Our comments and expectations
External background. Yesterday's session turned out to be a good one for the S&P 500, even though the main event of the week is the Fed meeting will be held only today. Nevertheless, the main local resistance level, which is located near the 5180 point mark, has not been overcome. Bank of America conducted a survey among fund managers and revealed direct contradictions among market participants regarding whether artificial intelligence stocks are in a bubble: 40% answered "yes", and 45% answered "no". Today, the Fed is expected to keep rates on hold, and markets will focus on the updated Dot plot and any indication of when the cuts will begin. Some analysts believe that Jerome Powell will avoid signals of an imminent reduction. Meanwhile, the main inflationary pressure in Canada unexpectedly decreased. The CPI rose by 2.8%, which is the slowest pace since June, which means that rates in the country are highly likely to decrease in June. In Europe, the quotes of the main indices showed a slight increase after three sessions of decline. Investor confidence in Germany's economic prospects jumped to 31.7 in March, the highest in more than two years and contradicting a recent Bloomberg survey. In Asia, moderate growth has been observed in the morning at the sites of China and Korea while Japan is resting. Oil rose to resistance levels at $87.5. Jeff Curry of the Carlyle Group (a large investment fund) believes that oil will rise above the consensus forecast of $70-$90 if the Fed cuts rates in the coming months. Crude oil inventories in the United States decreased by 1.5 million barrels last week.
Bonds. US 10-year yields declined yesterday amid increased demand at the auction of 20-year government bonds. Mark Cabana of Bank of America said that if the Fed forecasts show only two cuts in 2024, then 2-year yields will fall by 10 basis points.
The KASE index. KASE experienced a less lively trading session yesterday than on Monday. The volatility of securities in the index decreased, due to which the picture at the end of the day looked more “even". Due to the 0.5% growth, the index did not give negative signals to strengthen the correction, now we are more inclined to believe that before the start of the dividend season, KASE will move in a sideways trend or show moderate growth.
Index shares. The movement in most stocks yesterday did not cause a big change in the picture in them. The largest increase was recorded yesterday in the shares of Kaspi and Air Astana. The securities of the GDR of Halyk Bank and Kazatomprom have grown on the LSE. The latter, by the way, reported positively on revenue growth, due to which we raised the target price for KZAP (KAP) securities to 23200 tenge. According to our estimates, the dividend per share will amount to at least 1,188 tenge, which is 53% more than last year (by the end of 2022).
Currency. In the foreign exchange market, the dollar is again trying to break up from under the local downward trend line against the tenge. We will be watching how successful this attempt will be.
Key market news
(=) KEGC: KEGOC JSC announced the confirmation by S&P Global Ratings agency of the company's ratings, the outlook is Stable