Investment Analysis on the Insurance Industry of

Bangladesh.

By,

Zaif Khan Ahon

Institute of Business Administration,

University of Dhaka.

Date: December 03, 2017

Executive Summary

This paper has been produced to give an idea of the selection procedure of stocks based on
their required rates of return. This technique is applicable to real world scenario where there
are many projects with similar risks. Finding the one with the highest return is crucial to an
investor’s success and this is what the paper aims to determine.

At first, an introduction is provided so as to familiarize the reader with the concept of the paper.
Then, an industry overview is given so that we have a clear perception on the condition of the
industry. What follows next is a brief summary of five companies chosen from the industry.

The primary findings have been compiled in the “Findings” section. The results from this
section are used to interpret and reach to the final conclusion in the “Interpretation” section.
All other data that have been used to derive these results have been affixed in the Appendix
section. Please refer to them for a better understanding of how the results are obtained.

All the figures are in Bangladeshi Taka (BDT).

Table of Contents
1. Introduction ............................................................................................................................ 1
1.1 Objectives ........................................................................................................................ 1
1.2 Scope ................................................................................................................................ 1
1.3 Methodology .................................................................................................................... 1
1.4 Limitation ......................................................................................................................... 2
2. Brief Overview....................................................................................................................... 2
3. Economy Analysis ................................................................................................................. 3
4. Industry Analysis ................................................................................................................... 5
4.1 Industry Overview ........................................................................................................... 5
4.2 Prospects of Insurance Business in Bangladesh: ............................................................. 6
4.3 Problems of Insurance Industry in Bangladesh: .............................................................. 8
5. Company Overview ............................................................................................................. 11
5.1 Green Delta Insurance Company Limited ..................................................................... 11
5.2 United Insurance Company Limited .............................................................................. 11
5.3 Rupali Insurance Company Limited .............................................................................. 12
5.4 Agrani Insurance Company Limited .............................................................................. 12
5.5 National Life Insurance Company Limited ................................................................... 13
6. Findings................................................................................................................................ 13
7. Conclusion ........................................................................................................................... 14
8.0 Reference ........................................................................................................................... 16
9. Appendix .............................................................................................................................. 17
9.1 Excel Calculations for United Life Insurance Company Ltd......................................... 17
9.2 Excel Calculations for Green Delta Insurance Company Limited................................. 18
9.3 Excel Calculations for Rupali Insurance Company Limited ......................................... 19
9.4 Excel Calculations for Agrani Insurance Company Limited ......................................... 20
9.5 Excel Calculations for National Life Insurance Company Limited............................... 21
1. Introduction
1.1 Objectives
• To relate the basic financial terms and equations with the practical industrial activities
• To be able to calculate the Weighted Average Cost of Capital (WACC)
• To rank different company stocks according to their required rate of return
• To select projects based on the Capital Asset Pricing Model (CAPM)

1.2 Scope
• WACC of the five companies within the industry
• Required rate of return for each of the companies
• The Security Market Line (SML) showing the position of the companies based on their
riskiness and required rate of return
• Final decision as to which will be the best company to invest in

1.3 Methodology
A detailed step-by-step procedure is given to show how the paper has been prepared.

• The monthly closing prices of the company stocks are taken for 5 years, from 2012 to
2016. The cash dividends paid by the companies are also considered.
• The market closing prices are taken for the same time frame. So there are 60 data sets.
• Return from the stocks is calculated using the formula,
Rt = ((Pt – Pt-1) + Dt) / Pt-1 Where, Rt= Return from stock at time t ; Pt= Closing price
at time t ; Pt-1= Closing price at time (t-1) ; Dt= Dividends paid at time t
• Return from market is calculated in a similar manner excluding the dividends paid.
• The average monthly market return and hence the average annual market return, Rm
calculated. This Rm is the market return that is to be used in CAPM equation.
• Beta is calculated using the slope of monthly stock returns vs market returns. This is
the levered beta as this contains a mix of equity and debt financing.
• The unlevered beta is obtained using the equation, ΒUL = BL / (1 + (B/S) (1-t)) Where,
ΒUL= Unlevered beta; BL= Levered beta; B/S= Debt to equity ratio; t= Corporate tax
rate
• ΒL is used to find the required rate of return, Rj using the CAPM equation,
Rj = Rf + (Rm- Rf) BL Where, Rf= Risk-free rate of return
• This Rj is the cost of equity capital, which is used in determining WACC.

1|Page
 • The cost of debt capital is calculated by dividing interest paid by the total debt of the
company for the latest year. This is then multiplied with (1-t) to account for the after-
tax cost of debt.
• WACC is determined by, WACC= WE * kE + WD * kD + WP * kP
Where, Wj = proportion of equity / debt / preferred dividend financing and kj = cost of
equit / debt / preferred dividend Since none of the companies within our industry
finance their funds using preferred dividend, the last term of the equation (WP * kP) is
zero.
• The security market line is drawn for various levels of beta. The average stock returns
are then plotted in the graph. Based on the position of the stocks, final decision is taken
as to which of the stocks should be invested in.

1.4 Limitation
Some values were missing from the annual reports. So, we had to back calculate and reach to
their actual values. As a result, precision was lost to some extent.

2. Brief Overview
Investment analysis is a broad term that encompasses many different aspects of investing. It
can include analyzing past returns to make predictions about future returns, selecting the type
of investment vehicle that is best for an investor's needs or evaluating securities such as stocks
and bonds for valuation and investor specificity.

When making investment decisions, investors can use a bottom-up investment analysis
approach or top-down approach. Bottom-up investment analysis entails analyzing individual
stocks for their merits, such as valuation, management competence, pricing power and other
unique characteristics of the stock and company. Bottom-up investment analysis does not focus
on economic cycles or market cycles firsthand for capital allocation decisions but instead aims
to find the best companies and stocks regardless of economic, market or particular industry
macro trends. In essence, bottom-up investing takes more of a microeconomic approach to
investing rather than a macroeconomic one, which is a hallmark of top-down investment
analysis.

In this report we have conducted a bottom-up investment analysis and measured the stock
performance of United Life Insurance Company Ltd, Green Delta Life Insurance, National Life
Insurance, Rupali Life Insurance Ltd and Agrani Life Insurance Ltd to explore the industry
attractiveness and also to make a decision on which are the best companies in this industry.

2|Page
The Capital- Asset Pricing Model (CAPM) has been used to calculate the return of the stocks
and the financial statement analysis of all the companies have allowed us to get a
comprehensive idea about the financial performance of all the companies in question. The
report also includes an informed opinion about the most attractive stocks in this particular
industry for a potential stockholder. We hope that that our work in this paper is a sufficient
demonstration of our understanding of investment analysis as taught to us in the financial
management course.

3. Economy Analysis
Bangladesh has shown remarkable macroeconomic resilience, and its economy has grown
steadily over the past five years. Nonetheless, overall entrepreneurial activity is disadvantaged
by an uncertain regulatory environment, poor infrastructure, and the absence of effective long-
term institutional support for private-sector development.

• 2016 Economic Freedom Score: 53.3 (down 0.6 point)

• Economic Freedom Status: Mostly Unfree
• Global Ranking: 137th
• Regional Ranking: 29th in the Asia–Pacific Region
• Notable Successes: Management of Public Finance
• Concerns: Rule of Law and Open Markets
Economic development remains hampered by the fragile rule of law. Corruption and marginal
enforcement of property rights have driven people and enterprises out of the formal sector. The
government’s inability to provide basic public goods further limits opportunities for business
development and job growth.

