Stocks gain for third day as insurance shares surge

Stocks posted gains for the third straight session on Thursday as optimistic investors kept their buying binge on selective shares, particularly in the insurance and banking sectors.
More than 100 shares witnessed price surge in a single-day after a long time while issues from insurance and banking sectors helped the market stay afloat.
Insurance stocks have absorbed selling pressure in the last few weeks. As these shares are now in a buying position, investors rushed to snap them up in anticipation of quick capital gain, market operators say.
Consequently, four insurers made their way into the top ten gainers' list, with Union Insurance surging 9.90 per cent to become the highest gainer, followed by Paramount Insurance, Northern Insurance and Pragati Life Insurance.
During this higher interest regime, many investors found oversold insurance stocks lucrative, said a stockbroker.
He noted that higher interest generally helps increase the cash-surplus insurance industry's financial income.
From the banking sector, Midland Bank, Rupali Bank, Prime Bank and Pubali Bank saw price surge ranging between 0.78 per cent and 5.31 per cent on the Dhaka bourse.
Due to higher interest rates, banks are likely to see deposit growth and an increase in profitability in the months to come, said the stockbroker.
On the other hand, the stockbroker feared, this would gradually wipe out the liquidity of the capital market as investors might divert their investment to fixed-income assets to take advantage of the rising interest rate.
On the day, Dhaka Stock Exchange (DSE) opened on a positive note and the upbeat note sustained until the end of the session as buyers dominated sellers across the trading floor with no sign of reversal.
Finally, the benchmark DSEX index went up by more than 13 points and settled at 6,269, extending the winning streak for the third straight day. The DSEX added nearly 40 points in the three trading days.
The DS30 Index, which consists of blue-chip companies, saw a fractional gain of 0.15 point to close at 2,141 and the DSES index, which represents Shariah-based companies, gained 1.17 points to 1,358.
Stocks extended gain owing to the continuous buy dominance of buoyant investors as they chased sector-specific beaten-down issues with quick gain potential, commented EBL Securities.
Moreover, some insurance stocks regained momentum owing to the buying appetite of short-term gain-focused investors with positive expectations, said the stockbroker.
However, confidence of most investors remained subdued as the market yet to show any positive trigger to bounce back strongly amid a bleak macroeconomic environment and rising political tensions, it added.
Turnover, a crucial indicator of the market, remained steady as the market turnover stood at Tk 4.18 billion, down 3 per cent from the previous day's tally of Tk 4.30 billion.
Investors were mostly active in the general insurance sector, which accounted for 23.4 per cent of the day's total turnover, followed by food and pharmaceuticals.
Most of the traded issues saw price appreciation, as out of 308 issues traded, 112 advanced, 31 declined and 165 remained unchanged on the DSE trading floor.
Among the sectors, jute posted the highest gain of 4.3 per cent, followed by general insurance (2.90 per cent), paper & printing (1 per cent) and banking (0.20 per cent).
Small-cap Fu-Wang Food became the most-traded stock with shares worth Tk 276 million changing hands, closely followed by Sea Pearl Beach Resorts, Union Insurance, Deshbandhu Polymer and Republic Insurance.
The Chittagong Stock Exchange (CSE) also ended higher with the CSE All Share Price Index (CASPI) gaining 29 points to settle at 18,545 and its Selective Categories Index (CSCX) rising 17 points to close at 11,087.

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