Foreign investors slash stakes in Olympic, BRAC Bank, Grameenphone amid March sell-off

Foreign investors significantly reduced their exposure to
Bangladesh's capital market in March, offloading shares in leading blue-chip
companies including Olympic Industries, BRAC Bank and Grameenphone, reflecting
a sharp shift in sentiment driven by global uncertainties and lingering
domestic concerns.
Data from the Dhaka Stock Exchange
(DSE) showed that foreign investors remained heavily skewed towards selling
throughout the month, with overall participation declining significantly.
Foreign turnover stood at Tk272
crore, down 59% from February, signalling reduced activity. Of this, total
sales reached Tk215 crore, far exceeding purchases of Tk50 crore, highlighting
a clear net outflow of foreign funds.
Among the worst-hit stocks, Olympic Industries saw the largest sell-off, with
foreign investors offloading shares worth Tk76 crore. As a result, foreign
shareholding in the company fell to 27.62% in March, from 30.26% a month
earlier.
BRAC Bank followed, with Tk34 crore
worth of shares sold, bringing foreign ownership down slightly to 36.48%.
Similarly, Square Pharmaceuticals recorded Tk32 crore in sales, while
Grameenphone saw Tk29 crore worth of divestment, reducing its already low
foreign holding to 0.51%.
Other large companies also came
under selling pressure, though in smaller volumes. Renata Limited saw Tk11.50
crore in sales, followed by City Bank with Tk10 crore and BAT Bangladesh with
Tk4.60 crore.
Foreign investors also trimmed
positions in a range of firms, including BSRM Limited, LafargeHolcim
Bangladesh, Marico Bangladesh, Prime Bank, Beximco Pharmaceuticals, IDLC
Finance and Linde Bangladesh, pointing to a broad-based retreat across sectors.
In contrast, a handful of smaller-cap stocks saw modest inflows. Daffodil
Computers attracted the highest foreign purchases at Tk2.38 crore, lifting its
foreign shareholding to 0.59%. Ring Shine Textile and Paramount Textile also
recorded limited gains.
Overall, foreign investors reduced
holdings in 25 listed companies in March, while increasing stakes in just
eight. Holdings remained unchanged in 81 firms, underscoring a cautious and
selective approach.
As of 6 April, the number of
non-resident beneficiary owner (BO) accounts stood at 43,230, according to DSE
data.
Global tensions, domestic concerns weigh on sentiment
Market experts attributed the sharp
decline in foreign investment to a mix of global geopolitical tensions and
domestic structural weaknesses.
Salim Afzal Shawon, head of
research at BRAC EPL Stock Brokerage Limited, told The Business Standard,
"It's not just the Middle East war. There are many reasons for the decline
in foreign investment. However, in the month following the election, we thought
that foreign investment would increase. But that didn't happen. Rather, it
decreased in an unexpected way."
Analysts said initial optimism
following the formation of a new government after the national elections had
raised expectations of improved market conditions. However, rising tensions in
the Middle East due to the US and Israel's war on Iran disrupted global energy
markets and increased economic uncertainty.
For Bangladesh, which depends
heavily on imported energy, these developments have fuelled concerns over
energy security, inflation and broader economic stability.
Such external pressures have
compounded existing domestic issues, leading foreign investors to adopt a
risk-averse stance.
Structural issues persist
Market participants noted that
overseas investors tend to concentrate their portfolios in a limited number of
fundamentally strong companies, given the scarcity of high-quality listed firms
in Bangladesh.
As a result, even minor shifts in
sentiment can trigger significant sell-offs in these stocks.
The presence of weak or poorly
governed companies – often described as "junk stocks" – has further
deterred foreign participation.
Analysts emphasised that concerns
over corporate governance, transparency, and financial reporting continue to
undermine investor confidence, limiting the market's attractiveness to global
institutional investors.
Structural barriers, including
complex capital gains taxation, inconsistent regulations and difficulties in
repatriating funds, have also been cited as long-standing deterrents. Although
recent policy measures aim to address some of these issues, their impact has
yet to be fully felt.
In response to the declining trend,
policymakers have reiterated their commitment to improving market conditions.
Finance Minister Amir Khosru Mahmud
Chowdhury recently told parliament that authorities are stepping up efforts to
curb market irregularities and manipulation.
He pointed to initiatives to
strengthen investigation and enforcement mechanisms, accelerate digital
transformation and improve accessibility for both domestic and foreign
investors.
















