The monthly net foreign investment in the Dhaka Stock Exchange hit an all time high of Tk 336.59 crore in June with low-priced shares luring the overseas investors.
The foreign investors in June bought shares worth Tk 339.49 crore and sold shares worth Tk 58.30 crore with the total turnover standing at Tk 453.21 core, according to data released by the DSE on Wednesday.
The previous highest monthly net investment by the overseas investors was Tk 251 crore in July 2007.
In May this year net monthly foreign investment was Tk 231.58 crore, which was the highest after Tk 245.09 crore in July 2009.
Market operators said that foreign investment in the market was increasing as the price level of stocks was in a lucrative range following the market crash and dull period in the last three years.
‘Many of the overseas investors are pouring money into the stocks as they are sensing that the market would rebound soon. Even if the market does not rebound this year, they are hoping that the next year will be a good year for stocks after the elections in January,’ said a stockbroker.
Besides, the Dhaka Stock Exchange is in the process to complete demutualisation, which has also attracted investors, he said.
The general index of the DSE is now hovering around the 4,500-point mark, rebounding in last two months from around 3,400 points after it had witnessed severe crash in 2010-2011.
The general index went up to 8,900 points in December 2010 before the crash.
‘Recent falls in the stock market pushed the share prices to a very cheap rate which might have attracted the foreign investors to the country’s capital market,’ IDLC Investment managing director Moniruzzaman told New Age.
He said different steps taken by the government attracted foreign investors to the capital market.
‘Bangladesh holds a growth prospect for the coming days, which attracted the foreign investors. We have added many international features in the market recently which also boosted the foreign investment,’ DSE president Ahsanul Islam told New Age.
Market operators also said the recent move by the DSE to introduce international standard index, designed by Standard & Poor’s, also made many foreign fund managers interested in the country’s capital market.
Bangladesh Bank recently allowed the brokers to share broker commission with their foreign counterparts. The Bangladesh Securities and Exchange Commission is also preparing a set of incentives for the foreign investors to increase their participation in the country’s ailing capital market.
On the other hand, the finance ministry in May decided to refinance Tk 1266 crore in the capital market to implement the scheme for the small scale investors who were affected by the stock market crash in 2010.
The Bangladesh Bank following the finance ministry decision created a fund of Tk 900 crore for the stock market.
The BB at the end of May also relaxed some lone provisioning rules for the financial institutions in a bid to save them from huge amount of loan rescheduling.
Following the government initiatives to boost the market, the benchmark general index of the DSE, DSEX, gained 423.55 points in May and another 225.57 points in June.
The Goldman Sachs, an American multinational investment banking firm, in 2010 had enlisted Bangladesh in the Next-11 emerging countries considering the growth of the capital market.
-With New Age input
