Foreign investors went on a buying spree in the first six months of the year, exploiting the depressed state of the stockmarket.

Foreign investors' market purchases between January and June amount to Tk 770 crore, while their selling, in that period, stood at only Tk 263 crore, according to data from Dhaka Stock Exchange.

The lower value of securities following the stockmarket crash last year tempted foreign investors, most of whom are global fund managers, to hoard stocks, local brokers say.

Although foreign investment, also called foreign portfolio investment, accounts for less than 1 percent of the total market capitalisation, their investment movements tend to carry great weight.

“They are not like our local investors. They do a lot of research before taking any decision on buying or selling,” a local broker said.

The banking shares were most in demand by foreign investors, while power, pharmaceuticals, life insurance and multinational companies were also attractive.

“The foreign investors were in buying mood in the first half of this year, as they took the market positively,” said Khaled Yusuf Farazi, chief executive officer of BRAC-EPL Investment, one of the prime brokerage service providers to foreign fund managers.

“The foreign investors are long-term investors and their investments have a positive impact on the market.”

The month-wise portfolio or foreign investment figures showed that the global fund managers were most active in March and April and relatively quiet in January and June.

In 2011, the foreign investors bought shares worth Tk 1,216.83 crore, an increase of around 12 percent from 2010. Sell-offs fell 35 percent to around Tk 1,138.40 crore in 2011 from a year ago.

The Daily Star/Bangladesh/ 8th July 2012