Our Comments and Expectations
External Background: Most major exchanges were closed yesterday. The active Japanese market showed slight growth. Bank of Japan Governor Kazuo Ueda refrained from making clear statements about a potential interest rate hike next month, reiterating the need to monitor economic risks. His comments led to a decline in the yen. In China, the People's Bank kept the one-year medium-term lending rate at 2%, in line with the expectations of most economists. At the same time, they forecast that in 2025, the government might significantly reduce rates, which could put the budget at risk, as the deficit is expected to grow to 4%. These measures are aimed at stimulating the weakened economy and preparing for potential future trade conflicts. Meanwhile, the Biden administration began an investigation into outdated but widely used chips produced in China. This move could lead to the imposition of tariffs on the sector, similar to what was done during the Trump administration. This morning, Japan’s Nikkei 225 rose by 0.85%, the Korean Kospi remains neutral, and Hong Kong's Hang Seng is still closed. S&P 500 futures show a slight increase of 0.1%. The MSCI AC Asia Pacific index added 0.14%.
Bonds: The yield on 10-year U.S. government bonds continued to rise this morning, reaching 4.62%.
KASE Index: KASE held a calm session with a trading volume of 625 million tenge. The quotes are slowing down the current downward trend, but they are still formally in it.
Index Stocks: Yesterday, most stocks closed without significant price changes. The biggest decline was observed in Kazakhtelecom shares, suggesting a possible downward breakout from the sideways trend that has been in place since the end of November. No news has been reported yet, so this decline might be reversed tomorrow. The biggest growth was seen in Kaztransoil shares, which rose by 1.2%, but this didn’t affect the technical picture, as the stocks have been in a sideways trend for a long time. Interesting price swings were observed in daily candles, which periodically occur with these stocks: the quotes may fall (but not below 800 tenge) and rise to 870 tenge. A similar price swing was also seen in Air Astana shares, which rose to 840 tenge. The currency difference between GDR and ADS and local stocks is not significant; the only notable case is Kaspi, where local shares are 7.2% more expensive than their Nasdaq counterparts, which is generally within the normal range.
Currency: USDKZT quotes finished the session with a decline to 515.1 tenge. We consider Thursday and Friday key for monitoring the ruble: the end of the tax period could impact the USDRUB and, consequently, USDKZT. If the ruble stays below the 50-day moving average on the USDRUB chart, the likelihood of tenge weakening will decrease. This morning, on Forex, the dollar is trading neutrally around 515.3 tenge.