The Gross Domestic Product (GDP) in Bangladesh expanded 7.05 percent in 2016 from the
previous year. GDP Growth Rate in Bangladesh averaged 5.72 percent from 1994 until 2016,
reaching an all-time high of 7.05 percent in 2016 and a record low of 4.08 percent in 1994.

Bangladesh had exports worth $34.42 billion for the financial year 2015-16, which is an all-
time yearly high. It mainly exports textiles, leather goods, processed and frozen food, and jute
products to primarily the United States, Germany and the United Kingdom. Imports totaled
$40.69 billion for the financial year 2014-15, with the main imports being cotton, petroleum,
machinery and equipment, iron, steel and automobiles from mainly China and India. (Business
Standard)

3|Page
Bangladesh's growth was resilient during the 2008 - 2009 global financial crisis and recession.
Bangladesh had the best performing stock market in Asia during that time due to relatively low
correlations with developed country stock markets. (Daily Financial Times)

Bangladesh is a labor surplus country with a population of 156 million. Labor force
participation rate is increasing every year and is now at 59.3 percent. The increase in labor
force is mostly due to increase of female labor which is now at 36 percent. Under employment
rate is at 20.3 percent and unemployed rate is 4.5 percent as of 2014 (Bangladesh Bureau of
Statistics)

Bangladesh is classified as a Next Eleven economy. The Next Eleven are countries identified
by Goldman Sachs as having a high potential of becoming, along with BRIC economies, among
the world's largest economies in the 21st century based on macroeconomic stability, political
maturity, openness of trade and investment policies, and quality of education. Bangladesh is a
member of SAFTA (South Asia Free Trade Area), BIMSTEC (Bay of Bengal Initiative for
Multi-Sectorial Technical and Economic Cooperation) and SAARC (South Asian Association
for Regional Cooperation).(The Financial Express)

It is safe to say that the economy is doing well. Yet, the sentiment does not resonate across the
country. Time and again the economy has been slowed down from its accelerated growth by a
vicious cycle of political turmoil, corruption, religious extremism, and natural calamities.
Foreign Direct Investment is not at the anticipated level as political uncertainty prevails.
Despite the abatement of political turmoil for some time now, businesses are still shaky. Even
with the declining interest rate, bankers are sitting with huge reserves in want of borrowers;
they simply do not see the enthusiasm they had witnessed among the business community
several years ago. The sector currently has a surplus liquidity amounting to over BDT 1,000
billion.

For instance, five years ago private sector credit stood at around 26 percent. Now, it has
slumped to 14.19 percent in 2015-16, but this is a 3-year high. In fiscal 2010-11, private
investment as a percentage of GDP stood at 22.14 percent. In fiscal 2014-15, it was 22.07. The
stock market, which is often considered the barometer for a country's economic health, is not
going through a good phase either. The government and the central bank took ad-hoc measures
in the outgoing year to resuscitate the ailing market but to no avail. There is no sign of recovery
in the construction and the real estate sector has been going through a trough since 2011.

4|Page
Remittance, which is one of the lifelines of the Bangladesh economy and an important source
of foreign exchange reserves. Remittance reached 15.32 billion dollars in fiscal year 2014-15
but decreased to 14.93 billion dollars in fiscal year 2015-16.

4. Industry Analysis
4.1 Industry Overview
The life insurance industry has a bright future. It is the right business at the right time. It
provides protection, savings, and investment products and knowledge at a time when an aging
global population really needs help making wise choices to prepare for retirement. Even so,
success is not guaranteed. Insurers need to choose a robust strategy and counter market forces
that could limit their opportunity.

In Bangladesh, during the 1970s, government-owned JBC and SBC were the only provider of
life and general insurance coverage for individual and business properties. During that time
insurance products were very few in number and the industry did not take innovative efforts
for product development. In the country the first private insurance company was set up in 1985.
Since then non-government insurers have shown rapid growth in terms of institutional set-up,
policy design and business expansion. When non-government insurers gradually have gained
the foothold in the country, real competition in the sector has begun. However, the insurance
industry in Bangladesh is very small compared to its economy and the number of insurance
policyholders is still not increasing satisfactorily (Islam & Mamun, 2005). At present, there are
43 general (non-life) insurance and 17 life insurance companies are operating in Bangladesh
which are inadequate to provide insurance services to about 150 million people (BIA, 2000;
Ahmed, 1977; Siddiqui, Islam and Chowdhury, 1995).

While the global insurance market declined, Bangladesh has seen a visible growth over last
few years. Bangladesh insurance market is still small with a combined life and non-life
insurance market premium of US $960 million. The industry ranked 76th in the world with a
paltry 0.02% share in the global insurance industry. Per capita insurance spending is only US$
2.6. Insurance penetration (premium as a % of GDP) remains low at 0.9% (0.7% for life
insurance and 0.2% for non-life). The YoY average growth of non-life insurance companies
was 12%, and life sector grew at an impressive rate of 26% over last few years. 36% of the
general insurance market is captured by top four market leaders while life insurance market is
dominated by foreign company- MetLife Alico. The non-life market is branch driven and life

5|Page
market is agent driven. Though there are 57 commercial banks, they are not allowed to sell
bank assurance.

1Industry Average Stock Trends 2013-2017

4.2 Prospects of Insurance Business in Bangladesh:

There are many good signs for the insurance business in Bangladesh. The factors that can
facilitate the insurance business in our country are discussed below.

Large Population: There is a big opportunity for the insurance companies as the population of
our country is increasing day by day. The growth of population opens greater scope for every
kind of insurance business.

Micro Insurance for Poor and Rural People: Insurance services need to be redesigned to meet
the needs of different classes of people. We should have consistent product development to
meet emerging needs of the poorer class and the rural class. Distinctive product innovation
relevant to indigenous conditions of the poor and especially for the borrowers of micro-credit
is the need of the time. Micro insurance can be a great prospective area for the insurance
business in Bangladesh. Most of the people of the country are unable to have costly and long-
term insurance policies. Micro insurance can be provided to individual persons or to small
business owners against low insurance premiums and with easy terms and conditions. When
people will afford to minimize their risks at a lower price, more and more people will take that
opportunity. A huge portion of the society can thus be a prospective target market for this
business.

Investment Scope: Bangladesh has large scope of investment in trade, commerce and industry.
The insurance fund is now invested in government bonds, ICB projects, marketable securities,

6|Page
and FDR which are not much profitable. The private insurance companies are realizing this
fact. There are opportunities to enhance profit through effective and efficient money
management by employing capable and experienced personnel. There is scope of investment
expansion in the areas leasing, housing, health and money market.

Higher GDP: The GDP of our country is increasing which results in the increase of per capita
income. With the growth in the income more, people are now willing to take an insurance
policy for safeguarding themselves against any danger.

New Business’s Individual Insurance: There are so many new businesses starting every day
with a booming global demand. Every business is insured under an insurance company to
protect itself from any kind of accident. Therefore, the growth of industry, mills, and factories
is creating better scope for the insurance companies to flourish their business.

