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The Financial Express

Share prices of two insurers soaring sans PSI

| Updated: April 21, 2021 11:12:58


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The share prices of two non-life insurers --- Desh General Insurance Company and Federal Insurance Company - are soaring without having any undisclosed price sensitive information (PSI).

Share price of Desh General Insurance continued to rise as its share price jumped 247 per cent or Tk 24.70 each in the past 14 trading days since made trading debut on March 29 this year.

The newly listed general insurer's share closed at Tk 34.70 on Sunday, gaining 3.89 per cent further over the previous session.

Following the 'abnormal' price hike, the Dhaka Stock Exchange (DSE) served show-cause notice on the company.

The company, however in a knee-jerk response informed the DSE on Sunday that there is no undisclosed material decision/information relating to the company's business operation/profitability for recent unusual price hike of shares of their company.

Even after being served show-cause notice, the company's share price has not stopped rising, soaring 3.89 per cent further on Sunday, which will hit innocent investors, said an analyst at a leading brokerage firm.

He advised investors to make their investment decisions based on company's fundamentals, technical analysis, price level, disclosed information and avoid rumor-based speculations.

Desh General Insurance raised Tk 160 million by issuing 16 million ordinary shares at face value of Tk 10 each under the fixed price method to invest in the capital market, fixed deposits and treasury bonds.

The company has reported profit after tax of Tk 19.99 million and basic earnings per share (EPS) of Tk 0.83 in nine months for January-September 2020 as against profit after tax of Tk 19.82 million and basic EPS of Tk 0.82 for the same period of the previous year.

However, post-IPO EPS would be Tk 0.50 for January-September 2020.

The company's paid-up capital is Tk 400 million and authorised capital is Tk 1.0 billion, while the total number of securities is 40 million.

The sponsor-directors own 60 per cent stake in the company, while institutional investors own 16 per cent and the general public held 24 per cent shares as on December 31, 2019 (year-end), the DSE data showed.

Desh General Insurance disbursed 12 per cent cash dividend for the year ended on December 31, 2019.

Share price of Federal Insurance also jumped 47 per cent within 10 trading days without any undisclosed price sensitive information.

Its share closed at Tk 25.50 each on Sunday, losing 0.78 per cent over the previous session.

Following the 'unusual' price hike, the DSE also served show-cause notice on the company.

The company echoed the same as Desh General Insurance: "There is no undisclosed material decision/information relating to the company's business operation/profitability for recent unusual price hike of shares of their company".

The company's paid-up capital is Tk 676.57 million and authorised capital is Tk 1.0 billion, while the total number of securities is 67.65 million.

The sponsor-directors own 38.26 per cent stake in the company, while institutional investors own 2.80 per cent and the general public held 58.94 per cent shares as on February 28, 2021, the DSE data showed.

The general insurer, which was listed on the DSE in 1995, disbursed 5.0 per cent cash dividend for the year ended on December 31, 2019.

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