While there is a downturn in other financial sectors amid the pandemic, the opposite has been prevailing in the capital market which set records one after another.
The market regulator is holding roadshows in different countries of the world to attract expatriates and foreigners to invest in the potential sector of the country's capital market.
Different scenario
The market review found that foreign investors sold more shares than they bought in July and August.
As a result, net foreign investment has declined by about Tk 400 crore in the first two months of the current fiscal year. This information has been found in the share trading charts of foreign investors sent from Dhaka Stock and Chittagong Stock Exchange to the Bangladesh Securities and Exchange Commission (BSEC), the regulatory body of the capital market. BSEC sources said.
Instead of re-investing in the capital market at this time, foreign investors are selling shares to make a profit. However, market experts said that the rule of the capital market is to take away the profit by investing.
No new investment came by roadshow
Experts say that there is no new investment in the country's capital market centered on roadshows. On the contrary, since there are no good companies to invest in the market, foreign investors are taking profits by selling shares. However, BSEC executive director and spokesperson Mohammad Rezaul Karim said that even after selling the shares, they are not leaving the capital market.
In this regard, Bangladesh Merchant Bankers Association (BMBS) President Sayedur Rahman said, expatriates or foreign investors invest in the capital market based on finding good shares. They analyze the stocks before investing and buy at a lower price than the reasonable price. If the price is higher, they pick up the profit by selling. This is the rule of the capital market.
He said that before the share price was low, they bought, now they are selling at a higher price. They have come to the market in the hope of profit, not so.
Amount of total foreign shares
According to the BSEC data, in July and August of the FY 2021-2022, about Tk 800 crore was traded on the DSE for the sale of shares of expatriates and foreigners. Of this, Tk 511 crore 67 lakh 30 thousand was traded on DSE in August alone. In July, they traded 278 crore 6 lakh shares. In other capital markets in Chittagong, shares worth Tk 50 lakh were traded in July and August.
BSE data shows that in July, foreigners bought 51.20 crore shares worth Tk 278.06 crore while shares were sold worth Tk 228.40 crore.
In other words, shares were sold four and a half times more than buying shares. The net investment has decreased by 16 crore 20 lakh taka.
The sale doubled in August. Last month, expatriates traded shares worth Tk 511.67 crore. Of this, he shares worth Tk 153.10 crore were bought while Tk 358.50 shares worth was sold. It means, the net investment has decreased by Tk 205.40 crore.
Foreign investment at 70 companies
According to BSEC data, foreigners are currently investing in 60-70 companies in the capital market. Of these, investment in 40 companies has declined in the last two months. They have sold the shares of these 40 companies. The most sold shares were in the pharmaceutical and chemical sectors.
Mohammad Rezaul Karim, executive director and spokesman of BSEC, said that foreigners have been investing in the capital market since 2020. Now many new products have come in the capital market. The depth of the market has increased. The market has also recovered. As a result, there is no reason to leave the market.
Capital market back to track
It is to be noted that the country's capital market has turned around after a decade of catastrophe in the capital market in 2010. Professor Shibli Rubaiyat-ul-Islam's commission has been running the country's capital market for a year and a half since the beginning of 2020. The upward trend resumed in the capital market at his hand.
During this period, the transaction has increased from from Tk 300 crore quota to Tk 3,000 crore. The index doubled from 3,500 points to over 7,300 points. Share prices of almost all companies have risen. And the market capitalization of DSE has risen from Tk 3 lakh crore to Tk 5 lakh 80 thousand crore.