Extent of Market: There is a great scope of facility to explore the insurance market. The market
is big but a large part of it is still unexplored. The insurance sector should take step to introduce
innovative and diversified products to cover risk in the unexplored areas of the economy.

Government Aid: Government is the key player of all development. In order to boost the
growth of the insurance sector, the government should frame a liberal tax policy, reform the
legal structure and set up a strong regulatory body. Since the government is liable to ensure the
safety and security of people, it can obligate the people to take policy in some cases and also
attract investors in this sector.

7|Page
Developing Mass Awareness: People are now much more conscious about their safety and
security. Government and the industry can easily draw their attention regarding the significance
of insurance in their life so that they can be encouraged to take an insurance policy for making
their life free from any unexpected situation. The increase in literacy rate is also helping to
create awareness among the people regarding taking insurance policy. Besides, insurance
companies are also trying to alter the negative attitude of people towards insurance by
organizing various programs such as seminars, programs including social responsibilities etc.

Strict Application of Rules and Regulations: Due to strict application of rules and regulations,
anarchy is prevailing in this sector. The regulations should be aimed to reduce, not increase,
the problems of the insured and to protect them from any kind of deception. The Controller of
Insurance should closely monitor the insurance company’s functions and obligate them to
follow the current Insurance Act 2010. By enforcing law, this sector can come back in a
systematic manner.

Agriculture Sector: The economy of Bangladesh is predominantly agrarian, with most people
engaged in farming and fishing. The uncertainty of agriculture due to crop failure is caused by
climate variation, drought, cyclone, and flood and pests, which affect farmer income as well as
government revenue. Furthermore, in the last few years commercialization has occurred in
some sections of the agricultural sector. Increasing investment in the agricultural sector is
creating a new opportunity for the insurance industry. Various agricultural insurance services
are becoming common these days. Demand for insurance protection against crop loans,
livestock loans, fisheries loans and equipment loans are also increasing day by day.

4.3 Problems of Insurance Industry in Bangladesh:

The following problems of the insurance industry in Bangladesh are identified in the present
study:

Lack of Public Faith: Insurance agents are responsible for creating negative image of insurance
to the public. It shrinks the scope of insurance business. Poor public image is mainly
responsible for not expanding the sector. This opinion is held by 94.80 percent respondents in
the study.

Lack of Public Awareness: Mass illiteracy hinders the growth of the insurance sector. A vast
majority of people especially in rural areas are left outside the insurance coverage. This mainly
results from the look of awareness among the people. This problem is supported by 93.60% in
the study. Even a large portion of people in the country have no minimum idea about insurance.

8|Page
People are not aware of the benefits from the insurance policy and a good number of people
believe that insurance business is nothing but cheating and they assume that insurance policy
is quite unnecessary.

Centralization Policy: Most of the insurance companies in our country are located in urban
areas and there are few branches in rural areas. They think that they might have better
opportunities for their business in cites because the economic condition of the urban areas is
better than in the rural areas. They forget that the large number of our population reside in rural
areas. Thus, this centralization policy acts as an obstruction to the growth of insurance business
in our country.

Excessive Management Expense: Growing cost of business is a problem that insurance

companies are facing nowadays. Most of the second and third generation insurance companies
are facing the problem of excessive management expense that is much higher than the
prescribed limit. Currently there are ten or more tiers in the field level. This is unsustainable in
the long-run.

Political Instability: Sound and robust political environment is a pre-requisite for a country’s
development. Political instability is a serious problem for the insurance business. Moreover,
Bangladesh government formulates national policy, rules, and regulations on political
consideration that, too, restrict the normal growth of insurance in the country.

Lack of Supervision from the Government: Lack of surveillance from controlling agency of
government encourages many insurance companies to follow some unethical practices like
delay in claim settlement, harassment to policy holders and showing fake financial statement.
This is not only destroying the reputation of the insurance companies but also creates negative
impact in the mind of the people about insurance. This problem has been mentioned by 80.80%
respondents of the study.

Lack of Qualified Officials: Insurance companies perform their activities by recruiting

marketing agents. They try to convince the people to take a policy. Most of the agents are not
properly trained and they do not know the right process to catch potential policy holders. 68%
of people opined in the study that the insurance companies lack in efficient workforce.
Therefore, these field level agents are unable to fulfill their target.

Lack of Training for the Employees: Spread of insurance business in Bangladesh failed for
lack of proper training of the employees, especially the field employees of insurance

9|Page
companies. Still there is not enough training centers to provide proper training regarding
insurance activities for the officials of insurance company. This problem is cited by 81%
respondents of the study.

Lack of Exposure: Another main problem in the country is that the media is unconcerned to
send the right message regarding insurance to the people. As a result, a large segment of the
population is completely unaware about the insurance policy. Another problem is that the
insurance company does not provide adequate information in the company’s websites which
can meet the queries of their potential customers and encourage them to buy insurance policy.

Absence of Business Ethics: In a competitive market, some insurance companies use some
business tactics that violate the business standard and the provision of insurance acts. Some
insurance companies create harassment to the policy holders when they want back their money
after death or maturity. The insurance companies show different causes for not settling the
claim timely. Besides this, some field officials also often try to give false information to the
people for buying a policy. Such kinds of illegal acts create bad reputation to the insurance
companies and hinder the development of the overall insurance business in the country. Those
customers that are harassed by the insurance companies normally try to discourage other people
to buy any insurance policy.

Customs of Commission: Practice of commission is the main motivational factor used to make
sales of insurance product. It is being badly practiced in the insurance market for which
insurance companies are involved in unhealthy competition. They are offering very high
commission rate even 55 to 60 percent of premium received to procure the business even if that
violates the Insurance Act. It erodes the potential profitability and risk coverage.

Poor Risk Management: Most of the sample insurance companies have used traditional
methods in evaluating comprehensive risk. The shortage of skilled and experienced
professionals in the insurance companies has the consequence that most of sample enterprises
are unable to underwrite and manage their risks on a scientific basis. They underwrite and retain
risks indiscriminately without considering what results they may subsequently face. Lack of
professional knowledge misguides these companies with regard to risk assessing, claim
handling, and risk managing, consequently weakening their financial strengths.

Tax Constraints: Insurance officials say that the high corporate tax restricts the growth of the
insurance sector. Now the insurance companies pay a corporate tax rate of 42.5 percent which
is higher than in other countries.

10 | P a g e
5. Company Overview
This section provides a brief introduction for each of the companies included in this report

5.1 Green Delta Insurance Company Limited

Green Delta Insurance Company Limited (GDIC) is one of the leading private non-life
insurance companies in Bangladesh. GDIC was incorporated in December 14, 1985 as a public
limited company, under the Companies’ Act 1913 and its operation started on 1st January 1986,
with a paid-up capital of BDT 30.00 million.

