A file photo shows the Dhaka Stock Exchange building at Nikunja in the capital, Dhaka. Investors from the United States of America have decreased investment in Bangladesh stock market by 33.7 per cent in 2022 compared with that in the previous year, according to Bangladesh Bank data. — New Age photo
Investors from the United States of America have decreased investment in Bangladesh stock market by 33.7 per cent in 2022 compared with that in the previous year, according to Bangladesh Bank data.
The data showed that investment by US citizens in the country’s capital market plunged to $697.67 million at the end of 2022, which was $1,052.97 million in 2021.
The overall balance of foreign investments in the country’s capital market plunged to $1,263 million in 2022 from $1,925 million in 2021.
Among the foreign investors, US-based investors accounted for 55.2 per cent of the total volume of foreign investment in the capital market.
The United States and other countries raising their policy rates several times have made it more appealing for the foreign investors to invest in those countries, market experts said.
Due to various political developments, a sense of caution may have risen among foreign investors as the upcoming national election approaches, they said.
Recently, investors have been facing challenges such as rising inflation, interest rate caps, energy crisis and depleting foreign reserves.
Volatility and risks on the market may also prompt the foreign investors to take their funds to safe havens, they said.
Luxembourg investors held the second position, having $155 million or 12.3 per cent, while United Kingdom investors registered the third position with $139.42 million or 11 per cent of the total foreign investments in 2022.
Luxembourg and the UK had $289.15 million and $205.92 million worth of investments respectively in the country’s capital market in 2021.
Singapore-based investors invested $103.48 million in 2022, which was slightly lower than that of $141.59 million in 2021.
Other countries had $64.89 million in investments in the country’s stock market in FY22.
Investments from Mauritius and Cayman Islands plummeted to $9.65 million and $10.76 million respectively in 2022 compared with that of $48.57 million and $17.24 million respectively in the previous year.
Investments from Canada, Pakistan and the UAE also dropped to $43.04 million, $12.6 million and $10.12 million respectively in 2022, down from $43.49 million, $17 million and $12.13 million respectively in 2021.
However, investments from British Virgin Islands soared to $30.30 million in 2022 from $14.07 million in 2021.
Foreign currency balance in non-resident investor’s taka accounts (NITA) was $63.32 million in 2022, which was $26.37 million in FY21.
In the financial year 2021-22, the foreign investors purchased shares worth $139.4 million against their selling of shares worth $334.62 million, making net foreign investment $195.22 million negative.
In 2021, the net overseas investment stood at $293 million negative as the foreigners purchased shares worth $323.5 million against their selling of shares worth $617.41 million.
The net foreign investment has been negative since the financial year 2018 due to volatility on the financial market, market manipulation, frequent policy changes and pressure on the exchange rate.
