Foreign investment in stocks doubles in Jan-Oct
Foreign investment in stocks doubled year-on-year in the first 10 months of 2017 as overseas investors continue to show their trust in the market.
Net position of foreign portfolio with the Dhaka Stock Exchange (DSE) stood at Tk 1,623.43 crore in January-October, compared to Tk 800.47 crore in the same period a year ago.
The steadily growing economy and matured market behaviour after the demutualisation of bourses encouraged foreign investors to put their money in stocks, said a senior executive of the DSE.
Many foreign individuals and institutions are now showing interest to invest in Bangladesh's stockmarket, said M Khairul Hossain, chairman of Bangladesh Securities and Exchange Commission, at a seminar in Dhaka recently.
He said the government's continuous efforts to strengthen the stockmarket have made the country a popular destination for foreign investors.
In the first 10 months, foreign investors bought shares worth Tk 5,346 crore and sold shares of Tk 3,723 crore.
However, a recent move of the central bank made foreign investors cautious along with their local peers.
In October, the Bangladesh Bank took action against overexposed banks, which put pressure on the market.
The central bank fined seven banks for violating stock rule by way of over-exposure.
The move prompted sales pressure as the overexposed banks also had to get rid of shares to adjust their investment in line with the regulatory limit.
As a result, foreign investors were careful about injecting funds into stocks. They sold shares to book profit in October taking their net position into the negative territory.
In fact, both the local and foreign investors booked profit amid the downward market last month, said the DSE executive.
However, there was no unusual movement in price indices, which reflected the matured behaviour of the bourse, he said.
In October, overseas investors sold shares worth Tk 396.86 crore and bought shares of Tk 245.13 crore, creating a negative monthly net investment position of Tk 151.72 crore, DSE data shows.
Monthly turnover in the foreign portfolio fell 32 percent to Tk 642 crore in October from Tk 946.55 crore in the previous month.
Foreign investors will continue to invest more in stocks in the coming days in anticipation of steady economic growth, according to the DSE official.