Currently, Green Delta Insurance Company Ltd. is amassed more than BDT 807 million with
a credit rating of AAA and ST1 as the first Insurance Company in Bangladesh. Green Delta is
also the 1st Insurance Company in Bangladesh to have equity partnership with International
Finance Corporation (IFC) of World Bank Group. Under the charismatic leadership of Mr.
Nasir A Choudhury, Advisor and Ms. Farzana Chowdhury, Managing Director and CEO,
Green Delta Insurance Company Ltd. has been leading the winds of change in the insurance
industry of the country in terms of service standard, innovative products and legislative
restructuring. With a presence in the strategically important parts of the country, which includes
39 branches, Green Delta Insurance Company has established its prominent presence with
equity participation in Delta BRAC Housing Ltd., Progressive Life Insurance Co Ltd, United
Hospital Ltd. FinExcel Ltd. and BD Venture Ltd. Green Delta Capital Ltd., Green Delta
Securities Ltd., Professional Advancement Bangladesh Limited and GD Assist Limited are
four of the direct subsidiaries.

5.2 United Insurance Company Limited

United Insurance Company Limited (UICL) is a publicly listed non-life insurance company
maintaining the traditional values of insurance business since commencement in 1985. The
Company transacts a wide range of non-life (general) insurance business in Bangladesh
including Health and Overseas Mediclaim insurance and has a goodwill and expertise in the
field of insurance with sound and stable financial position.

UICL is the only insurance company in Bangladesh having linkage with Duncan Brothers
(Bangladesh) Ltd. Which is an associate of a multinational company. With a credit rating of
AA and an outlook of “stable” (Surveillance Rating- 2015) they are sourcing 100% of their
own business from national to multinational clients of Bangladesh market.

United Insurance is the first company to receive the first SAFA best Corporate Accounts
Awards in 1997 in the financial sector of SAARC region. After that and within the current

11 | P a g e
timeline they have been keeping a sound profile and retaining a constant growth within the
industry.

5.3 Rupali Insurance Company Limited

Sponsored by a group of visionary entrepreneurs, known for its superior service quality, Brand
Image, Strong Corporate Governance & Corporate Culture committed for excellence, Rupali
Insurance Company Limited as a Public Limited Company under the Companies Act, 1913
and a first generation 8. top-tier Non-Life Insurance Company in Bangladesh came into
existence in May, 1988 and started its Commercial operations on 25 June, 1988.

For over two and half decades. Rupali Insurance Company Limited has been holding the strong
position in terms of premium collection. CRISL, the Credit Rating Agency in Bangladesh
reaffirmed the claim paying ability (CPA) rating of Rupali Insurance Company Limited on
September 30, 2015 as ‘AA’ based on its premium collection, core services, financial ability
8- expeditious settlement of claims.

Rupali Insurance Company Limited has a strong capital base 8. capital adequacy maintaining
well position in the market. It started its business with a paid up capital of Th. 30 million against
an authorized capital of Tk. 200 million being sponsored by a group of renowned business
personalities & reputed industrialist of the country having involvement in diversified business.
The Company went into initial public offering in 1995.

he paid up capital of the company has been raised to 11.602 million as on December 31, 2015
after issuance of Rights shares in the year 2012 and adjustment of stock dividends Including
@ 5% declared in the year 2014. RICL shares are being traded as ‘A” category issue at both
the bourses of the country.

5.4 Agrani Insurance Company Limited

Agrani Insurance Company Limited incorporated and commenced their business in the year
2000 under the industrial law of Bangladesh. Listing their company under Dhaka Stock
Exchange in 2005 they created a standard when it comes to delivery and performance.
Currently they hold 5 million ordinary shares with a par value of 10. They also hold nearly 2.7
million shares also valued 10 each under paid up capital.

With a vision of giving the customers a new experience in general insurance Agrani is working
under the credit rating of AA and an outlook of “stable”. With a gross premium of 407.06
million and a EPS of 1.9 they have grown from ignorable to a stake within a very short time
period.
12 | P a g e
5.5 National Life Insurance Company Limited
With the commencement of National Life Insurance, a new era started in the insurance industry
of Bangladesh which they like to call the era of privatized insurer. They started functioning in
1985 standing on the base created by Mr. Alhaj M. Haider Chowdhury.

The company having 703 crore Premium income in the year 2012 with a hefty Life fund of
2419 crore happens to be a dominant insurer and is moving fast on a new growth trajectory
surpassing its previous records. The motto of the company is to ensure a guarantee for a planned
future. Three visions of the company are-To encourage & induce saving of the high/mid income
population and especially of the low income & marginal group. To create & provide
employment opportunity for the illiterate/half literate/literate youth of the country. Capital
formation at national level for investment to develop dynamism at macro-economy. As a
service industry, the company is committed to personalized service to its valued customers and
will justify their confidence by prudent and viable economic management and offering absolute
security and favorable returns.

6. Findings

STOCK Beta Unlevered WACC CAPM ROE

Beta Required
Rate
Agrani Insurance Company 0.9542 0.7951 8.05% 8.210% 11.3%
Ltd
Rupali Life Insurance 1.1562 0.0772 8.28% 10.22% 15.61%

Green Delta Insurance 0.6481 0.538 7.02% 6.684% 4.4%

Company
National Life Insurance Co. 0.5906 0.5418 3.75% 6.70966% 10.85%

United Life Insurance 1.3535 1.235 8.73% 10.82% 8.8%

In the above table, the levered beta, WACC, CAPM Required Return and ROE of the 5
companies are given. They have been calculated using data and following procedures
mentioned above.

The beta (or systematic risk) is greatest for United life Insurance (1.3535), meaning its stock is
most volatile (aggressive). Green Delta Insurance Company has the least systematic risk. Beta
talks about price risk, and hence United Life Insurance stock prices can be said to deviate the

13 | P a g e
most compared to change in DSEX price. However, it should also be considered that higher
risk tends to bring in higher return. The beta of Green Delta Insurance Company and National
Life Insurance Company are comparatively similar to each other with values of 0.6481 and
0.5906 respectively. Rupali Life Insurance has a beta of 1.1562 and the beta of Agrani
Insurance Company is 0.9542.

WACC calculates the percentage of total amount of cost to be paid against the amount of capital
raised. In other words, WACC can be said to be the minimum rate of return at which a company
produces value for its investors. Investors look to invest in companies which produces return
higher than WACC. The WACC of Rupali Life Insurance is the highest with a value of 8.28%,
while it is the lowest for National Life Insurance Co. (3.75%).

CAPM Required Rate calculates the expected return on stock based on the risk-free return,
market return and beta. In this case, unlevered beta has been considered. Unlevered beta
calculates the risk of the stock, assuming that there is no debt. Higher the unlevered beta of the
stocks, higher is the CAPM required return. For National Life Insurance, Agrani Insurance and
Rupali Life Insurance the ROE is greater than CAPM Required Return as they are above the
security line. This indicates that the stocks of these companies are undervalued. On the other
hand, United Life Insurance and Green Delta Insurance have internal rate of return below the
security line. So their ROE is less than CAPM Required Return. Hence these stocks are
overvalued. The Highest ROE is that of Rupali Life insurance (at 15.61%), while that of Green
Delta life insurance is the lowest at 4.4%

7. Conclusion
The first graph shows the portfolio SML of the 5 companies. The points are found by plotting
beta on the x-axis and required rate of return on the y-axis.

From the Security Market Line graph, we can see that Rupali life insurance has the highest
ROE. It provides the highest amount of return. Also, it’s variation from the required return is
the greatest. From the WACC graph, and our findings mentioned above has the median WACC.
The ROE, compared to WACC, is also high for all the companies, but the difference between
WACC and ROE is greatest for Rupali Life Insurance.

