Our Comments and Expectations
External Background. The S&P 500 rose by 0.7% yesterday. Quotes have been inching up for the third consecutive session, bouncing from levels near the 5500 mark. Trump imposed high tariffs on all imports into the U.S., ranging from 10% to over 50%, in an effort to offset a significant trade imbalance. Additionally, a 25% tariff on imported cars into the U.S. came into effect after midnight in Washington. Federal Reserve Board Governor Lisa Cook stated that the regulator would maintain the current rate “as long as upside risks to inflation persist” and added that progress toward the 2% inflation target “may have stalled.” According to ADP data, the U.S. private sector added 155,000 jobs in March, exceeding the median forecast of 120,000. In corporate news, Tesla's car sales fell 13% in the first quarter to a nearly three-year low, and the company’s shares dropped 8% in after-hours trading. In Europe, indices closed moderately lower, and it was reported that the EU is preparing a package of potential emergency measures to protect the most vulnerable sectors of the economy from the impact of tariffs. Christine Lagarde said the “ECB’s fight against inflation is not over.” In Asia, major indices are declining this morning — the Nikkei 225 is down 2.8%, and the Hang Seng is down 1.5%. Oil prices fell below $73 in anticipation of today’s OPEC meeting. Gold hit new highs in early trading but reversed during the session.
Bonds. The yield on 10-year U.S. Treasuries fell to 4.13%. In early trading, yields continued to decline to 4.06% following further tariff announcements.
KASE Index. KASE lost 0.2% yesterday. During the session, the index climbed to 5760 points but later retreated. Trading volume amounted to KZT 837 million, noticeably lower than the previous session.
Index Stocks. The index pullback was likely driven by Kcell and Kaspi shares, which reversed during the session. Kaspi.kz was the biggest decliner. Given the nature of the local market, the decline may have been triggered by news that the company would not be paying quarterly dividends — although this information had already been known for some time. It was also evident that Halyk Bank shares began to encounter resistance from sellers. We believe that further buying to benefit from the dividend rally is becoming increasingly risky, as quotes are now in the overbought zone based on the Relative Strength Index (RSI). Shares of BCC (Bank CenterCredit) performed quite well on high trading volume, currently nearing historical highs and the resistance level of 2900 KZT. If this level is broken, it could be seen as a local buy signal.
Currency. The dollar continues to weaken against the tenge for the third session in a row, failing to hold above the 50-day moving average — the USDKZT rate currently sits at 501. Globally, the dollar is also declining sharply, as reflected in the DXY index chart.