Insurance investors come to senses; stocks finally take a tumble

Insurance stocks took a tumble yesterday as investors have finally realised that local insurers will not witness a significant increase in profits amid the ongoing coronavirus outbreak.

Although market analysts and even the insurance companies themselves said that there were no valid reasons behind the inflated share prices, investors paid no heed to these experts.

But yesterday, after a few insurers disclosed their disappointing profits, the investors were suddenly in a rush to wash their hands of insurance stocks.

As a result, the losers table of the Dhaka Stock Exchange was mostly occupied by insurance companies.

Of the top 10 losing stocks, nine were from the insurance sector.

Karnaphuli Insurance shed the most with a drop of 9.97 per cent, followed by Global Insurance, Nitol Insurance, Islami Insurance, Northern Insurance, Janata Insurance, Eastland Insurance, Sandhani Life Indurance and United Insurance.

In terms of sectoral performance, insurance has fallen drastically compared to other sectors.

Of the 48 listed insurance stocks, five rose, two remain unchanged and 41 fell in the red zone.

Prime Life Insurance, Nitol Insurance, Eastland Insurance, and Global Insurance witnessed a year-on-year decrease in their life revenue funds or earnings per share for the third quarter (July-September) this year.

However, Reliance Insurance and Sunlife Insurance saw higher earnings per share during the same period.

Despite the fall of insurance stocks, DSEX, the benchmark index of the DSE, edged upwards by 7.57 points, or 0.15 per cent, to 4,846.10.

Meanwhile turnover, an important indicator of the market, fell 13.3 per cent to Tk 963 crore compared to the previous trading day.

Beximco Pharmaceuticals traded the most with shares worth Tk 63 crore changing hands followed by Paramount Insurance, Provati Insurance, Global Insurance and Express Insurance.

Of the total 354 traded companies, 154 advanced, 135 declined and 65 remained unchanged.

The Chittagong Stock Exchange also rose yesterday, increasing by 14.91 points, or 0.17 per cent, to 8,319.7.

Of the total 256 companies listed with the port city bourse, 105 advanced, 101 dropped and 50 remained unchanged.