Our Comments and Expectations
External Background. The S&P 500 index fell sharply at the open but recovered throughout the session, ultimately closing down 0.24%. The biggest pressure once again came from mega-cap tech companies: Apple, Amazon, Tesla, and Google lost 1.1–2%. Bloomberg’s Magnificent 7 index dropped by more than 1%. A notable comment came from Oaktree co-founder Howard Marks, who said that U.S. equities are “in the early stages” of a bubble, though he noted there is no reason to panic yet and that the critical point for a correction has not been reached. Trump once again lashed out at the Fed: the president called on Fed Chair Lisa Cook to resign over a pair of 2021 mortgage loans allegedly involving falsified documents. Ahead, the market awaits Thursday’s PMI business activity data and Fed Chair Jerome Powell’s speech at Jackson Hole. Minutes from last month’s Fed meeting showed that most officials viewed inflation risks as more significant than labor market concerns. In Europe, indices moved mixed: the UK’s FTSE 100 rose notably, the Stoxx 600 added a modest 0.2%, while the DAX fell 0.6%. This morning in Asia, tech names like Taiwan Semiconductor and Samsung are rising, while Japan’s Nikkei 225 and Hong Kong’s Hang Seng are down 0.5–0.6%. Oil is climbing to $67.3 — the highest since August 6 — after the U.S. Energy Information Administration’s weekly report showed inventories fell by 6 million barrels.
Bonds. The yield on 10-year U.S. Treasuries fell to 4.29%.
KASE Index. The KASE index is showing a slight correction, easing local overbought conditions. The RSI has dropped to 76.7 points, still in overbought territory but well below the 87 points recorded on August 15. In the last similar situation, KASE fell 1.8% before RSI dropped to 65 and the market resumed growth.
Index Constituents. The correction is evident amid the absence of heavyweight gainers. Yesterday, Kazatomprom and Halyk Bank fell by 1.8%, and today the decline may continue in HSBK shares, with Kaspi.kz likely joining. Yesterday on the LSE and Nasdaq, all our stocks (except Air Astana) closed in the red. Kaspi shares are seeing the sharpest correction: quotes remain highly volatile, mostly trading in large waves of rallies and pullbacks. We have updated our valuation for Halyk Bank, raising the target price from 390 to 460 tenge. Based on our analysis of the latest report, we concluded that the results were moderately positive, supported by strong year-on-year growth in quarterly interest income and net profit. On the other hand, some slowdown in quarter-on-quarter growth rates was noted.
Currency. USDKZT quotes remain low-volatility, trading at 537.7 tenge.