Pragati Life shares in free fall

Recently skyrocketing Pragati Life Insurance shares extended their correction to the sixth straight session on the Dhaka Stock Exchange (DSE).

As the selloff sharpened on Tuesday, the stock fell by 9.99% to Tk125.3 and hit the lowest price point allowable for the session, which is called the bottom circuit.

There had been no corporate disclosure that could have triggered the selloff in the stock, which had been sharply leading the moderate life insurance sector rally in the Dhaka and Chattogram bourses in recent weeks until they entered a price correction phase last week.

The overall life insurance sector's market capitalisation on the DSE declined by 0.9% on Tuesday.

In response to a query earlier in January, the company said it had no undisclosed price sensitive information that was fueling its stock price then.

Pragati Life's shares had a sharp hike up to TK167 on 26 January, from Tk67 on 2 November.

Other life insurers in the last leg of upswings neither gained that much nor faced such a sharp correction that panicked average investors.

On Tuesday, many retail investors in Motijheel complained about suspected price manipulation in Pragati Life shares, both during the rise and fall.

Pragati Life Insurance was established in 2000 and went public in 2006.

Sponsor-directors hold 38.7% of the company, which has a paid-up capital of Tk32.54 crore. The general public owns 31.07% of the shares, while institutional investors hold 30.56%.

At the end of September 2022, its total life fund stood at Tk611.8 crore. 

DSEX inches up

Meanwhile, the stock market on Tuesday recovered the early-hour sell offs and equity indices inched up at the end.

In continuation to the previous two days' corrections, the market faced selling pressure. But the buying appetite for some company shares that showed earnings growth helped the market recover.

DSEX, the broad-based index of the DSE, closed 0.07% higher at 6,285.

Blue-chip index, DS30, also increased by 0.26% to 2,234.

Only 29 shares closed higher while 141 declined and during the closing bell, 308 DSE scrips were stuck either at the floor or the bottom circuit.

Number of scrips having active bidders dropped to 94 on Tuesday, from 114 on Sunday.

The bearish market reduced investors' participation in trading and the DSE turnover on Tuesday declined to Tk553 crore, from Tk580 crore in the previous session.