The stock market witnessed sales pressure from the foreign investors as they went for profit booking in October.
The foreign investors were on a buying spree in August-September and then showed a strong selling trend in October.
Dhaka Stock Exchange (DSE) data show that the overseas investors sold shares worth Tk 396.86 crore and bought scripts worth Tk 245.13 crore in October, creating a negative net investment portfolio of Tk 151.72 crore in that month.
Market analysts said the bourse witnessed selling spree from the foreign portfolio managers throughout the month due to a cautious move from the central bank against over-exposure by the banks.
Bangladesh Bank augmented its monitoring and fined seven banks for investing more than the permissible limit in the stock market. As a result, the foreign investors turned cautious about injecting funds into stocks and sold shares to book profits, analysts said.
According to the DSE data, transactions of foreign investors decreased in October compared to previous months. They transacted Tk 642 crore in October, down from Tk 946.56 and Tk 833.94 crore in the previous two months respectively.
In September, overseas investors bought shares worth of Tk 560.51 crore and sold shares of Tk 386 crore. In August, they bought shares of Tk 432.22 crore and sold shares of Tk 400 crore.
Market analysts also said the key index of country’s prime bourse had crossed a 6000-mark in October and market capital also hit the 4 lakh crore-mark. The foreign investors took the chance to book profit during this time.
“It seems that the foreign investors were booking profits,” said a DSE official, seeking anonymity.
Capital market analyst professor Abu Ahmed said the prices of banking shares have been on an upward trend in last six months and the foreign investors have made a huge investment in banking shares.
“The foreign investors are booking profits now, so the general investors have to remain cautious in investing in the banking sector,” he said.
Terming this selling spree as a typical feature of the capital market, Chittagong Stock Exchange Managing Director Saiful Islam Majumder said portfolio investment is increasing day by day and the foreign investors will continue to invest more in stocks in coming days.