Foreign investment in stocks drops further

Foreign investment in the capital market declined for the second month in August due to the increase in settlement period.

“There were plenty of buy orders from the foreign investors’ side, but we needed more days to execute the orders,” said Mohammed Rahmat Pasha, chief executive officer of Brac-EPL, a stockbroker. It used to take 1-2 days to execute the orders in 2010, but now it takes 4-5 days, he said.
In August, foreign investors bought shares worth Tk 220.36 crore and sold stocks worth Tk 64.95 crore to take their net investment for the month to Tk 155.41 crore, down 17.57 percent from July’s Tk 188.54 crore, according to data from Dhaka Stock Exchange.
Although the foreign investors remain updated about the country’s political situation, they are not concerned about it, according to Pasha. “Basically, they make their investment decisions based on company fundamentals.”
Banks were the foreign investors’ preferred sector, but non-bank financial institutions, power and energy, pharmaceuticals, multinationals, telecoms and IT also caught their attention.
Also known as portfolio investment, foreign investment accounts for around 1 percent of the DSE’s total market capitalisation.
Between January and August, foreign investors bought shares worth Tk 1,717.42 crore and sold stocks worth Tk 462.7 crore, showing net investment of Tk 1,255.72 crore, according to DSE data.