Selloffs wipe out Tk680cr market cap from insurance sector in a week.

In their bid to book quick gains from the recently rallied insurance stocks, investors put huge sell pressure on the sector throughout last week, and the sector ended up losing Tk680 crore in market capitalisation.

Of the amount, general insurance lost Tk434 crore, and life insurance Tk246 crore at the Dhaka Stock Exchange (DSE).

Last week, seven insurance companies made the list of top losing stocks at the DSE, of which, Pragati Life Insurance was the most corrected with a loss of 15.9%, compared to the previous week. The company’s share price stood at Tk125.8 each last Thursday.

Earlier, in January this year, Pragati Life’s share price jumped by 152% in just about four months. The DSE sent query letters to the company twice seeking explanations behind this unusual price hike. But the company said the reason behind this price hike is unknown.

But after the stock’s rally, investors decided to sell their holdings in Pragati Life, and due to this sell pressure, the company’s share price dropped by 25% in the last two weeks.

The same was the case with the shares of other insurance companies.

Other than Pragati Life, Pragati Insurance, Popular Life Insurance, Sonali Life Insurance, Pioneer Insurance, Green Delta Insurance, and Sandhani Life Insurance also made the top losers’ list last week.

DSEX, the benchmark index of the DSE, fell by 11.43 points to close at 6,283 last week, compared to the previous week. The Shariah index DSES also lost 2.07 points, and stood at 1,371.

But the blue-chip index DS30 gained 4.62 points to reach 2,235 as investors reshuffled their portfolio with big companies’ shares – the issuers of which posted earnings growth in the latest quarterly financial statements.

Companies like Apex Footwear, Olympic Industries, Bangladesh Shipping Corporation made the top gainers’ list last week.

EBL Securities said in its weekly market review that the DSEX extended its correction mode for the second consecutive week as investors continued to rebalance their portfolios in response to the earnings disclosures of the listed companies for the latest quarter.

The market has been concentrated on selective issues that have been able to post favourable bottom-line results, defying recent macroeconomic adversities, it added.

However, the daily average turnover of the DSE increased by 14.2% to Tk648 crore in the week, compared to Tk567 crore in the previous week.

The IT sector dominated the weekly turnover list, capturing 17.9% of the total DSE turnover, followed by pharmaceuticals (14%) and miscellaneous (9.5%).

Buyers had been concentrated on selective stocks while the majority of stocks remained stuck at the floor price level. Of 380 issues traded, 200 remained unchanged, 138 declined, while 42 advanced on the DSE floor.

Genex Infosys became the week’s turnover leader with shares worth Tk327 crore changing hands, followed by Bangladesh Shipping Corporation, Shinepukur Ceramic, Orion Pharma, and Olympic Industries.

Most of the major sectors suffered losses with general insurance incurring the highest loss of 4.4%, followed by life insurance, non-bank financial institutions, power, and pharma.

Source: TB News

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