Tumult hits stock markets

The political turbulence seems to have hit the country's premier bourse, the Dhaka Stock Exchange (DSE), very hard with fund flow from abroad drying up.

The net foreign fund flow into the DSE has dropped by seven times in a month.

Against a net foreign investment of Tk 2.28 billion in January, the fund flow from abroad has dropped to Tk 0.31 billion in February. That is a huge net drop of Tk 1.96 billion in a month.

Prime Minister Sheikh Hasina has told Parliament that the economy lost Tk 1.2 trillion ($15.5 billion) due to the violent agitation launched by the BNP-led 20-Party alliance since Jan 5.

Dhaka University's finance department Professor Mahmud Osman Imam says the unrest is impacting the stock markets as well.

"Foreigners surely feel the present situation is not conducive for investments and full of risks. That is why they are not investing in our bourses."

IDLC Investment Ltd's Managing Director Mohammed Moniruzzaman agrees. "I would imagine the foreign fund flow is drying up because of the political unrest."

Transactions by foreigners have also sharply dropped on the Dhaka Stock Exchange in a month.

Foreign transactions were worth Tk 5.01 billion in January, but had come down to Tk 4.70 billion in February -- a drop of six percent in net transactions by foreigners.

In February, foreigners bought shares worth Tk 2.50 billion against Tk 3.65 billion in January -- a drop of Tk 1.14 billion in a month.

In February, foreigners have been selling more -- they sold shares worth Tk 2.19 billion in the month against sale of shares worth Tk 1.35 billion in January.