Foreign net investment in the Dhaka Stock Exchange jumped 328 percent in January, a sharp rise that shows growing foreign interest in Bangladesh’s market and offers a chance for more trade and jobs. Foreign investors bought shares worth Tk 4.03 billion and sold Tk 1.24 billion in January, giving a net inflow of Tk 2.78 billion, the stock exchange data show. That net inflow was the highest in eight months, with the last larger monthly net coming in June 2013 when foreigners put in Tk 3.36 billion. By contrast, net foreign investment in December 2013 was Tk 649.46 million, so January’s gain marks a clear turn that may help improve market liquidity. Local market experts say fund managers are looking for long-term value in well-run companies that now trade at lower prices than before. They add that the perception of stable politics and fewer near-term protests has encouraged foreigners to take new positions, and that steady policy will help build investor confidence. Bankers and managers say the move toward frontier markets has been growing, with fund managers increasing their allocation to places like Bangladesh to seek good returns and to reduce overlap with U.S., European and other emerging markets. Analysts point out that Bangladesh has shown strong social and macro signs that attract investors, but they also note that lasting gains will depend on better power, infrastructure and clear rules that make business easier. Experts suggested simple steps such as more training for company managers, clearer financial reporting and small pilot projects to cut the cost of trade paperwork so local firms can benefit from more foreign money. Although the jump is welcome, foreign portfolio investment still makes up under one percent of total market value, with the Dhaka bourse valued around Tk 2,901.26 billion, so local investors and policy makers see room to grow. Some speakers warned that while a calm political scene helps, long-term stability and steady improvements in the economy are needed to keep foreign interest and to turn short-term inflows into lasting support for firms and jobs. At the same time, more foreign buying can help listed companies find investors, make it easier for local firms to raise growth funds, and encourage banks to offer better services for international trade. Market watchers said that when global fund managers find frontier markets attractive, they often bring new ideas, training and partnerships that help build skills at home. Overall, the jump in January is a positive step for Bangladesh’s stock market, giving a chance to deepen capital access, improve liquidity, and attract steady investor attention if the country keeps improving its economic basics and business rules. Policymakers say sustained reforms could turn that interest into long-term investment gains.
