Life insurance companies are likely to increase their capital market exposure by investing their idle funds in primary shares and have decided to request the capital market regulator to allot a quota of the primary shares for them.
Leaders of the Bangladesh Insurance Association are scheduled to sit with the Securities and Exchange Commission today to discuss the issue, said BIA sources.
The country’s 17 life insurance companies at the moment have a total investment of Tk 1,075 crore in the stock market, while Tk 3,875 crore more are lying idle that can be invested in stocks.
‘As per the rule, life insurance companies can invest up to 70 per cent of their deposit, of which a maximum of 30 per cent can be invested in securities,’ said Sandhani Life Insurance Company managing director Ahsanul Islam.
‘Against the backdrop of the liquidity crisis in the capital market, we have decided to increase our capital market exposure as we have found the price level lucrative enough,’ said Ahsanul, who is also a senior vice-president of the Dhaka Stock Exchange Ltd.
‘At present, we are looking forward to the primary market as operating in the secondary market will require more logistic support,’ he said.
The capital market of the country has been suffering from a severe liquidity crisis for long. To solve the problem, the SEC sat with the stakeholders, who suggested increasing capital market exposure of insurance companies as they had plenty of idle reserves.
News SourceLeaders of the Bangladesh Insurance Association are scheduled to sit with the Securities and Exchange Commission today to discuss the issue, said BIA sources.
The country’s 17 life insurance companies at the moment have a total investment of Tk 1,075 crore in the stock market, while Tk 3,875 crore more are lying idle that can be invested in stocks.
‘As per the rule, life insurance companies can invest up to 70 per cent of their deposit, of which a maximum of 30 per cent can be invested in securities,’ said Sandhani Life Insurance Company managing director Ahsanul Islam.
‘Against the backdrop of the liquidity crisis in the capital market, we have decided to increase our capital market exposure as we have found the price level lucrative enough,’ said Ahsanul, who is also a senior vice-president of the Dhaka Stock Exchange Ltd.
‘At present, we are looking forward to the primary market as operating in the secondary market will require more logistic support,’ he said.
The capital market of the country has been suffering from a severe liquidity crisis for long. To solve the problem, the SEC sat with the stakeholders, who suggested increasing capital market exposure of insurance companies as they had plenty of idle reserves.
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