The Financial Express

Net foreign funds in stocks surge 72 per cent in Jan-Nov

| Updated: December 13, 2017 15:06:42

Lankabangla and Fianancial Express Lankabangla and Fianancial Express
Photo used only for representation. Photo used only for representation.

Net foreign investment in the Dhaka bourse rose 72 per cent year-on-year in the first 11 months of 2017, as overseas investors poured more funds into stocks, anticipating positive market scenario.

Market operators said positive macroeconomic indicators and a steady political scenario boosted the foreign investors' confidence to put fresh stakes on Bangladesh's stocks.

Overseas investors bought shares of Tk 59.82 billion and sold shares worth Tk 43.40 billion to take their net investment for the January-November period to Tk 16.42 billion, according to data from Dhaka Stock Exchange (DSE).

A year earlier, the net investment by foreigners was Tk 9.55 billion for the same period, the DSE data shows.

A DSE senior executive said many foreign individuals and institutions are now showing interest to put their money in Bangladesh's capital market as the demutualisation of bourses encouraged them.

He noted that the government's continuous efforts to strengthen the stock market have made the country a popular destination for foreign investors.

"The sustained revival of the foreign interest was backed by rising corporate profitability, positive macroeconomic indicators coupled with a stable political scenario," said a local stockbroker who deals with foreign investors.

The month-on-month portfolio investment at DSE also rose in November. As they bought shares worth Tk 6.36 billion and sold shares of Tk 6.17 billion to take their net investment to Tk 190 million in November, the DSE data shows.

Net investment by foreigners in October 2017 was negative Tk 1.51 billion.

Between January 1 and November 30 of 2017, DSEX, the prime index of the DSE, also added more than 1,270 points or 25 per cent to reach at 6,306 on November 30.

Also known as portfolio investment, foreign investment accounts for only 1.0 per cent of the premier bourse's total market capitalisation, which stood at Tk 4,207 billion at the close of trade on Monday.

Banks are the foreign investors' preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also caught their attention.

Foreign investors include global investment banks like Morgan Stanley, JPMorgan, Goldman Sachs and asset management firms like BlackRock.

Net foreign investment in 2016 was Tk 13.41 billion, jumping seven-fold compared to 2015, according to DSE data.

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