14 | P a g e
We intend to invest in companies that provides return higher than the required rate and also
which is in line or exceeds the WACC. So, our final decision is to invest in Rupali Life
Insurance as it has the highest value of ROE.

15 | P a g e
8.0 Reference
http://lankabd.com/dse/stock-market/UNITEDINS/united-insurance-company-ltd./stock-
price?stockId=231

http://lankabd.com/dse/stock-market/NATLIFEINS/national-life-insurance-company-
limited/company-profile?companyId=208&stockId=208

http://lankabd.com/dse/stock-market/GREENDELT/green-delta-insurance-company-
limited/stock-price?stockId=202

http://lankabd.com/dse/stock-market/AGRANINS/agrani-insurance-company-ltd./stock-
price?stockId=188

http://lankabd.com/market/companyDetails.html?companyId=226&goToHomePageParam=tr
ue

Annual Report 2015-2016 for the five companies Dividend files have been obtained from
Dhaka Stock Exchange

16 | P a g e
 9. Appendix
9.1 Excel Calculations for United Life Insurance Company Ltd.

Closing price United Life Return on Stock United Life Closing Price
Year Date Insurance Company Ltd Par Value Annual Dividend % Dividend (monthly) % Insurance Company Ltd DSEX Return DSEX Beta
29.12.2016 26 10 0.92% 1.92% 5,036.05 4.89% 1.353516915
30.11.2016 25.6 10 0.92% 3.18% 4,801.24 4.55%
31.10.2016 24.9 10 0.92% 4.57% 4,592.18 -2.19%
29.09.2016 23.9 10 0.92% 7.59% 4,695.19 3.72%
31.08.2016 22.3 10 0.92% 7.65% 4,526.58 0.03%
31.07.2016 20.8 10 0.92% 0.93% 4,525.35 0.39%
2016
30.06.2016 20.7 10 0.11 0.92% 1.42% 4,507.58 2.00%
31.05.2016 20.5 10 0.92% -2.87% 4,419.39 5.33%
28.04.2016 21.2 10 0.92% -13.45% 4,195.70 -3.71%
31.03.2016 24.6 10 0.92% -8.55% 4,357.54 -3.42%
29.02.2016 27 10 0.92% -8.47% 4,511.97 -0.64%
31.01.2016 29.6 10 0.92% 18.77% 4,540.89 -1.92%
31.12.2015 25 10 0.92% 4.55% 4,629.64 1.06%
30.11.2015 24 10 0.92% 0.38% 4,581.00 0.36%
29.10.2015 24 10 0.92% -4.40% 4,564.49 -5.93%
30.09.2015 25.2 10 0.92% 0.36% 4,852.08 1.75%
31.08.2015 25.2 10 0.92% 1.98% 4,768.67 -0.49%
30.07.2015 24.8 10 0.92% 7.29% 4,792.31 4.56%
2015
30.06.2015 23.2 10 0.11 0.92% -2.95% 4,583.11 -0.08%
31.05.2015 24 10 0.92% 33.10% 4,586.95 13.33%
30.04.2015 18.1 10 0.92% -25.75% 4,047.29 -10.67%
31.03.2015 24.5 10 0.92% -15.49% 4,530.48 -2.04%
26.02.2015 29.1 10 0.92% -8.20% 4,624.95 -2.10%
29.01.2015 31.8 10 0.92% -5.92% 4,724.05 -2.90%
30.12.2014 33.9 10 0.83% -2.90% 4,864.96 2.00%
30.11.2014 35 10 0.83% -3.88% 4,769.43 -7.81%
30.10.2014 36.5 10 0.83% 8.88% 5,173.23 1.95%
30.09.2014 33.6 10 0.83% 4.28% 5,074.31 11.54%
31.08.2014 32.3 10 0.83% -0.66% 4,549.52 2.76%
24.07.2014 32.6 10 0.83% -0.96% 4,427.16 -1.19%
2014
30.06.2014 33 10 0.1 0.83% -6.28% 4,480.52 1.13%
29.05.2014 35.3 10 0.83% 1.68% 4,430.48 -2.99%
30.04.2014 34.8 10 0.83% -14.08% 4,566.86 1.67%
31.03.2014 40.6 10 0.83% -10.78% 4,491.98 -5.43%
27.02.2014 45.6 10 0.83% -6.77% 4,749.87 -0.07%
30.01.2014 49 10 0.83% 14.15% 4,753.17 11.41%
30.12.2013 43 10 0.83% -0.27% 4,266.55 0.85%
28.11.2013 43.2 10 0.83% -0.04% 4,230.73 6.63%
31.10.2013 43.3 10 0.83% -3.59% 3,967.73 0.76%
30.09.2013 45 10 0.83% -5.29% 3,937.68 -4.60%
29.08.2013 47.6 10 0.83% -6.69% 4,127.48 4.74%
31.07.2013 51.1 10 0.83% -1.38% 3,940.81 -3.99%
2013
30.06.2013 51.9 10 0.1 0.83% 1.53% 4,104.65 5.84%
30.05.2013 51.2 10 0.83% 60.26% 3,878.07 12.77%
30.04.2013 32 10 0.83% -2.78% 3,438.90 -4.21%
31.03.2013 33 10 0.83% -23.24% 3,590.05 -9.65%
28.02.2013 43.1 10 0.83% -9.47% 3,973.28 -3.94%
31.01.2013 47.7 10 0.83% 3.88% 4,136.31 15.63%
30.12.2012 46 10 1.47% -0.54% 3,577.21 0.48%
29.11.2012 46.4 10 1.47% -4.03% 3,560.10 -6.29%
31.10.2012 48.5 10 1.47% -6.45% 3,798.98 -1.21%
30.09.2012 52 10 1.47% 2.05% 3,845.69 2.23%
30.08.2012 51.1 10 1.47% 9.97% 3,761.89 6.91%
30.07.2012 46.6 10 1.47% -10.45% 3,518.62 -9.26%
2012
28.06.2012 52.2 10 0.1769 1.47% -10.21% 3,877.64 -3.24%
31/05/2012 58.3 10 1.47% -3.07% 4,007.33 -6.37%
30/04/2012 60.3 10 1.47% 2.45% 4,280.14 2.57%
29/03/2012 59 10 1.47% -1.09% 4,172.95 6.26%
29/02/2012 59.8 10 1.47% 4.44% 3,927.03 12.55%
31/01/2012 57.4 10 1.47% - 3,488.99 -

Avg Return
on Market,
107.7 10 -0.40% Rm (monthly) 0.79%
Avg Return
on Market,
-4.82% Rm (annual) 9.42%

