Our Comments and Expectations
External Background
S&P 500 rose again by 0.24%, once again updating its historical highs after the publication of the Federal Reserve minutes. There were no clearly dominant sectors on the index map, but healthcare companies led the way. The Fed minutes showed that officials expressed their willingness to keep rates at the current level until they see further progress in combating inflation. Philip Jefferson stated that the strong economy allows policymakers to take their time. Raphael Bostic noted that he supports a pause until the impact of Trump’s policies becomes more apparent. From geopolitical news, Trump mentioned the possibility of a new trade deal with China, praising his "excellent" relations with Xi Jinping, though he did not go into details. In Europe, major indices had their first relatively negative trading session. Stoxx 600 lost 0.9%, rolling back to February 13 levels, while DAX fell by 1.8%. Isabel Schnabel, a member of the ECB's Executive Board, stated that the regulator would soon have to discuss suspending or halting the rate-cutting campaign. Against this backdrop, traders reduced their expectations for further monetary easing this year from 76 basis points to 72 before her speech. Asia is showing negative dynamics this morning — Hang Seng and Nikkei 225 are down more than 1%, while China’s CSI 300 remains almost unchanged. Inbound investments into China in January were the weakest in four years, and new expenditures by foreign companies fell 13% year-over-year.
Bonds
The US 10-year Treasury yield saw a slight decline to 4.53%. Corporate bonds remained neutral.
KASE Index
The KASE Index rose 0.5% yesterday, continuing its rebound from levels close to 5,500 points. However, the external backdrop is negative this morning, which is already reflected in stock dynamics at market opening.
Index Stocks
Yesterday, Air Astana and Kazakhtelecom provided the main support for the index, as they had already started showing growth in previous sessions. However, both stocks are seeing a slight pullback at today’s opening along with the rest of the market. The main pressure may come from Kaspi and Kazatomprom, which fell 5% and 3.5%, respectively, in foreign trading. Kaspi dropped without any obvious news, although deadlines for investor collection within a class-action lawsuit against the company are approaching. We are keeping an eye on the Q4 2023 and full-year 2024 financial report, which will be published on Monday, February 24. We also found no specific negative news affecting Kazatomprom’s stock. On the contrary, yesterday, Japan announced plans to increase its reliance on nuclear energy. On LSE, Halyk Bank is attempting to break out of its sideways trend.
Currency
Yesterday, the dollar nearly reached 507 KZT but declined throughout the session. At today’s market opening, we see the tenge strengthening to 499.7 per dollar, amid a slight decrease in the DXY index.