Insurance stocks a double-edged sword for investors
Stocks of almost all non-life insurance companies have more than doubled over the past year while the benchmark index of the Dhaka Stock Exchange (DSE) rose 38 per cent.
At least two insurance companies saw their stock prices grow over five times the original value while it was three to four times for 17 others, shows the DSE data.
However, this rise in value is not supported by an increase in earnings.
For example, Provati Insurance surged eight times from its original value but declared only 17 per cent stock dividend for 2020. The company's earnings per share rose 85 per cent to Tk 1.26 in the first quarter of 2021.