Some 60 per cent of the listed securities traded on Tuesday on the Dhaka bourse declined. But the market closed the day's session with a sharp rise, supported by fundamentally-strong stocks.
These stocks played a key role in driving up the market, except for two sessions, since the fall of the Sheikh Hasina-led government on August 5.
The fundamentally-strong companies, also known as blue chip stocks, experienced price surges up to 60 per cent in the seven sessions to Wednesday.
The companies include Grameenphone, Robi Axiata, BRAC Bank and British American Tobacco Bangladesh Company (BATBC). Grameenphone jumped 53 per cent, and BRAC Bank and Robi 50 per cent each in the seven sessions.
Asif Khan, chairman of EDGE Asset Management, said the P/E (price earnings) ratio of the companies, which propelled the market, had declined abnormally amid the dominance of junk stocks.
The reversal of the trend was a matter of time and now the stocks are the beneficiary of an expectation of good governance following the change of the political regime.
Mr Khan also said the pressure that Grameenphone had faced seems to have eased. BRAC Bank exhibited the best performance amid a poor show by other bank stocks.
It is expected that good governance will be ensured in the market while the companies have a good financial reputation.
"The change in the government was a catalyst restoring investors' confidence in good stocks, which earlier remained less valued," Khan added.
The blue chip stocks comprised the majority in the list of top 10 market movers on the Dhaka Stock Exchange (DSE) in the last seven sessions.
The market leaders on Wednesday helped the Dhaka bourse to close with a sharp rise despite the correction of a majority of the listed securities.
Of the market leaders, BRAC Bank solely added 20.1 points to the index while Square Pharmaceuticals and Grameenphone added 19 points and 14.7 points respectively.
The day's top 10 index movers added 91.5 points to the broad index.
Grameenphone on Wednesday also topped the chart of top 20 turnover leaders indicating investors' enthusiastic participation.
The other market leaders such as BRAC Bank, Square Pharmaceuticals, and BATBC were also on the chart of top turnover leaders in recent sessions.
The market opened the day's session positively on Wednesday and the DSE broad index DSEX soon shed 80 points as investors exerted a sale pressure.
Volatility was observed till the midsession but the DSEX closed the session with a sharp gain supported by late hour's bouncy.
At the end of the session, the DSEX settled at 5952.77 points, with a gain of 1.44 per cent or 84.81 points.
The broad index of the premier bourse lost 148 points in the previous two sessions as investors opted to book profits after a jump of 786 points observed in the four preceding sessions to Sunday.
The blue chip index DS30 advanced 1.19 per cent or 14.98 points to close at 1270.34 on Wednesday.
Of the 397 issued traded, 116 advanced, 239 declined and 42 were unchanged and the DSE posted a turnover of Tk 12.44 billion, 22 per cent up from the previous session.
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