Foreign investors sold more shares than they bought in Dhaka Stock Exchange last month mainly because of political tension ahead of the upcoming national election and the depreciation of the local currency.
Last month, they purchased shares worth Tk 282.9 crore but sold almost double the amount at Tk 484.18 crore, bringing down the net investment to Tk 201.28 crore in the negative.
However, the net investment was Tk 35.16 crore in the positive in the previous month, according to data of the premier bourse.
Foreign investors embarked on a selling spree fearing political turmoil, a common phenomenon ahead of polls in Bangladesh, a top official of a brokerage house said preferring anonymity.
“So they want to liquidate their investment although political chaos is yet to unfold.”
Foreign investment will pick up again if the political environment remains calm after the election, the official said.
“Another reason behind the sell-off is the depreciation of the taka. Foreign investors are now getting Tk 2.98 less than what they used to get against every dollar a year ago.”
The exchange rate for every dollar is Tk 83.88 now, which was Tk 80.90 a year ago, according to Bangladesh Bank data.
Moreover, the yield on US Treasury bond has also soared recently, which has encouraged foreign investors to pour money into the tools.
Yesterday, the 10-year US Treasury yield stood at 3.088 percent, up from its close at 2.88 percent on August 24.
There is nothing to worry, as the transaction pattern is very common for foreign investors, who always adopt a wait-and-see policy ahead of any national election, market insiders said.