Insurance stocks rise despite market correction

Insurance stocks rose yesterday while the market witnessed a profit booking tendency for the second day in a row. DSEX, the benchmark index of the Dhaka Stock Exchange (DSE), plunged 63 points, or 1.15 per cent, to stand at 5,422.

The market fell in the last two days as investors went for booking profits, according to a stock broker.

"This is normal and it was expected after an eight-day gaining streak," he said, adding that smart investors will return considering the lucrative price of stocks.

But the alarming thing is that insurance stocks have once again come under the spotlight.

When almost all other stocks were falling, insurance stocks were on the rise as some people bought them to allure general investors.

"If general investors buy them, then the big players will sell off their shares," the broker said.

Among 50 listed insurance companies, 31 advanced, 15 fell, and four remained unchanged.

Insurance stocks have been rising for the last few months riding on the rumour that gamblers are buying them, said Abdul Jalil, an investor who has been active in the market since 2008. This could be a big blow for investors, who rush to these stocks since they move fast.

"So, investors need to be cautious or otherwise they will soon incur losses," he added.

The DSE's turnover, an important indicator of the market, dropped 31 per cent to Tk 824 crore.

Crystal Insurance topped the gainers list, rising 11.5 per cent, followed by Agrani Insurance, Dhaka Insurance, Emerald Oil, and Phoenix Insurance.

Stocks of Beximco traded the most with Tk 100 crore worth of shares changing hands, followed by Beximco Pharmaceuticals, National Feed Mills, LafargeHolcim Bangladesh, and British American Tobacco Bangladesh.

Shyampur Sugar shed the most, dropping 7.6 per cent, followed by Intech, Heidelberg Cement, Khan Brothers PP Woven Bag, and Beacon Pharmaceuticals.

Yesterday, 59 stocks advanced, 231 declined and 62 remained unchanged at the DSE.

Chittagong Stock Exchange also dropped yesterday.

CASPI, the general index of the port city bourse, fell 166 points, or 1.05 per cent, to stand at 15,662.

Among 231 traded stocks, 44 rose, 158 fell and 29 remained unchanged, CSE data shows.