Insurance stocks surge on paid-up capital speculation

FE Team | Published: November 06, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
Stock prices slightly declined Monday on the Dhaka Stock Exchange (DSE) is the investors decided to exercise caution following the suspension of trading of Rupali Bank shares.
The DSE management decided that the trading of the Z-category Rupali Bank share would remain suspended both in spot and public markets until further order due to its price volatility.
The closing price of Rupali Bank was Tk 2904.25 Thursday, the last trading day of the issue.
Meanwhile, most of the insurance issues, irrespective of their fundamentals, marked significant rise on the day on a rumour on enhancement of paid up capital of insurance companies.
The share prices of Z-category insurance issues-Asia Pacific Insurance, Delta Life Insurance, Janata Insurance and Prime Insurance- rose 12.50 per cent, 7.11 per cent, 13.99 per cent and 18.83 per cent respectively.
Most of the other insurance issues under A and B categories also recorded significant rise while the lone N-category insurance issue-Paramount Insurance- climbed 13.92 per cent at Tk 135.00 per share.
Being concerned by the whopping rise of the insurance issues, the DSE management contacted with the office of Controller of Insurance.
"The office of the Controller of Insurance has informed over telephone that, there is a proposal for enhancement of the paid up capital of insurance companies. But it is subject to approval by the Council of Advisers. As such investors are requested to make their investment with caution and should not be guided by mere speculation as the proposals may or may not be accepted by the Council of Advisers," a DSE news on its website said.
Social Investment Bank Ltd (SIBL), a Z-category issue became the second top turnover leader with shares worth Tk 100.43 million were traded on the news that the bank came out of 'problem bank' status.
The news propelled the price of the SIBL to Tk 524 per share. However, it closed at Tk 496.50, a 1.24 per cent down against the previous day.
BRAC Bank was the top turnover leader with shares valued at Tk 109.23 million traded while Trust Bank, Power Grid and Eastern Bank grabbed the third, fourth and fifth position respectively.
DSE General Index or DGEN, DSE 20 and All Shares Price Index or DSI shed 1.46 points, 9.36 points and 5.39 points respectively to close at 2870.30, 2220.93 and 2438.57.
Shares worth Tk 1.97 billion was traded on the day with the total market capitalisation of Tk 700.31 billion.
Out of 224 traded issues, 92 gained, 114 declined and 18 remained unchanged.