17 | P a g e
 9.2 Excel Calculations for Green Delta Insurance Company Limited

Closing price Green Return on Green Closing Price Return

Year Date Delta Insurance Par Value Annual Dividend % Dividend (monthly) % Delta Insurance DSEX DSEX Beta
29.12.2016 49.70 10 1.67% 2.40% 5,036.05 4.89% 0.648087773
30.11.2016 48.7 10 1.67% -0.68% 4,801.24 4.55%
31.10.2016 49.2 10 1.67% -3.20% 4,592.18 -2.19%
29.09.2016 51 10 1.67% 7.72% 4,695.19 3.72%
31.08.2016 47.5 10 1.67% 6.64% 4,526.58 0.03%
31.07.2016 44.7 10 1.67% -0.96% 4,525.35 0.39%
2016
30.06.2016 45.3 10 0.2 1.67% -0.29% 4,507.58 2.00%
31.05.2016 45.6 10 1.67% 2.16% 4,419.39 5.33%
28.04.2016 44.8 10 1.67% -2.25% 4,195.70 -3.71%
31.03.2016 46 10 1.67% -7.48% 4,357.54 -3.42%
29.02.2016 49.9 10 1.67% -5.00% 4,511.97 -0.64%
31.01.2016 52.7 10 1.67% -1.55% 4,540.89 -1.92%
31.12.2015 53.7 10 2.08% 14.21% 4,629.64 1.06%
30.11.2015 47.2 10 2.08% -3.84% 4,581.00 0.36%
29.10.2015 49.3 10 2.08% -4.24% 4,564.49 -5.93%
30.09.2015 51.7 10 2.08% 0.21% 4,852.08 1.75%
31.08.2015 51.8 10 2.08% 0.40% 4,768.67 -0.49%
30.07.2015 51.8 10 2.08% -1.50% 4,792.31 4.56%
2015
30.06.2015 52.8 10 0.25 2.08% -0.73% 4,583.11 -0.08%
31.05.2015 53.4 10 2.08% 9.85% 4,586.95 13.33%
30.04.2015 48.8 10 2.08% -14.02% 4,047.29 -10.67%
31.03.2015 57 10 2.08% -19.65% 4,530.48 -2.04%
26.02.2015 71.2 10 2.08% 3.94% 4,624.95 -2.10%
29.01.2015 68.7 10 2.08% -7.01% 4,724.05 -2.90%
30.12.2014 74.1 10 1.25% -3.48% 4,864.96 2.00%
30.11.2014 76.9 10 1.25% -3.23% 4,769.43 -7.81%
30.10.2014 79.6 10 1.25% 0.66% 5,173.23 1.95%
30.09.2014 79.2 10 1.25% -0.35% 5,074.31 11.54%
31.08.2014 79.6 10 1.25% 3.40% 4,549.52 2.76%
24.07.2014 77.1 10 1.25% -4.54% 4,427.16 -1.19%
2014
30.06.2014 80.9 10 0.15 1.25% -3.66% 4,480.52 1.13%
29.05.2014 84.1 10 1.25% 2.46% 4,430.48 -2.99%
30.04.2014 82.2 10 1.25% -2.92% 4,566.86 1.67%
31.03.2014 84.8 10 1.25% 10.01% 4,491.98 -5.43%
27.02.2014 77.2 10 1.25% -20.28% 4,749.87 -0.07%
30.01.2014 97 10 1.25% 2.34% 4,753.17 11.41%
30.12.2013 94.9 10 1.25% 12.06% 4,266.55 0.85%
28.11.2013 84.8 10 1.25% 9.44% 4,230.73 6.63%
31.10.2013 77.6 10 1.25% -22.51% 3,967.73 0.76%
30.09.2013 100.3 10 1.25% -10.01% 3,937.68 -4.60%
29.08.2013 111.6 10 1.25% 2.88% 4,127.48 4.74%
31.07.2013 108.6 10 1.25% 20.67% 3,940.81 -3.99%
2013
30.06.2013 90.1 10 0.15 1.25% 16.42% 4,104.65 5.84%
30.05.2013 77.5 10 1.25% 14.49% 3,878.07 12.77%
30.04.2013 67.8 10 1.25% 24.63% 3,438.90 -4.21%
31.03.2013 54.5 10 1.25% -18.71% 3,590.05 -9.65%
28.02.2013 67.2 10 1.25% -9.51% 3,973.28 -3.94%
31.01.2013 74.4 10 1.25% 1.53% 4,136.31 15.63%
30.12.2012 73.4 10 1.25% -1.84% 3,577.21 0.48%
29.11.2012 74.9 10 1.25% -14.36% 3,560.10 -6.29%
31.10.2012 87.6 10 1.25% -0.43% 3,798.98 -1.21%
30.09.2012 88.1 10 1.25% -11.42% 3,845.69 2.23%
30.08.2012 99.6 10 1.25% 10.93% 3,761.89 6.91%
30.07.2012 89.9 10 1.25% -12.60% 3,518.62 -9.26%
2012
28.06.2012 103 10 0.15 1.25% -15.40% 3,877.64 -3.24%
31/05/2012 121.9 10 1.25% -4.52% 4,007.33 -6.37%
30/04/2012 127.8 10 1.25% -4.10% 4,280.14 2.57%
29/03/2012 133.4 10 1.25% -7.60% 4,172.95 6.26%
29/02/2012 144.5 10 1.25% 2.94% 3,927.03 12.55%
31/01/2012 140.5 10 1.25% - 3,488.99 -
Avg Return on
Market, Rm
-1.04% (monthly) 0.79%
Avg Return on
Market, Rm
-12.50% (annual) 9.42%

