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Foreign investment in the capital market shot up

Foreign-investmentForeign investment in the capital market shot up in October, despite the market being ridden by political uncertainty.

The local investors were in the mood to sell in anticipation of political chaos, but foreign buyers went on a buying spree, as they found the time just right to take positions at lower prices.

The month-on-month net investment rose by 170 percent to break the declining trend in the last three months.
Foreign investors bought shares worth Tk 266.85 crore and sold shares worth Tk 38.50 crore to take their net investment for the month to Tk 228.85 crore, according to data from Dhaka Stock Exchange.

In September, they bought shares worth Tk 167.55 crore and sold shares worth Tk 82.9 crore, resulting in net investment worth Tk 84.65 crore for the month.
Foreign fund managers see the Bangladesh economy and the stockmarket as emerging ones, despite political volatility in the country, said a local stockbroker who deals with foreign investors.
“Although the country is facing instabilities in the political arena in recent times, the foreign investors are very optimistic with the economic potential,??? said Wali Ul Islam, chief executive of LankaBangla Securities, a leading stockbroker.
The market indices saw a downward trend last month due to a shaky political situation. “But the foreign investors thought it was a good time to take positions in securities at lucrative prices,??? said Islam.
He also said the future prospect of foreign investment is promising. “Investment will rise in future, as we are in the continuous process of attracting foreign investment.???
Also known as portfolio investment, foreign investment accounts for around 1 percent of DSE’s total market capitalisation.
Banks were initially the foreign investors’ preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also caught their attention.
Between January and October, foreign investors bought shares worth Tk 2,152.82 crore and sold shares worth Tk 584.10 crore, showing a net investment of Tk 1,568.72 crore, according to DSE data.

– Sarwar A Chowdhury


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