangladesh, said a banker.
The foreign holding of Islami Bank Bangladesh, the largest private commercial bank in the country, increased 32.18 percent in July from 6.38 percent in December last year.
Among other listed Islami banks, Al-Arafah Islami Bank saw a rise in foreign holding, from zero in December to 2.96 percent in July this year.
The foreign holding of First Security Islami Bank rose to 4.95 percent in July from 2.77 percent last December, while it rose to 1.43 percent from 0.48 percent for Social Islami Bank during the period, DSE data show.
Among other private commercial banks, Exim, IFIC, Mercantile, One, Trust, Prime, Southeast and Uttara also experienced a rise in foreign holdings.
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