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Foreign investors turn net buyers in January
Overseas funds signal renewed confidence after five months of selling
Foreign investors have started the year on a positive note-
Foreign investors have started the year on a positive note, signalling renewed confidence in the capital market by reversing their prolonged selling trend.
After months of cautious positioning amid political uncertainty and election-related concerns, overseas investors turned net buyers in January.
This snapped a five-month streak of net share sales and marked a notable shift in market sentiment at the start of the year.
Market observers say the change in foreign portfolio behaviour reflects improving confidence following greater political clarity and a more stable investment outlook.
A review of the latest transaction data from the Dhaka Stock Exchange (DSE) shows that foreign investors purchased shares worth Tk197.62 crore in January, while sales stood at Tk179.61 crore, resulting in net purchases of Tk18.01 crore.
The turnaround follows five consecutive months of net selling from August to December 2025, with selling pressure intensifying in the final quarter.
In December, foreign investors bought shares worth Tk32.40 crore against sales of Tk113.38 crore.
In November, purchases totalled Tk94.06 crore compared to sales of Tk173.41 crore, while in October they bought Tk96.68 crore and sold Tk271.30 crore.
Market participants attributed the heightened selling to political unrest and uncertainty surrounding the national election during that period.
According to analysts, uncertainty over whether the election would be held, along with volatility in the political environment, influenced both local and foreign investors.
Many individual domestic investors leaned towards selling shares, while foreign investors increased sales as part of risk-management strategies.
However, as the election process became clearer and concluded peacefully, confidence gradually returned, a shift reflected in January’s trading data.
Analysts caution that higher foreign share sales do not necessarily indicate a withdrawal of investment.
For example, if an investor buys shares worth Tk200 and their value rises to Tk350, then sells Tk150 worth of shares, this represents profit-taking rather than a withdrawal of the original capital.
Therefore, the gap between purchases and sales alone does not fully capture the actual net investment position.
They note that assessing net investment accurately requires information on total capital inflows and outflows.
In a falling market, even smaller sales figures could reflect larger capital withdrawals. Conversely, in a rising market, higher sales volumes may still leave a significant portion of the original investment intact.
DSE data further show that foreign investors’ transactions fluctuated throughout 2025. Out of 12 months, purchases exceeded sales in four months, while sales surpassed purchases in eight months.
Overall, foreign investors bought shares worth Tk1,825 crore during the year, compared with sales of Tk2,095 crore, resulting in net sales of Tk270 crore.
Former DSE director Shakil Rizvi said that with election-related concerns easing, investors are gradually regaining confidence.
The peaceful completion of the election has created positive expectations in the market. If supportive policies and effective planning are adopted, participation from both local and foreign investors is likely to increase in the coming months, he added. Recommended Stories