bank-building
Just before the meltdown of our stock market, two years back, anyone u asked about a buy item would have suggested for Bank Sector.During that period of Mr Shakil Rizvi as chairman of DSE, Stock of Bank acted like a genie in a bottle.Shares of Banks were like miracle for everyone on that particular market until the big catastrophe of December 2010.And believe it or not, after the disaster Bank Sector became the number one enemy of small investors.Everybody blamed and cursed those Bankers for selling their shares at the peak.Of course, those allegations mady by small investors are legitimate because they lost their Equity.But in capital market things can change dramatically, specially in Bangladesh market where, people buy shares of a company like FASFIN that showing loss continuously in their account.We take hard decision to quit this business after realising huge loss.In the next week we forget everything after watching a bull run of market.We find new light of hope as quickly as we get depressed of watching falling index.
Whatever, we can not forget the importance of Bank Sector over our Economy as well as on our Stock Market.A sector that contains 30 Banks with huge amount of paid up capital does surely have an impact on our Capital Market.
Now, lets have a look in some statistics of current market. Here is the latest Sectorwies P/E :
| Sector name | P/E Ratio | Sector Cap | Sector Earning |
|---|---|---|---|
| Bank | 9.23 | 470,558,393,726 | 50,982,161,125 |
| Financial Institutions | 22.81 | 167,203,793,087 | 7,328,711,321 |
| Engineering | 17.33 | 80,727,237,465 | 4,657,552,829 |
| Food & Allied | 13.77 | 52,542,340,889 | 3,815,357,546 |
| Fuel & Power | 11.73 | 201,747,210,815 | 17,201,544,558 |
| Jute | 44.61 | 436,279,200 | 9,779,627 |
| Textile | 12.15 | 43,834,093,272 | 3,609,141,537 |
| Pharmaceuticals & Chemicals | 19.57 | 158,650,666,180 | 8,105,570,563 |
| Services & Real Estate | 27.63 | 10,925,337,917 | 395,476,113 |
| Cement | 13.22 | 38,367,736,995 | 2,901,678,637 |
| IT Sector | 12.90 | 2,736,941,552 | 212,155,621 |
| Tannery Industries | 17.96 | 11,232,969,000 | 625,576,640 |
| Ceramics Sector | 27.21 | 24,582,850,278 | 903,528,756 |
| Insurance | 21.90 | 82,559,721,600 | 3,769,043,125 |
| Miscellaneous | 6.43 | 40,362,469,723 | 6,279,234,440 |
| Paper & Printing | 27.42 | 423,700,000 | 15,453,333 |
| Telecommunication | 14.54 | 289,437,798,569 | 19,906,720,453 |
| Travel & Leisure | 11.06 | 25,425,200,000 | 2,299,600,000 |
As you can see above, there are only two sector with P/E under ten (10) and they are “BANK” (9.23) and “Miscellaneous” (6.43).So, Bank sector is the second lowest P/E (9.23) holder at the moment in the market where Overall Market P/E (excluding. z,otc) is 12.79.
Already, we have seen news paper add about the investment of some renowned Banks like, National Bank, Pubali Bank, NCC Bank, Exim Bank and Standard Bank.Although, question was raised about the intention of these type of paper adds and SEC reacted very soon to stop those adds.
Still, the fact is you can not move the Index for a long uptrend unless you have those Banks beside you.At the present situation, DSEGEN have no other choice but a long run to reach 5000 again.If thats gonna happen then, you need Bank Sector to play a big role.
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