Foreign investment at the Dhaka Stock Exchange turned negative after eight years in the just concluded fiscal year 2018-19 as the overseas investors kept withdrawing funds from the Bangladesh’s capital market amid volatility in the country’s banking sector and the stock market.
The net foreign investment at the country’s capital market stood at Tk 183.70 crore negative in FY19, which was the lowest after FY11 when it was Tk 404.59 crore negative. In FY18, the net foreign investment at DSE was Tk 71.76 crore, the lowest after FY11.
The foreign investors sold shares worth Tk 4,201.51 crore in FY19 against their purchase of shares worth Tk 4,017.81 crore in the year. The foreign investment was negative in nine months and positive only in three months, September, January and February, in the last fiscal year. The foreigners cashed shares worth Tk 716 crore from the stock market in the nine months.
Market experts have said the market began to dip sharply from beginning of the year, losing about 500 points which descended more as the year went by. The continuous share sales by the foreign investors were triggered by political uncertainties ahead of the December national elections, bleak situation in the country’s financial sector, and volatility in the capital market, said market operators and experts. They said the country’s financial sector hit the headlines throughout the fiscal year due to scams, huge capital flight and colossal amount of defaulted loans that kept the investors in limbo.
Experts also said the country’s financial sector hit the headlines throughout the fiscal year due to scams, huge capital flight and colossal amount of defaulted loans that kept the investors in limbo.
The market was very volatile in the last fiscal year as investors lost confidence over the market amid a prolonged bear run at the market, they said. They said secret share sales by the listed companies directors and placement holders, irregularity in initial public offering process and lax regulatory actions against wrongdoers hit the investors confidence.
The DSEX gained just 16 points in FY19 to close at 5,421.6 points on June 30, the last trading day of the fiscal year. The index was at 5,405.46 points on June 28, 2018. The total foreign turnover on the bourse also declined to Tk 8,219.32 crore in FY19, while it was Tk 11,729.2 crore in FY18.
The net investment by the foreign investors at the country’s premier bourse was an all-time high at Tk2,493.57 crore in the FY 2013-14. Overseas investors’ turnover at the bourse was negative Tk52.06 crore in FY10, negative Tk404.59 crore in FY11, Tk529 crore in FY12, Tk1,230.92 crore in FY13, Tk 2,493.57 crore in FY14 and Tk 1,299.84 crore in FY15 and Tk 2,268.47 crore in FY17.