Our Comments and Expectations
External Background. The S&P 500 started the session with gains but almost immediately moved into negative territory and closed down 0.5%. The US services sector is in stagnation: companies faced with low demand and rising costs have cut staff numbers. The ISM index fell to 50.1 points — the lowest level since October 2022 and below analysts’ forecasts. Consumer spending adjusted for inflation has barely increased. Stagnation in the services sector, weak employment data, and unstable inflation are factors leading the market to expect a Fed rate cut in September. Meanwhile, HSBC strategists raised the year-end target for the S&P 500 index from 5600 to 6400 points, citing high corporate profits and reduced political uncertainty. Scott Bessent stated he does not plan to run for Fed Chair to replace Jerome Powell. Trump announced that US tariffs on semiconductor and pharmaceutical imports will be announced “around next week.” After the session, AMD released a stronger-than-expected sales forecast but warned that its access to the key Chinese market remains uncertain. In Europe, indices rose by 0.1–0.4%. In Asia, main indices show modest gains this morning. Futures on the S&P 500 are up 0.4%, DAX 0.7%, Stoxx 600 0.5%. Trump said he is “very close to an agreement” with China, while India prepares for his threats. Oil prices rose 0.6%, reaching $68 after five consecutive sessions of decline.
Bonds. The bond market was almost unchanged yesterday. Yields on 10-year US government bonds remained at 4.2% despite a large auction of government securities.
KASE Index. The KASE index rose as expected by 0.7% yesterday. Notably, the leaders in growth were shares of Kazatomprom and KMG, not Kaspi, despite its recent rise on the US market.
Index Stocks. Most likely, the absence of strong growth in Kaspi shares is related to their smaller decline compared to Nasdaq peers. Even though ADS added another 2.8% yesterday, the price difference with ordinary shares on KASE is now practically nonexistent. Following the Q2 2025 report, we raised the target price from $102 to $109. Meanwhile, Kazatomprom’s GDRs rose 3.7%, already impacting local quotes, which increased 3.1% yesterday. This growth did not change the technical picture for GDRs and shares, but prices approached important resistance levels. Air Astana’s GDRs returned to July 23 levels over two sessions, while local market dynamics remain more modest. Today, Kazatomprom shares are up 1.5% since market open, along with Kaspi and Halyk Bank shares rising 0.9%.
Currency. The tenge is strengthening, which is typical dynamics at the start of the month during the tax period. At the time of this review, the dollar trades at 536.6 tenge.