Investors can’t snap up enough pharma stocks

Pharmaceuticals turned out to be the most attractive sector in the stock market yesterday thanks to the continuation of the industry's solid business amid the coronavirus pandemic.

Turnover in the sector amounted to Tk 51.94 crore, which was about 46 per cent of the total, according to Dhaka Stock Exchange (DSE) data.

Though the overall market scenario is still gloomy, the pharmaceutical and insurance sectors were able to draw some attention of investors, said a stockbroker.

This is because the drug makers were the only companies that kept on going strong during the government-announced leave to contain the pathogen, he said.

"Telecom and online-based companies were also continuing their business, so these sectors were also on the top of the demand side," he added.

Beacon Pharma topped the turnover chart yesterday with trade worth Tk 12.74 crore, followed by Beximco Pharmaceuticals, EXIM Bank, Orion Pharmaceuticals and Progressive Life Insurance, according to DSE data.

A top official of a merchant bank said pharmaceuticals and telecom were the only sectors whose products were required by people even during the pandemic.

"So stock prices of these companies remained strong compared with the other sectors," he said.

DSEX, the benchmark index of the DSE, went up 7.15 points, or 0.17 per cent, to stand at 4,001.81.

The pressure brought on by the demand for purchasing stocks of life insurance, general insurance, and pharmaceuticals sectors helped the index gain marginally, according to a top official of a leading stockbroker.

This purchase pressure on insurance sector continued on the back of the stock market regulator's instruction to comply with a minimum 2 per cent shareholding of directors, he said, adding that 14 insurance companies failed to comply.

Investors are taking a position on these stocks with the expectation that directors of these companies would start buying shares to comply with the BSEC's instruction, the broker added.

Paramount Insurance topped the gainers' list that rose 9.98 per cent followed by United Insurance, Rupali Life Insurance Agrani Insurance and Meghna Pet Industries.

Khaleque Pathan, a stock investor, said the market was still illiquid due to the existence of the floor price, so most of the stocks had not been traded.

On May 19, the Bangladesh Securities and Exchange Commission set the floor price of all stocks based on the average price of the previous five days to stop the index from falling further amid the pandemic.

But companies whose products retained their appeal during the pandemic were the only ones to be able to attract the investors, Pathan added.

Turnover, another important indicator of the market, fell 7.7 per cent to Tk 139 crore on the DSE board compared with the previous day.