Net foreign investment in Dhaka stocks dropped 78 percent month-on-month in July amid reduced trading hours and weak volumes owing to the occasion of Ramadan.
Overseas investors bought shares worth Tk 166.45 crore and sold shares worth Tk 86.81 crore to yield a net investment of Tk 79.64 crore in the first month of the current fiscal year, according to data from the Dhaka Stock Exchange.
Trading hours on the premier bourse had been reduced by an hour for Ramadan, which began on June 30. Furthermore, trading took place on 18 days in the last month as opposed to 22 days a month before.
The daily average turnover on the DSE also declined to Tk 288.65 crore in July from Tk 336.30 crore the previous month.
“It is undeniable that net foreign investment fell statistically last month, but it does not in any way say that the outlook of the stockmarket or the economy was weak,” said Md Saifuddin, managing director of IDLC Securities, a leading stockbroker that deals with foreign investment. “Overseas investors are continuously showing their interest about our market, making queries and seeking information about the market.”
The statistical fall in net investment should not be a matter of concern, he said, adding that one or two months' statistics is not enough to draw a conclusion on the foreign investment trend.
While banks remain the foreign investors' preferred sector, they also showed interest in non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT.
In the January-July period of this year, foreign investors bought shares worth Tk 2,813.93 crore and sold shares worth Tk 1,174.55 crore, taking their net investment to Tk 1,639.38 crore, according to the premier bourse's data.