For the first half of 2021, the general insurance sector was the best performer with a 43 per cent return while the jute sector was the worst performer losing about 30.60 per cent due to speculation besides travel & leisure and paper & printing with their return shedding 17.50 per cent and 3.0 per cent respectively.
The share prices of 26 general insurance companies more than tripled during the first half of 2021. Market analysts believe these overvalued stock will put the whole stock market at risk as investors are blindly buying these without carrying out a proper analysis behind their in value.
With their profit margins being out of proportion to their rise in share prices, a low performance among these companies will shake investor’s confidence indicating a lower monitoring capability of the market.
Sonali Life Insurance was among the most traded stock besides Beximco Ltd at Tk120 Crore and topping the gainer’s list rising 440 per cent besides Paper Processing & Packaging, Tung Hai Knitting, Tamijuddin Textiles and CVO Petrochemical Refinery.
The government’s announcement to set insurance agents’ commission at 15 per cent have increased their profit margins according to a leading broker.