Our Comments and Expectations
External background. The S&P 500 rose by 0.24% yesterday, although the main focus of investors was on events after the close of trading. Nvidia’s report reflected a slowdown in growth and a lukewarm sales forecast of about $54 billion for the current quarter, well below the most optimistic estimates. The company also noted that Donald Trump’s plan to cut AI chip sales to China by 15% could entail legal risks. According to Huang, China could provide Nvidia with $50 billion worth of orders this year. In post-market trading, Nvidia shares fell by 3.14%, with even larger losses cushioned by the announcement of an additional $60 billion share buyback program. At the moment, taking this decline into account, S&P 500 futures are down only 0.16%. In Europe, the Stoxx600 broke a two-day decline, closing flat. Reports suggest that the EU is considering additional sanctions to prevent third countries from helping Russia circumvent restrictions. In Asia this morning, Hong Kong’s Hang Seng index is down, while other major indices in the region are showing growth. Oil is trading at $68.9 per barrel. U.S. crude oil inventories fell by 2.39 million barrels last week, exceeding the expected 2 million. Citi expects oil prices to decline in Q4 as oversupply starts to exert more pressure and has revised its Brent forecast lower.
Bonds. The yield on 10-year U.S. Treasuries continued to decline slowly, reaching 4.23%. At the same time, U.S. non-investment grade bonds are showing strong growth.
KASE Index. The KASE has been rising for the third consecutive session, moving towards local resistance levels near previous historical highs. While market dynamics are currently in line with expectations, as resistance levels approach, the key question will be whether the market breaks higher or continues in a sideways trend.
Index stocks. Among index stocks, BCC stood out. The stock rose another 3.3% yesterday, hitting new all-time highs. We revised our valuation of the company after its Q2 report, which turned out moderately positive. The bank reported record net interest income of 226 billion tenge, up 29% YoY and 5.3% QoQ, mainly due to issued loans. Quarterly net profit also rose significantly — up 21% QoQ and 16% YoY — reaching a record 12.1 billion tenge. As a result, our new target price for BCC shares is 4,100 tenge, which implies overvaluation of around –10%. Our fundamental recommendation with a 6–12 month horizon is “Hold.” Among GDRs and ADSs, Halyk Bank and Kaspi.kz both showed good growth yesterday. Nevertheless, both stocks are currently trading in a local sideways trend.
Currency. The U.S. dollar has returned to its previously established sideways channel after a false breakdown of support levels on the USDKZT chart. At present, the currency is trading at 538 tenge.