Our Comments and Expectations
External Background. Global markets are trading in the red again. Almost all major global indices we track lost more than 1% yesterday. The S&P 500 declined less thanks to stabilizing non-tech sectors, but still marked its longest losing streak since August. The Nasdaq fell by 1.2%. It appears that investors are increasingly worried about the December Fed meeting, especially after Powell’s hawkish comments during the last decision. Despite this, speakers at the Bloomberg New Economy Forum yesterday described the current situation as a “healthy market correction.” According to ADP, U.S. companies cut an average of 2,500 jobs per week in the four weeks ending November 1. In Europe, indices fell sharply for the fourth consecutive session, reaching 1–3-month lows. In Asia this morning, most indices are seeing moderate declines of 0.3–0.6%. China’s CSI 300 is up 0.6% as China accelerates its purchases of U.S. soybeans, reaffirming its commitment to the truce. Oil rose yesterday and is now trading at $64.7 per barrel. S&P 500 futures are down 0.1%.
Bonds. The yield on 10-year Treasuries reached 4.11% yesterday. Bloomberg notes that risk premiums for corporate and junk bonds are approaching their highest levels in recent weeks.
KASE Index. The KASE Index accelerated its decline after breaking below the local support area near 6900–6930 points. At the same time, its dynamics fully mirror European and U.S. markets, which are also experiencing a four-session losing streak.
Index Stocks. The main underperformers remained Kaspi and Kazatomprom shares. However, an interesting detail: on LSE and Nasdaq, neither stock showed the same level of decline as on KASE, and Kaspi even posted slight gains despite the falling U.S. market. Additionally, the FX price difference between listings is nearing equilibrium, indicating a possible end to the local downturn cycle for both names. BCC also joined the list of losers, falling 2.8%. We raised our target price for Halyk Bank shares to 420 tenge following a moderately positive Q3 report. The bank reported strong interest income growth, but net profit rose less significantly due to higher interest expenses. It also became known that the SPO has started — ALMEX is selling a 4% stake: from November 19 to 21, Halyk Bank is accepting bids for both shares and GDRs. The price will be set on November 21 based on the previous day’s USD exchange rate.
Currency. The dollar lost around 0.8% over two sessions and fell below 520 tenge. Today, Suleimenov stated that the Central Bank will continue selling foreign currency in an amount equivalent to next year’s gold purchases and will additionally consider selling FX equivalent to gold purchases made in 2024.