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#1 Thu Jul 03, 2014 1:46 pm
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Member
Registered: Dec 2013
Posts: 31
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insurance sector is still virgin in nepal and holds huge prospects ahead for its booming bussiness with growing economy. well we still need to be aware of bad reputation and low performance companies of some non-life insurance and also overvalued companies.
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#2 Thu Jul 03, 2014 12:51 pm
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Member
Registered: Jun 2013
Posts: 56
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Ya i also feel that insurance sector is overvalued. Need a serious correct. I agree with buffet jee logic that some kheladi is playing with these scripts and we small investors are becoming fool.
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#3 Thu Jul 03, 2014 10:41 am
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Member
Registered: May 2014
Posts: 206
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There are many reasons for the boom in the insurance sector. 1. Low paid up capital is the main reason in behind. As there is chances of increment in capital the shareholder will get bonus. Price of share mainly depends on future earning probability rather than current earning. 2. As society is advancing to the modernization, the business of insurance grows. growth of company definitely increase the share price 3. Limited number of share is the another reason. Limited number of share creates the scarcity hence price goes up. 4. As new hydro project is coming, these are to be insured. the premium paid by them is the profit of insurance. there is higher chances of profit of insurance and their share. single hydro project pay the premium of around 1 crore and the chances of claim is less. for the company having paid up capital of Rs. 25 crore, a single insurance can bring a lot profit. 5. People these days are convinced to be insured for better future. so insurance business is booming. 6. Insurance is almost guaranteed return generating company and the profit goes inclined due to reinsurance and new insurance. 7. Large number of Banks are allowed to invest in insurance sector which are few in number.
and so on.....
Now I convinced insurance sector goes up till capital reaches 200 crore. PE up to 150 is OK in this situation...
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#4 Thu Jul 03, 2014 9:42 am
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Member
Registered: Dec 2013
Posts: 31
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Sahi kura uthaunu vahyo buffetji. it is really worrying for some of non-life insu. as mentioned glicl slicl alicl in this bubble stage. i guess open marketma sabaibhanda naramro pakshya yo nai ho jasto lagcha. prices should be based firstly on performance rate n return as well as directors n promotors image should be considerd highly. mero bicharma e tin kurako balancele price determine garnuparcha nata ki e tinma kunai ekle matra.
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#5 Thu Jul 03, 2014 8:43 am
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Member
Registered: May 2014
Posts: 237
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buffet ji, you are absulately right. i worry for the same.
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#6 Thu Jul 03, 2014 8:17 am
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Member
Registered: Jun 2013
Posts: 144
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My question to all investors is " Is insurance price is bubble now". Note it most of insurance compamies P/E is above 100. Does earning of these companies justify price?? Not only dividend paying companies but non dividend paying companies price are increasing significantly for example gurans, surya life, asian life etc. Can expect only 10% around dividend from these companies next year. So why people are jumping for these stock which is overly priced right now. There might me reason that due to limited number of share manipulator or so called kbeladi of stock market are playing with the price. Now they cant control the price of banking stock due to over supply. Please investor be carefull before investing. Otherwise this insurace stock can be reason for another market crash. Every stakholder needs to be careful now.
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#7 Wed Jul 02, 2014 10:08 pm
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Member
Registered: Jun 2014
Posts: 28
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