Dhaka, Bangladesh (BBN) - Net foreign portfolio investment (FPI) in Bangladesh’s stocks fell 18 percent in January this year compared to same month last year, as foreign fund managers followed ‘wait-and-see’ policy amid ongoing political unrest.
Foreign 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 in January this year, according to statistics from the Dhaka Stock Exchange (DSE).
In January 2014, overseas investors bought shares worth BDT 4.03 billion and sold shares worth BDT 1.24 billion to take net investment to BDT 2.78 billion, the DSE data showed.
“Foreign investors were cautious about taking fresh positions due to political unrest across the country since early January this year,” said a leading stock broker who deals with portfolio investment.
The foreign investors keenly observed the country’s political developments as political unrest eat-up companies’ profitability, resulting lower dividend, he said.
Stock indices also declined last month. DSEX, the benchmark index of the premier bourse, plunged 140.89 points or 2.89 percent over the month to close at 4,724.04 points last month.
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.
BBN/SSR/AD-01Feb15-11:13 pm (BST)