Our comments and expectations
External backdrop. On Friday, the S&P 500 continued its rally, gaining another 1.2% and once again reaching new all-time highs. The volatility index VIX fell to 17.47 points, its lowest level since April 12. On the index heatmap, all sectors rose except for energy and utilities. The main positive trigger was a statement by Iran’s Foreign Minister announcing that the Strait of Hormuz would be opened to all commercial vessels until the end of the ceasefire period. However, ships passing through the strait will need to coordinate their movements with the naval forces of the Islamic Revolutionary Guard Corps. Trump stated that the U.S. naval blockade in the Strait of Hormuz would remain in place until an agreement with Iran is reached, while Tehran is currently conducting mine-clearing operations in the strait. Over the weekend, reports emerged that the second round of negotiations should take place on Monday in Islamabad, where a U.S. delegation has arrived; however, Iran stated it would not participate. The weekend in the Persian Gulf was turbulent: reports indicate that Iran reintroduced control over the Strait of Hormuz and shelled vessels. While oil prices dropped by 9% on Friday, this morning prices are rising by 2.7% to $95 per barrel. Futures on the S&P 500 index are down 0.7%. Bloomberg reports that some Wall Street analysts are advising investors to remain cautious and wait until the terms of a potential deal are fully agreed upon. In Europe, mainland indices rose by 1.6–2.3%, continuing their recovery but still remaining below their historical highs. A Bloomberg survey indicates that the ECB will raise interest rates once by 0.25% in June, as the war with Iran is contributing to higher inflation this year.
KASE Index. On Friday, the KASE index rose another 0.8%, marking its fourth consecutive session of growth and approaching its historical highs around 7,900 points, which also act as strong horizontal resistance.
Index stocks. The strongest growth on Friday was recorded in KMG shares. Most likely, investors did not catch the decline in oil prices that started after 17:00 local time, so a slight price pullback may occur during the current session. The next best performance was shown by Halyk Bank shares, which gained another 1% and continued moving toward historical highs. The main positive movement was observed in GDRs and ADS: Halyk Bank GDRs rose by 4.1%, significantly outperforming the shares on the local market. The securities closed at $35.35 and have updated their highs over the past five sessions. Positive momentum was also seen in Kazatomprom, which managed to update its highs and break above the boundary of its sideways trend. Kaspi continued its growth after a two-session pause and confirmed the upward movement following a breakout of the descending trend line. Overall, the stocks are showing strong technical signals for further growth, although the slight decline in S&P 500 futures today should also be taken into account.
Currency. The tenge slowed slightly after three sessions of strengthening against the dollar and is trading neutrally today. At the moment, the USDKZT exchange rate stands at around 470 tenge per dollar.