Home ›› 24 Aug 2022 ›› Stock
Foreign portfolio investors (FPIs) pruned their shareholding in Beximco Pharmaceuticals and Olympic Industries in almost a year until June of this year, according to an analysis.
Of the listed companies, the pharmaceutical company saw the highest decrease in its foreign shareholding to 28.6 per cent until June this year, which was 30.41 per cent in August of the last year.
It was followed by Olympic Industries. Its foreign shareholding fell to 25.7 per cent, down from 28.56 per cent during the period.
BRAC Bank had the largest foreign shareholding of 36.1 per cent until June 2022.
However, the figure stood at 3.9 per cent of the total equity market capitalisation on DSE at the end of June this year, dipping below a mark that has not been recorded since 2015,
In June of this year, Olympic Industries ranked third with 25.7 per cent foreign ownership, followed by Renata Ltd with 22.9 per cent, Islami Bank with 20.6 per cent, Delta Brac Housing Finance Corporation (DBH) with 19.3 per cent, BSRM Ltd with 17.5 per cent, Square Pharma with 13.9 per cent, Ring Shine Textile with 10.2 per cent, and Shepherd Industries with 9.4 per cent.
“Foreign investors preferred companies that had management efficiency, better business strategy, good corporate governance and ethical standards, transparency in financial statements, and bright business prospects,” said stock market analyst Abu Ahmed.
On Tuesday, Beximco Pharma’s share price jumped 2.71 per cent to Tk 163 and Olympic Industries’ share gained 3.38 per cent to Tk 137.8 on the Dhaka Stock Exchange.
Over the last five years, the Bangladesh equity market had a surge in foreign portfolio investment, but it was very insignificant among its peers. Recently, the securities regulator has been stepping up its efforts to woo foreign investments by organizing roadshows in several countries.
Foreign portfolio investors withdrew a record Tk 1,780 crore from the DSE in FY22.
In FY21, foreign investors withdrew equity investment of Tk1,870 crore from the country’s capital market, while they invested Tk2,346 crore a year ago, according to the Dhaka Stock Exchange.
Foreign transactions were Tk 8,432 crore, which was 13 per cent lower than the previous year during the period.
As per DSE data, the net foreign investment has become negative since FY19 – when it was at Tk 183.7 crore. It was Tk 1,399 crore in FY20 and TK 3,513 crore in FY21.
The net foreign investment became negative in FY19 for the first time since FY11. Market operators also noted that a series of banking scandals, along with a lack of good governance in the capital markets, had also discouraged portfolio investment. Net investment by foreign investors in the country’s premier bourse was at an all-time high of Tk 2,494 crore in FY14.
Overseas investors’ turnover at the bourse was negative Tk 52 crore in FY10, negative Tk 404 crore in FY11, Tk 529 crore in FY12, Tk 1,230 crore in FY13, Tk 2,494 crore in FY14, and Tk 1,299 crore in FY15, Tk 2,268 crore in FY17, and Tk 72 crore in FY18.
