Insurance sector price rise

Rajesh Sharma

I think, only a small percentage of Insurance sector share is with public. Now, a large umber of shares have been purchased by BFI's. The increase in insurance sector share is the result of high liquidity in BFIs, sponsored buying by BFI securities managers from big investors, good return from insurance companies to distribution of profit after actuarial evaluation, prospects of right shares due to need to increase paid up capital and large market expansion possibilities for insurance sector. Therefore, the increase is due to natural as well as doctored factors. I also believe that being selective in companies holding insurance sector shares would be good. Otherwise, it may create something unthinkable scenario in future, particularly when excess liquidity in BFIs dries out and they start selling insurance shares in panic mode.

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