The DSE through block market transactions witnessed foreign portfolio investment worth Tk 105.17 crore in January this year, which is around 6.5 percent of the total turnover in the month. In December last year, the DSE experienced Tk 35.33 crore foreign portfolio investment, sources said.

Market analysts have attributed a stable political scenario following the declaration of a state of emergency and formation of a new interim government to the surge in foreign portfolio investment in local securities through merchant banks.

They also said the stock market also started witnessing a huge capital inflow from the local investors in mid January, resulting in upward turnover.

According to the sources, banking sector followed by power, pharmaceutical and cement sectors received most foreign investment.

A healthy operating profit by the banks last year attracted the foreign investors, the analysts pointed out.

"The foreign investment is good for the stock market," DSE Chief Executive Officer Salahuddin Ahmed Khan said.

Some experts, however, said there should be some sorts of lock-in system so that the foreign investors cannot sell all the shares at a time as such kind of selling pressure will create a negative impact on the market.

According to the statistics, the foreign portfolio investment was increasing from the month of July last year. In July, the portfolio investment in the DSE was Tk 10.31 crore while it reached Tk 14.57 crore in August, Tk 21.10 crore in September, Tk 14.54 crore in October and Tk 27.72 crore in November.

DSE, CSE INDICES DROP SHARPLY

The price indices on the stock exchanges fell sharply yesterday amid a selling pressure from the investors following a rumour of crackdown on black-money holders who have invested on the share market.

The benchmark DSE General Index went down by 48.72 points, or 2.63 percent, to close at 1802.98 points while the CSE Selective Categories Index declined by 75.59 points, or 2.76 percent to finish at 2659.40 points.

The DSE All Share Price Index also dropped by 41.60 points, or 2.74 percent, ending the day at 1476.06 points while the CSE All Share Price Index went down by 125.08 points, or 2.97 percent, finishing at 4072.54 points.

Of the 196 issues traded on the DSE, 31 gained, 151 declined and 14 remained unchanged while of the 102 issues traded on the Chittagong Stock Exchange (CSE), 16 advanced, 81 declined and five remained unchanged.

The total turnover came down to Tk 106.48 crore on DSE and Tk 23.86 crore on the CSE.

UNB adds: Finance Adviser Mirza Azizul Islam has dismissed the rumour of crackdown on black-money holders, who have invested money in the share market, led to the sharp fall in share prices on the DSE yesterday.

"There is no justification behind this panic," he told reporters replying to anxious queries.

He emphatically said, "I refute the rumor. There may be other reasons for fall of share market ... There is no justification behind this panic."