Stocks attracting more foreign investors: BSEC
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.
He spoke while addressing a seminar on “Promoting investor protection in Bangladesh through good governance and regulatory measures”.
Bangladesh Institute of Capital Market organised the event at its auditorium in Dhaka yesterday.
The capital market should be a big source of fund if Bangladesh wants to achieve the middle income country status by 2021, he said.
The government's continuous efforts to strengthen the stockmarket have made the country a popular destination for foreign investors, he said.
He said the stockmarket is a good source of funds for medium and long-term investments.
“We can mobilise the funds collected from the stockmarket for mega power projects of the country.”
Net foreign investments in the capital market trebled year-on-year in the first eight months of the year as overseas investors were anticipating a positive market scenario, according to Dhaka Stock Exchange data.
Foreign investors bought shares worth Tk 3,051.14 crore and sold shares worth Tk 2,605.44 crore to take their net investment for the January-August period to Tk 445.7 crore.
The investors will have to gather more knowledge about the financial profile of the listed companies in which they want to invest, Hossain said.
He emphasised improving institutional participation in stocks and said around 70-80 percent investment in India is institutional while it is only 10-20 percent in Bangladesh.
The market lacks companies with strong fundamentals, said Arif Khan, CEO of IDLC Finance, adding that efforts should be put to encourage good companies to offload shares.
It is difficult for retail investors to understand the financial statements of listed companies, he said. “To avoid risks, they can invest through mutual funds.”
Bangladesh's stockmarket performed better than those in Vietnam and India in recent times, said Khan, who is also a former member of the stockmarket regulator.
He claimed no insider trading is now taking place thanks to strong rules and regulations.