Dhaka, Bangladesh (BBN)– Net foreign investment in Bangladesh’s stocks marked a significant jumped year-on-year in January, 2017 year as overseas investors consider the stock market lucrative for long-term investment.
The overseas investors bought shares worth BDT 6.11 billion, while they sold stocks of BDT 4.25 billion in January 2017, to take their net investment for the first month of the year to BDT 1.86 billion, according to statistics from the Dhaka Stock Exchange (DSE).
In January, 2016, the net foreign investments was negative BDT 225 million as the foreign investors bought shares worth BDT 3.23 billion and sold shares worth BDT 3.45 billion.
An analyst said the favourable macroeconomic indicators coupled with political stability increased the foreign investors’ confidence and encouraged them to park fresh funds in the securities.
“Foreign investment in our capital market is gradually increasing and the trend will continue in the coming days too as the market offers discounted rate of many fundamental stocks,” a DSE official told BBN in Dhaka.
Foreign fund managers see the Bangladesh stock market as one with potential among the emerging markets due to positive macroeconomic indicators and a stable political scenario in recent months, said a local stockbroker who deals with foreign investors.
“Lucrative dividends declared by other multinational companies also encouraged the investors to park money in the securities,” he added.
During the month of January, DSEX, the prime index of the DSE, registered a cumulative gain of 432 points or 8.58 percent.
The daily turnover, an important gauge, stood at BDT 14.86 billion on average, in January, 2017.
Banks shares were the top choice of foreign investors, who also seemed interested in power and energy, non-banking financial institutions, telecom, pharmaceuticals, multinational companies and IT companies.
Also known as portfolio investment, foreign investment accounts for less than 2.0 percent of the premier bourse’s total market capitalisation, which stood at BDT 3,673 billion as of Wednesday.