Turnover by the foreign investors on the Dhaka Stock Exchange saw a sharp increase following the changes in the country’s political landscape since August 5.
Trading by the foreign investors surged by 501 per cent, reaching Tk 404.82 crore, compared with that of Tk 67.31 crore in the same period of the previous year.
According to DSE data, the total amount of foreign investors’ turnover in the full month of July on the Dhaka bourse was Tk 243.63 crore.
After the fall of Sheikh Hasina-led government on August 5 by a student-led mass uprising, both the DSE’s turnover and indices experienced significant growth, with the benchmark index rising by 786.64 points over the next four trading sessions till August 11.
Dhaka stocks saw the turnover hitting its highest in nearly 23 months on August 11, at Tk 2,010.08 crore.
Md Musa, a United International University professor, told ¶¶Òõ¾«Æ· that foreign investors increased participation when they thought that they would get good returns from the market.
‘They look if the prices of the undervalued shares are on a rise. If that happens, it sends a positive signal to the foreign investors. Many of the undervalued shares on the DSE saw price increase after the recent political change, which was the main reason for the increase in foreign investments,’ he said.
Ashequr Rahman, managing director of Midway Securities, said that the floor price had been a significant obstacle to attracting new investments to the capital market, especially from foreign investors.
‘Foreign investors typically invest with specific goals or timeframes, but the restrictions imposed by the floor price limited trading, causing a negative effect among the foreign investors,’ he said.
‘However, with the new government in place, investors are beginning to see new opportunities and are returning to the market,’ he said.
On July 28, 2022, the Bangladesh Securities and Exchange Commission imposed floor prices on all listed companies to prevent excessive falls in stock prices amid economic concerns in the country.
After about 18 months, the floor price restrictions were removed for most of the companies in January 2023, except for 35 firms.
Later floor prices were removed for all companies in phases, except two companies.
