Our comments and expectations
External background. The S&P 500 fell by 0,3% during the session, although it began to recover right before the close. Morning futures indicate a modest 0.1% increase. Semiconductor manufacturers and software producers were among the gainers on the index map. Netflix dropped 3.4% after Trump voiced concerns that the planned acquisition of Warner Bros may violate antitrust laws. Kevin Hassett, one of the main candidates for the role of Fed Chair, stated that it would be irresponsible for the Fed to outline a rate plan for the next six months and emphasized the importance of monitoring economic data. In Europe, major indices ended with slight declines. In Asia, the morning showed mostly negative sentiment, with Hong Kong's Hang Seng declining the most, despite yesterday’s announcement from China’s Politburo that stimulating domestic demand would be the top priority next year. Oil is trading at $62.3 this morning.
Bonds. A wave of decline swept through the global bond market. Europe performed the worst after Isabel Schnabel from the ECB became the first high-ranking official to confidently state that European interest rates have reached their lower bound. In Japan, demand at the auction for five-year government bonds was weaker than the 12-month average.
KASE Index. KASE index quotes changed little yesterday, although they dropped to 6,841 points during the session. The performance of individual stocks was also moderate.
Index stocks. During the day, Kcell, Kazatomprom, and KazTransOil showed intraday declines. The largest drop came from Kaspi ADS, which fell 2.6% and began reversing after the local growth wave from November 24 to December 3. Kazatomprom corrected by 1.1% after we forecasted yesterday that the rally might pause. Most likely, pressure on prices is now coming from the Fibonacci resistance level at $62.3. KazTransOil grew on the local market, but the daily chart shows that prices still cannot break above the important resistance level of 870 tenge. The largest growth within KASE came from Halyk Bank, although on the local market it is still in a downward trend, unlike its GDRs. On AIX, the rally continues in Solidcore (CORE) shares.
Currency. The tenge continues to weaken after touching 500 per dollar. The dollar bounced again as RSI fell to 16. This morning the dollar is rising to 514 tenge. An interesting comment came from Bank of America: analysts estimated the fair value of the tenge at 480 per dollar, and if the National Bank’s monetary policy does not change, they expect the exchange rate to stabilize in the 485–490 range. Meanwhile, in the Russian media space, the discussion about the strong ruble is resurfacing as Urals oil fell below $45 per barrel — comparable to levels from November 2020. In this situation, ruble depreciation poses an additional risk for the tenge.