PE ratio at DSE drops 1.03%

As the country’s capital markets are on the downswing along with falling share prices of most of the companies, the overall PE (price-to-earnings) ratio of the Dhaka Stock Exchange (DSE) also fell by 1.03 percent last week.

At the end of last week, the DSE’s overall PE ratio is now down by 0.15 points to 14.47 from the previous week’s 14.62.

Meanwhile, the PE of the four sectors — banking, pharmaceuticals and chemicals, miscellaneous, and power and energy — ended below the overall ratio.

The banking sector now has the lowest PE ratio with 7.80, which was at 7.90 a week ago.

The fuel and power sector is next with 11.60 PE ratio. One week ago, the sector’s ratio was 11.70.

The PE for miscellaneous sector now stands at 12.10 at the end of the week, up from 12 in the previous week.

The current PE ratio of pharmaceuticals and chemicals sector is 13.50, down from 13.60 points in the previous week.

On the other hand, the life insurance sector has the highest PE. The PE of this sector sands at 67.70 points, which was at 70 a week ago.

The leather sector ranks second on the list of highest PE ratio. The PE of this sector stood at 52.50 points. The ceramic sector is in third place with 35.10.

Besides, PE ratio of general insurance sector stands at 16.40, engineering sector at 19.90, cement sector at 24.90, and IT sector at 26.30.

The PE in the services and real estate sector stood at 17.80 points, non-banking financial institution sector at 21 points and the PE of the food sector at 24.60 points during the week.

In the stock market, 10-15 PE is generally considered risk-free. If a company’s PE falls below 10, the company’s share price is devalued or considered safe for investment.