Our comments and expectations
External background. The decline in the US market continued yesterday. The S&P 500 lost another 0.7%, oil rose to $95 per barrel, and the yield on 10-year government bonds climbed to 4.8%, triggering a drop in bond prices across the entire curve. Global bond yields are reported to have risen to their highest level since 2008. Trump said the US strikes were a retaliatory measure for Iran’s attempt to lay mines in the Strait of Hormuz, as well as for an earlier attack on a military base in Jordan. He warned of new strikes in the event of retaliatory actions by Tehran. Against this backdrop, money markets consider a Fed rate hike in September more likely than keeping the rate unchanged. This morning Asian indices are declining: Hang Seng is showing the smallest drop, down 0.3%, while Kospi is posting the largest decline, losing 4%. S&P 500 index futures are trading flat.
KASE Index. KASE fell by about 0.1% for the second session in a row. Trading volumes are declining while prices consolidate after обновлення highs. A small local positive is that the index remains slightly above the level of the previous peak and the all-time high from August 13.
Index stocks. Overall, there was no high volatility in the market yesterday. Stocks included in the index did not show price deviations of more than 0.7%. The strongest gain was in KEGOC shares, which are likely rising amid ожидания of semi-annual dividend payments. In addition, we have already noted that the shares look quite good from a fundamental perspective, so the rise may also be driven by a strong second-quarter report. The biggest decline was in Bank CenterCredit shares, which in the previous session signaled a possible rise, but it quickly faded. Halyk Bank lost 0.5% and has so far lost the recovery momentum after the dividend cutoff. On the LSE and Nasdaq, our stocks mostly showed a moderate decline. Kaspi lost 1% and still remains in a corrective wave, although it attempted to rise during the session. Kazatomprom fell by 0.4%, which on the one hand looks decent, since the correction could have been stronger given the 3.4–3.8% падение in the Global X Uranium and Sprott Uranium uranium ETFs during the US session. Uranium stopped falling yesterday, stabilizing at $89.5 per pound. Meanwhile, on AIX, Solidcore shares rose to $11 despite the ongoing decline in gold prices. We lowered our recommendation on KazMunayGas shares from “buy” to “hold” after assessing the second-quarter report. Overall, the company’s metrics turned out positive: revenue, EBITDA, and free cash flow increased, however, the strengthening of the tenge became the key factor behind the downgrade.
Currency. The tenge’s strengthening is continuing for the third session in a row, and USDKZT quotes today are attempting to move below the 455 tenge level. At the time of writing, the fight for this level remains in an active phase.
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