18 | P a g e
 9.3 Excel Calculations for Rupali Insurance Company Limited

Closing price
Rupali Life Return on Stock Rupali Life Return
Year Date Insurance Par Value Annual Dividend % Dividend (monthly) % Insurance Closing Price DSEX DSEX Beta
29.12.2016 18.50 10 0.83% -1.68% 5,036.05 4.89% 1.156151541
30.11.2016 18.90 10 0.83% 19.39% 4,801.24 4.55%
31.10.2016 15.90 10 0.83% 4.47% 4,592.18 -2.19%
29.09.2016 15.30 10 0.83% 1.21% 4,695.19 3.72%
31.08.2016 15.20 10 0.83% 16.67% 4,526.58 0.03%
31.07.2016 13.10 10 0.83% 0.64% 4,525.35 0.39%
2016
30.06.2016 13.10 10 0.1 0.83% -3.06% 4,507.58 2.00%
31.05.2016 13.60 10 0.83% 10.35% 4,419.39 5.33%
28.04.2016 12.40 10 0.83% -24.34% 4,195.70 -3.71%
31.03.2016 16.50 10 0.83% -5.24% 4,357.54 -3.42%
29.02.2016 17.50 10 0.83% -2.31% 4,511.97 -0.64%
31.01.2016 18.00 10 0.83% 7.00% 4,540.89 -1.92%
31.12.2015 16.90 10 0.83% 0.49% 4,629.64 1.06%
30.11.2015 16.90 10 0.83% 2.31% 4,581.00 0.36%
29.10.2015 16.60 10 0.83% -3.00% 4,564.49 -5.93%
30.09.2015 17.20 10 0.83% 5.39% 4,852.08 1.75%
31.08.2015 16.40 10 0.83% -5.27% 4,768.67 -0.49%
30.07.2015 17.40 10 0.83% 7.26% 4,792.31 4.56%
2015
30.06.2015 16.30 10 0.1 0.83% -5.84% 4,583.11 -0.08%
31.05.2015 17.40 10 0.83% 24.00% 4,586.95 13.33%
30.04.2015 14.10 10 0.83% -29.08% 4,047.29 -10.67%
31.03.2015 20.00 10 0.83% -11.14% 4,530.48 -2.04%
26.02.2015 22.60 10 0.83% 9.05% 4,624.95 -2.10%
29.01.2015 20.80 10 0.83% -11.51% 4,724.05 -2.90%
30.12.2014 23.60 10 0.00% 0.43% 4,864.96 2.00%
30.11.2014 23.50 10 0.00% -7.48% 4,769.43 -7.81%
30.10.2014 25.40 10 0.00% 3.67% 5,173.23 1.95%
30.09.2014 24.50 10 0.00% 0.82% 5,074.31 11.54%
31.08.2014 24.30 10 0.00% 6.58% 4,549.52 2.76%
24.07.2014 22.80 10 0.00% -3.39% 4,427.16 -1.19%
2014
30.06.2014 23.60 10 0 0.00% -4.84% 4,480.52 1.13%
29.05.2014 24.80 10 0.00% 0.81% 4,430.48 -2.99%
30.04.2014 24.60 10 0.00% -23.36% 4,566.86 1.67%
31.03.2014 32.10 10 0.00% -9.83% 4,491.98 -5.43%
27.02.2014 35.60 10 0.00% -7.05% 4,749.87 -0.07%
30.01.2014 38.30 10 0.00% 13.99% 4,753.17 11.41%
30.12.2013 33.60 10 0.00% -0.59% 4,266.55 0.85%
28.11.2013 33.80 10 0.00% 3.36% 4,230.73 6.63%
31.10.2013 32.70 10 0.00% 0.31% 3,967.73 0.76%
30.09.2013 32.60 10 0.00% 0.62% 3,937.68 -4.60%
29.08.2013 32.40 10 0.00% 0.93% 4,127.48 4.74%
31.07.2013 32.10 10 0.00% -4.75% 3,940.81 -3.99%
2013
30.06.2013 33.70 10 0 0.00% -4.53% 4,104.65 5.84%
30.05.2013 35.30 10 0.00% 14.24% 3,878.07 12.77%
30.04.2013 30.90 10 0.00% 2.66% 3,438.90 -4.21%
31.03.2013 30.10 10 0.00% -35.82% 3,590.05 -9.65%
28.02.2013 46.90 10 0.00% -11.17% 3,973.28 -3.94%
31.01.2013 52.80 10 0.00% 15.03% 4,136.31 15.63%
30.12.2012 45.90 10 0.00% -2.75% 3,577.21 0.48%
29.11.2012 47.20 10 0.00% -13.71% 3,560.10 -6.29%
31.10.2012 54.70 10 0.00% -2.67% 3,798.98 -1.21%
30.09.2012 56.20 10 0.00% 12.63% 3,845.69 2.23%
30.08.2012 49.90 10 0.00% 27.62% 3,761.89 6.91%
30.07.2012 39.10 10 0.00% -2.25% 3,518.62 -9.26%
2012
28.06.2012 40.00 10 0 0.00% -9.71% 3,877.64 -3.24%
31/05/2012 44.30 10 0.00% 0.45% 4,007.33 -6.37%
30/04/2012 44.10 10 0.00% -7.16% 4,280.14 2.57%
29/03/2012 47.50 10 0.00% -3.46% 4,172.95 6.26%
29/02/2012 49.20 10 0.00% -10.87% 3,927.03 12.55%
31/01/2012 55.20 10 0.00% - 3,488.99 -

Avg Return on Market,

107.7 -0.94% Rm (monthly) 0.79%

Avg Return on Market,

-11.29% Rm (annual) 9.42%

19 | P a g e
 9.4 Excel Calculations for Agrani Insurance Company Limited

Return on Stock
Closing price Agrani Agrani Insurance Co Closing Price Return
Year Date Insurance Co Ltd. Par Value Annual Dividend % Dividend (monthly) % Ltd. DSEX DSEX Beta
29.12.2016 24 10 0.58% 17.93% 5,036.05 4.89% 0.954198613
30.11.2016 20.4 10 0.58% 37.30% 4,801.24 4.55%
31.10.2016 14.9 10 0.58% 5.34% 4,592.18 -2.19%
29.09.2016 14.2 10 0.58% -2.34% 4,695.19 3.72%
31.08.2016 14.6 10 0.58% 11.90% 4,526.58 0.03%
31.07.2016 13.1 10 0.58% 0.45% 4,525.35 0.39%
2016
30.06.2016 13.1 10 0.07 0.58% -2.53% 4,507.58 2.00%
31.05.2016 13.5 10 0.58% 5.92% 4,419.39 5.33%
28.04.2016 12.8 10 0.58% -10.71% 4,195.70 -3.71%
31.03.2016 14.4 10 0.58% -9.64% 4,357.54 -3.42%
29.02.2016 16 10 0.58% -9.27% 4,511.97 -0.64%
31.01.2016 17.7 10 0.58% 4.46% 4,540.89 -1.92%
31.12.2015 17 10 0.42% 17.53% 4,629.64 1.06%
30.11.2015 14.5 10 0.42% 0.29% 4,581.00 0.36%
29.10.2015 14.5 10 0.42% -1.08% 4,564.49 -5.93%
30.09.2015 14.7 10 0.42% 3.09% 4,852.08 1.75%
31.08.2015 14.3 10 0.42% -2.44% 4,768.67 -0.49%
30.07.2015 14.7 10 0.42% 0.97% 4,792.31 4.56%
2015
30.06.2015 14.6 10 0.05 0.42% -7.33% 4,583.11 -0.08%
31.05.2015 15.8 10 0.42% 32.01% 4,586.95 13.33%
30.04.2015 12 10 0.42% -20.78% 4,047.29 -10.67%
31.03.2015 15.2 10 0.42% -15.79% 4,530.48 -2.04%
26.02.2015 18.1 10 0.42% 5.47% 4,624.95 -2.10%
29.01.2015 17.2 10 0.42% -7.80% 4,724.05 -2.90%
30.12.2014 18.7 10 0.83% -1.14% 4,864.96 2.00%
30.11.2014 19 10 0.83% -5.06% 4,769.43 -7.81%
30.10.2014 20.1 10 0.83% 8.51% 5,173.23 1.95%
30.09.2014 18.6 10 0.83% 4.96% 5,074.31 11.54%
31.08.2014 17.8 10 0.83% -6.86% 4,549.52 2.76%
24.07.2014 19.2 10 0.83% 0.96% 4,427.16 -1.19%
2014
30.06.2014 19.1 10 0.1 0.83% -8.65% 4,480.52 1.13%
29.05.2014 21 10 0.83% 1.85% 4,430.48 -2.99%
30.04.2014 20.7 10 0.83% -13.76% 4,566.86 1.67%
31.03.2014 24.1 10 0.83% -14.24% 4,491.98 -5.43%
27.02.2014 28.2 10 0.83% -4.77% 4,749.87 -0.07%
30.01.2014 29.7 10 0.83% 10.72% 4,753.17 11.41%
30.12.2013 26.9 10 0.42% -0.95% 4,266.55 0.85%
28.11.2013 27.2 10 0.42% 2.80% 4,230.73 6.63%
31.10.2013 26.5 10 0.42% -9.72% 3,967.73 0.76%
30.09.2013 29.4 10 0.42% 22.16% 3,937.68 -4.60%
29.08.2013 24.1 10 0.42% 0.17% 4,127.48 4.74%
31.07.2013 24.1 10 0.42% -3.43% 3,940.81 -3.99%
2013
30.06.2013 25 10 0.05 0.42% -9.60% 4,104.65 5.84%
30.05.2013 27.7 10 0.42% 4.29% 3,878.07 12.77%
30.04.2013 26.6 10 0.42% -4.85% 3,438.90 -4.21%
31.03.2013 28 10 0.42% -10.98% 3,590.05 -9.65%
28.02.2013 31.5 10 0.42% -2.95% 3,973.28 -3.94%
31.01.2013 32.5 10 0.42% 3.31% 4,136.31 15.63%
30.12.2012 31.5 10 0.00% -1.56% 3,577.21 0.48%
29.11.2012 32 10 0.00% -5.88% 3,560.10 -6.29%
31.10.2012 34 10 0.00% -0.29% 3,798.98 -1.21%
30.09.2012 34.1 10 0.00% 6.56% 3,845.69 2.23%
30.08.2012 32 10 0.00% 10.73% 3,761.89 6.91%
30.07.2012 28.9 10 0.00% -9.12% 3,518.62 -9.26%
2012
28.06.2012 31.8 10 0 0.00% -9.92% 3,877.64 -3.24%
31.05.2012 35.3 10 0.00% -5.61% 4,007.33 -6.37%
30.04.2012 37.4 10 0.00% -8.11% 4,280.14 2.57%
29.03.2012 40.7 10 0.00% 5.44% 4,172.95 6.26%
29.02.2012 38.6 10 0.00% 11.88% 3,927.03 12.55%
31.01.2012 34.5 10 0.00% - 3,488.99 -

