Foreign investments in the Dhaka stockmarket almost doubled to Tk 137 crore in July from the previous month, as foreign fund managers and investors considered Bangladesh lucrative for long-term investment.
“Foreign investors took up fresh investments buoyed by the fact that most of the fundamentally strong stocks have become lucrative,” said Rakibur Rahman, president of the Dhaka Stock Exchange.
Foreign investors always look for emerging equity markets, Rahman said. “Bangladesh is an emerging economy considering its GDP growth.”
The country’s GDP grew by 6.3 percent in fiscal 2011-12, with a target to hit the 8 percent-mark by fiscal 2014-15.
“Bangladesh has a huge potential as the country’s economic growth and performance by listed companies are very good,” Roberto Pusterla, a Swiss fund manager, said in an interview with The Daily Star in March.
He emphasised the need for political stability, power and infrastructure development, and macro economy and foreign investor friendly policy, to attract investors into the country.
“This is the right time to invest in the Bangladesh stockmarket as the market is lucrative for long-term investments,” said Pusterla, also a member of the management team of the Geneva-based private bank Banque Morval.
Rahman, similarly, said it was the right time for Bangladeshi institutional investors to go for long-term investment.
“Foreign investment flow increased in the June-July period thanks to favorable macroeconomic indicators and market dynamics,” said Muhammed Rahmat Pasha, chief executive officer of BRAC-EPL Stock Brokerage Ltd.
On the macroeconomic front, inflation reached a new low, the dollar rate had stabilised for months, and the budget, overall, was optimistic, Pasha said.
Overall inflation declined by 0.10 percentage points to 7.93 percent in August, according to data from Bangladesh Bureau of Statistics.
“Generally, foreign investors like to enter the market after the dollar rate appears stable. This is an important criterion for them,” he said.
“Furthermore, the index was lower and several fundamentally strong stocks were lower than the foreign investors’ valuation — they were available at a bargain.”
Courtesy of The Daily Star
