KASE is consolidating amid the height of the reporting season

 

Our Comments and Expectations

External Background. Yesterday, investors focused on the Federal Reserve meeting, as reflected in the S&P 500’s performance, which started to rise after 11:00 PM local time. By the end of the session, the index gained 1.1%, with media outlets calling it a "relief." The Fed kept the interest rate unchanged, while Jerome Powell reassured investors concerned about tariffs, signaling that the regulator does not see the need for drastic measures in response to Donald Trump’s trade war. According to Powell, any potential inflation spike due to tariffs would be temporary. The median forecast from the Fed’s dot plot suggests a 50 basis point rate cut this year. Bob Michele of JPMorgan noted that the market reacted positively to the regulator’s lack of rushed conclusions. Meanwhile, Trump stated that the Fed should lower rates as tariffs will soon impact the economy.

In geopolitical news, Zelensky announced that he had a "frank and substantive" conversation with Trump, after which Trump agreed to halt strikes on Russian energy facilities. In Europe, stock prices did not show the same level of growth as in the U.S. Eurozone inflation for February was revised downward, strengthening calls for the ECB to continue lowering rates. The Consumer Price Index (CPI) rose 2.3% year-on-year, below the initial Eurostat estimate of 2.4%. In Asia, the Hang Seng index saw a correction this morning. UBS analyst John Lam, who previously correctly predicted the collapse of China Evergrande, now expects China's real estate sector to recover faster than anticipated. Oil prices climbed to $71 amid reports of U.S. gasoline inventories dropping to their lowest levels since January.

Bonds. The yield on 10-year U.S. Treasury bonds declined after Jerome Powell's dovish tone. Corporate bonds gained 0.5%-0.7%.

KASE Index. The KASE index closed near neutral yesterday. Over the past three sessions, prices have remained stable, showing no significant movements.

Index Stocks. The sideways trend in the local market may be attributed to expectations of financial reports from major index-listed companies, which are traditionally published in the second half of March. Yesterday, Kazatomprom released its report, while upcoming reports include those of Halyk Bank, Kazakhtelecom, and KMG. The biggest decline was in Kazakhtelecom shares, likely due to news that the company is under investigation by the antitrust agency over suspected overpricing. On the LSE and Nasdaq, local stocks closed in negative territory but without sharp movements. Kazatomprom shares did not respond to the rise in the uranium sector and metal futures. Additionally, it was revealed that Abu Dhabi’s ADQ fund and Energy Capital Partners are forming a $25 billion energy venture for data centers and other projects. The statement did not specify the energy sources, but they could likely include nuclear reactors.

 

Currency. The dollar rose to nearly 504 KZT yesterday. Notably, the USDKZT exchange rate did not react to the ruble’s strengthening but did respond to its weakening. This morning, USDKZT has dropped to 501.8, while the DXY index remains unchanged.