Insurance stocks up on third losing day for DSEX

Equity indices on the Dhaka and Chattogram bourses closed lower for the third consecutive session as cautious investors kept booking some of their recent quick profits amid the uncertainties related to the upcoming national budget.

DSEX, the broad-based index of the Dhaka Stock Exchange (DSE), closed 0.05% lower at 6,260 on Monday.

However, the downward momentum seemed to have slowed down on Monday as there were some positive updates regarding fresh fund inflows.

Capitec Asset Management announced a Tk200 crore closed-end mutual fund sponsored by Grameen Bank on Sunday, while the Capital Market Stabilization Fund planned to disburse Tk250 crore in loans among market intermediaries.

Meanwhile, non-life insurers stole Monday's show as their share prices surged after a long depression near the floor.

Stock brokers said during the dividend season many investors poured their free cash into oversold non-life insurance stocks counting on a decent 3%-4% dividend yield alongside the hope for some capital gains and that triggered a spark in demand for the stocks.

The dividend yield is the percentage of return from dividends against the cost of owning a stock.

Except for Emerald Oil and Trust Life Insurance, all the top 20 gainers in the Dhaka Stock Exchange (DSE) were non-life insurance stocks on Monday. Some including Paramount Insurance, and Crystal Insurance had no seller at the maximum allowable price for the day, technically called the upper circuit. 

Most of the non-life insurers have their record date in May, and on the record date, no trade of the stock takes place on the bourses while companies identify their shareholders for the entitlement of dividends and annual general meeting participation.

DSE's blue-chip index DS30 and Shariah index DSES closed 0.2% lower as short-term investors have been trying to book profits from large-cap stocks for the last week. Also, the recently rallied small-cap stocks faced a price correction on Monday.

Turnover in the premier bourse increased to Tk653 on Sunday from Tk636 in the previous session. 

Some 70 scrips advanced, and 84 declined in the DSE.

On the sectoral front, food, non-life insurance and IT contributed the maximum 14%, 12.9% and 9.5% to the DSE turnover.

Most of the sectors displayed negative returns, out of which jute, travel and IT led the losers with 5.8%, 2.2% and 0.8% decline in their respective market capitalisation. 

Indices at the Chattogram Stock Exchange also closed lower while turnover in the premier bourse declined 32% to Tk8 crore.