Total turnover goes down by over
16.49pc
The total turnover of portfolio
investment on the Dhaka Stock Exchange (DSE) dropped by more than 16.49 per
cent in the just concluded year compared to the previous year.According to the
data available with the DSE, the total turnover was Tk 23.55 billion in 2011
against Tk 28.20 billion in 2010, which was 16.49 per cent or Tk 4.65 billion
lower.However, the premier bourse of the country received Tk 784 million net
foreign or portfolio investment in the last year despite bearish trend in the
stock market.During the year 2011, the foreign investors bought shares worth Tk
12.16 billion, while it was Tk 10.70 billion in 2010.As the market experienced
massive correction last year, the foreign investors bought more shares, as most
of the shares were at lucrative prices, commented a stock broker.They sold
shares worth Tk 11.38 billion in 2011, while it was Tk 17.50 billion in 2010.In
total, the benchmark DSE General Index experienced a record 37 per cent decline
in 2011 since 1997, while the market capitalisation dropped 25.40 per cent in
2011.According to the DSE sources, the banking sector followed by fuel and
power, pharmaceuticals, cement and telecommunications sectors attracted the
most foreign investment.Most of the foreign investors are fund managers from
the USA. A number of fund managers from Europe is also active in the market,
market insiders said.According to the DSE statistics, the highest net portfolio
investment was Tk 1.98 billion in August 2011, while the lowest was Tk 522
million in September in 2011.However, in January and July, the foreign
investors sold more shares but buy less."The fall in turnover in 2011 does
not mean that the foreign fund managers have lost their interest in the
Bangladesh stock market," said a fund manager."Foreign investment is
good for the stock market, as such investment is necessary for any emerging
stock market like ours," said a stock broker.The portfolio investment
declined as the stock market witnessed a volatile situation last year, said Mr
Akter H Sannamat, former managing director of Prime Finance and Investment Ltd."The
foreign investors trade after analysing pros and cons of the company and always
invest in the fundamentally strong companies, not like us," said Mr
Sannamat.Mr Sannamt, however, expressed the hope that the portfolio investment
would go up this year, as the securities regulator unveiled foreign portfolio
investors' friendly package.Under the packages, 10 per cent tax on capital gain
for foreign investors has been withdrawn.To attract the portfolio investment
which is one of the vehicles of the growth for an emerging stock market like
Bangladesh, he said, the coordination among the relevant government agencies is
required."Foreign investors want growth-oriented market and always look
for new quality issues like those of telecommunications, infrastructure and
utility sectors," said Mr Sannamat, also a stocks expert, adding that a
steady market growth and political stability are also pre-requisites for wooing
foreign investors.He also stressed the need for more focus on NRB (Non-resident
Bangladeshi) investment in the stock market.
