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“However, I think investors should be cautious in some cases when prices rise at a high speed,” he added.

Musa went on to say that the insurance sector was overvalued.

He said bank stocks were still very much lucrative but the real picture of their performance was not clear since they do not keep proper provisions.

On the other hand, another major sector, textile, has many listed companies but only a few that can be invested in. “Actually, our stock market has a highly restricted investment scope so I don’t find any company to invest in other than 10 to 12,” he said.

As the indexes are at their highest level, some corrections could happen anytime, which is normal, he added.

In answer to a query, Musa said price-earnings ratios do not always give an accurate picture of the market as it was counted based on the average of many small and big companies.

“Still though, people should consider the price-earnings ratio for a company when they choose to invest in it,” he added. The market’s price-earnings ratio was at its highest of 30.58 in 2010, when the indexes were on a prolonged bull run. Now, it is 18.82, according to data from LankaBangla Securities.

A top official of an asset management company preferring anonymity said the indexes rose riding on good stocks but many low performing and junk stocks doubled, tripled or even more within a few months.

“So, risks remain in low performing companies, not in good stocks,” he said, adding that they do not invest seeing the index but instead by analysing a company’s potential and earnings. However, Bangladesh Bank’s decision to mop up unused funds from banks may impact the whole stock market negatively.

The central bank on Thursday decided to clear excess liquidity which creates instability in the economy through asset bubbles.

Under the intervention, the central bank will revive a Bangladesh Bank Bill to allow lenders to invest idle funds.

“Investors should not fear because the excess liquidity of the banks is not the major fund for the stock market,” the asset manager added.