Our comments and expectations
External backdrop. Friday ended calmly and with a slight rise of about 0.4% in the major indices. The main event of the day was SK Hynix’s Nasdaq debut: the depositary shares closed about 13% above the offering price, and the company raised a record amount for a foreign company in the U.S. We also note Meta, which gained 6% after analysts published that spending on AI infrastructure may turn out to be roughly half of expectations. Oil paused its rebound on Friday, although for the week prices added around 5% and showed the best result since May. Traffic through the Strait of Hormuz fell to about 13% of normal. In Europe, trading ended virtually unchanged: the Stoxx 600 closed around zero, while Germany’s DAX edged lower. U.S. June inflation is due on Tuesday, and major bank reporting led by JPMorgan will start soon. ASML and TSMC will also report, which will test the sustainability of the rally in chips. This morning, Asian markets are trading negatively. The KOSPI is down 7% and the Nikkei 2%. U.S. index futures also point to a decline, and Brent oil has again approached $80.
KASE Index. The KASE Index posted a decent gain of 0.5% on Friday, largely thanks to dual-listed issuers that rose solidly against the backdrop of the sharp weakening of the tenge on Friday by 2.2%. Overall, the index continues to move sideways, and for further growth it needs to move above 7,720 points, where the boundary of the local downtrend runs.
Index stocks. Four companies posted a daily increase of 1% or more. All except Kazakhtelecom (+1.6%) have an international listing, and the significant rise of the dollar on Friday led to a revaluation of tenge-denominated securities on KASE. Kazatomprom GDRs continued to rise for the second session in a row and, if they move above $72, could show much more substantial growth in the medium term. The premium in Kazatomprom’s share price has almost completely disappeared, while for Kaspi the price gap has already shifted to a discount of nearly 2% after the ADR rose 1.2% by the end of Friday. If the shares continue to rise and move above $91, one can expect a retest of the recent highs at $95. Halyk Bank GDRs at one point rose to almost $32, but have not yet been able to break the June highs. Kazakhtelecom shares sharply reversed after a prolonged decline, breaking the downtrend, and may recover to the level of 42,800 tenge. Solidcore on AIX continued to rise and is near a local horizontal resistance, which needs to be broken for further growth toward the highs at $9.
Currency. USDKZT showed volatile dynamics on Friday, playing out a scenario of a decline to 464 tenge, but then sharply reversing toward the end of trading after comments by the National Bank chairman about canceling the mandatory sale of foreign-currency proceeds by the quasi-public sector. We expect minimal overall impact on the exchange rate after the cancellation, based on previous experience from 2023. From a technical-analysis perspective, the rate will likely try to return to 480 tenge, from which the further dynamics will become clear.