Foreign funds treble in stocks

Net foreign investment in the capital market has more than tripled to Tk 1,569 crore in the first seven months of 2017 compared to the same period last year on the positive movement of the indexes of price.

The net position of the foreign portfolio stands at Tk 449 crore in January-July 2016, according to data from Daka Stock Exchange (DSE).

In July of this year, foreign investors bought shares worth Tk 625 crore and sold shares worth Tk 424 crore.

This means that the net investment position was at Tk 200 crore in July, up 25 times per Tk 8.3 crore in July last year.

Foreign investors mainly interest in the purchase of bank shares, according to a senior officer of a merchant bank.

He said the lack of investment opportunities in the global market in the midst of the economic recession has prompted foreign investors to expand their portfolio in Bangladesh.

The International Finance Corporation recently invested on Tk 131 crore to buy 5% on behalf of City Bank. The World Bank Group Private Sector Loan arm will place its director on the board of the local private bank.

City Bank's foreign holdings rose to 10.55% in July, up from 6.10% in December last year.

Investments by foreign investors in other private banks are also increasing, which increases the prices of bank stocks.

The capital stock market of banks rose 15 percent to Tk 56,000 crore in June this year, from Tk 48,400 crore in December last year, according to EHR data.

Foreign investors as Islamic banks most, thanks to fast-growing Islamic bank in Bangladesh, said a banker.

Foreign participation by Islami Bank Bangladesh, the country's largest private commercial bank, rose 32.18% in July from 6.38% in December last year.

Among the other Islamic banks registered, the Al-Arafah Islami bank saw an increase in foreign participation, from zero in December to 2.96 percent in July this year.

First Security Islami Bank's foreign share rose from 2.77% in July to 2.77% last December, while it was 1.43% for 0.48% for Social Islami Bank During the period, the EHR data show.

Among other private commercial banks, Exim, IFIC, Mercantile, One, Trust, Prime, Southeast and Uttara also experienced an increase in foreign holdings.

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