Dhaka, Bangladesh (BBN)-Net foreign portfolio investment (NFPI) in Bangladesh’s stock market fell drastically by 86 percent in February compared to January as foreign fund managers were in selling mood amid ongoing political unrest.
Foreign investors bought shares worth BDT 2.50 billion and sold shares worth BDT 2.19 billion, taking their net investment to BDT 317.40 million in February, according to statistics from the Dhaka Stock Exchange (DSE).
In January, overseas investors bought shares worth BDT 3.65 billion and sold shares worth BDT 1.36 billion to take net investment to BDT 2.28 billion, the DSE data showed.
It was also the lowest single-month net foreign investment in DSE for the last six months since August, 2014.
In August 2014, net foreign investment was BDT 124.56 million, the DSE statistics showed.
“The net foreign investment in DSE fell drastically in February as foreign fund managers were in selling mood throughout the month amid prolonged political unrest,” said a leading stock broker who deals with portfolio investment.
He said that the foreign investors always want to see a peaceful and stable political environment for their investment.
“As the country’s political situation deteriorated, they went for selling spree to book profit,” he added.
“The foreign investors also keenly observed the country’s political developments as political unrest eat-up companies’ profitability, resulting lower dividend,” he said.
Also known as portfolio investment, foreign investments accounted for around 2 percent of DSE’s total market capitalisation of Tk 3,210.31 billion as of Sunday.
Foreign investors’ preferred sectors are: banks, non-bank financial institutions, power and energy, pharmaceuticals, telecoms and IT, an investment banker said.
They also focused on some multinational stocks that announced healthy dividends and generated good profits, he added.
In 2014, foreign investors bought shares worth BDT 44.06 billion and sold shares worth BDT 17.98 billion to take their net investment to BDT 26.08 billion, which was a record high, according to DSE statistics.
Tuesday, June 02, 2020