Avg Return on
Market, Rm
107.7 10 0.17% (monthly) 0.79%

Avg Return on
Market, Rm
2.01% (annual) 9.42%

20 | P a g e
 9.5 Excel Calculations for National Life Insurance Company Limited

Closing
price
(NATLIFEI Return on Stock
Year Date NS) Par Value (NATLIFEINS)Annual Dividend Dividend
% (Monthly) (NATLIFEINS) Closing Price DSEX Return DSEX Beta
29.12.2016 200.1 10 1.67% 11.20% 5,036.05 4.89% 0.590552823
30.11.2016 180.1 10 1.67% 6.29% 4,801.24 4.55%
31.10.2016 169.6 10 1.67% -1.98% 4,592.18 -2.19%
29.09.2016 173.2 10 1.67% 6.16% 4,695.19 3.72%
31.08.2016 163.3 10 1.67% -16.56% 4,526.58 0.03%
31.07.2016 195.9 10 1.67% 7.43% 4,525.35 0.39%
2016
30.06.2016 182.5 10 0.2 1.67% -0.18% 4,507.58 2.00%
31.05.2016 183 10 1.67% -7.96% 4,419.39 5.33%
28.04.2016 199 10 1.67% -2.46% 4,195.70 -3.71%
31.03.2016 204.2 10 1.67% -1.94% 4,357.54 -3.42%
29.02.2016 208.4 10 1.67% 1.59% 4,511.97 -0.64%
31.01.2016 205.3 10 1.67% -17.45% 4,540.89 -1.92%
31.12.2015 248.9 10 1.67% 24.35% 4,629.64 1.06%
30.11.2015 200.3 10 1.67% 3.01% 4,581.00 0.36%
29.10.2015 194.6 10 1.67% 2.67% 4,564.49 -5.93%
30.09.2015 189.7 10 1.67% 4.09% 4,852.08 1.75%
31.08.2015 182.4 10 1.67% 1.88% 4,768.67 -0.49%
30.07.2015 179.2 10 1.67% -5.35% 4,792.31 4.56%
2015
30.06.2015 189.5 10 0.2 1.67% -6.06% 4,583.11 -0.08%
31.05.2015 201.9 10 1.67% 12.82% 4,586.95 13.33%
30.04.2015 179.1 10 1.67% -23.36% 4,047.29 -10.67%
31.03.2015 233.9 10 1.67% -0.10% 4,530.48 -2.04%
26.02.2015 234.3 10 1.67% 0.85% 4,624.95 -2.10%
29.01.2015 232.5 10 1.67% -1.08% 4,724.05 -2.90%
30.12.2014 235.2 10 3.75% 2.69% 4,864.96 2.00%
30.11.2014 229.4 10 3.75% -5.79% 4,769.43 -7.81%
30.10.2014 243.9 10 3.75% 3.81% 5,173.23 1.95%
30.09.2014 235.3 10 3.75% 4.74% 5,074.31 11.54%
31.08.2014 225 10 3.75% -4.66% 4,549.52 2.76%
24.07.2014 236.4 10 3.75% -29.66% 4,427.16 -1.19%
2014
30.06.2014 336.6 10 0.45 3.75% 2.49% 4,480.52 1.13%
29.05.2014 328.8 10 3.75% -0.76% 4,430.48 -2.99%
30.04.2014 331.7 10 3.75% -1.34% 4,566.86 1.67%
31.03.2014 336.6 10 3.75% -6.32% 4,491.98 -5.43%
27.02.2014 359.7 10 3.75% 13.27% 4,749.87 -0.07%
30.01.2014 317.9 10 3.75% -2.37% 4,753.17 11.41%
30.12.2013 326 10 1.67% 31.73% 4,266.55 0.85%
28.11.2013 247.6 10 1.67% 2.94% 4,230.73 6.63%
31.10.2013 240.7 10 1.67% -1.08% 3,967.73 0.76%
30.09.2013 243.5 10 1.67% -7.00% 3,937.68 -4.60%
29.08.2013 262 10 1.67% 7.27% 4,127.48 4.74%
31.07.2013 244.4 10 1.67% -15.17% 3,940.81 -3.99%
2013
30.06.2013 288.3 10 0.2 1.67% -9.00% 4,104.65 5.84%
30.05.2013 317 10 1.67% 18.97% 3,878.07 12.77%
30.04.2013 266.6 10 1.67% -4.73% 3,438.90 -4.21%
31.03.2013 280 10 1.67% -5.51% 3,590.05 -9.65%
28.02.2013 296.5 10 1.67% -1.86% 3,973.28 -3.94%
31.01.2013 302.3 10 1.67% -0.08% 4,136.31 15.63%
30.12.2012 302.7 10 2.50% 2.07% 3,577.21 0.48%
29.11.2012 296.8 10 2.50% 3.32% 3,560.10 -6.29%
31.10.2012 287.5 10 2.50% 21.06% 3,798.98 -1.21%
30.09.2012 237.7 10 2.50% -25.64% 3,845.69 2.23%
30.08.2012 320 10 2.50% -3.68% 3,761.89 6.91%
30.07.2012 332.5 10 2.50% 4.97% 3,518.62 -9.26%
2012
28.06.2012 317 10 0.3 2.50% -0.36% 3,877.64 -3.24%
31/05/2012 318.4 10 2.50% -11.95% 4,007.33 -6.37%
30/04/2012 361.9 10 2.50% -1.08% 4,280.14 2.57%
29/03/2012 366.1 10 2.50% -0.42% 4,172.95 6.26%
29/02/2012 367.9 10 2.50% 9.90% 3,927.03 12.55%
31/01/2012 335 10 2.50% - 3,488.99 -
Avg Return on
Market, Rm
107.7 10 -0.19% (monthly) 0.79%

Avg Return on
Market, Rm
-2.31% (annual) 9.42%

21 | P a g e