Foreign investment in capital market falling continuously

The foreign investors’ shares offloading hit 7.5 times higher than the purchase of their stocks in the country’s premier bourse in September this year.

According to the Dhaka Stock Exchange (DSE) data, foreigners sold scrips worth TK 333.43 crore in September while they bought shares worth Tk 44.26 crore only.

The total share transactions by abroad investors stood at Tk 377.45 that month.

Their selling spree had also remained ascendant in August this year with shares selling worth TK 668.42 crore against the selling worth 86.20 crore.

The total transactions by foreigners totaled Tk 754.63 crore in August.

Analysts said the steep depreciation of the taka against the dollar coupled with domestic as well as global economic slowdowns had weakened the confidence of investors, leading to the decline in foreigners’ stock investments.

Mohammad Rezaul Karim, executive director and spokesperson for the Bangladesh Securities and Exchange Commission (BSEC) said although foreign investment fell slightly in September, the participation of institutions and individual investors surged at the same time, helping the market stay stable.

“The ascendency of the dollar price is expected to soften in the coming months. If the dollar value softens, the foreign investors would again come back to the market,” he added.

Commenting on the issue, DSE Director Shakeel Rizvi said foreigners never come to the market for incurring losses. They put their funds in any country’s stock markets just after being sure about the prospect of profits.

“They were now withdrawing their capital due to the global economic slowdowns and the volatility in the currency market. So, their shares offloading in recent months were not unusual.”

In terms of the total market capitalisation, the DSE-listed companies’ sponsor-directors hold shares worth Tk 1,963.9 billion or 43.11 per cent, while institutional investors own Tk 916.5 billion or 20.12 per cent, the government Tk 148 billion or 3.25 per cent, foreign investors Tk 99.8 billion or 2.19 per cent, and general investors hold Tk 1,427 billion or 31.33 per cent till May 2022, the DSE data read.