Our Comments and Expectations
External background. The S&P 500 rose by 0.6%, reaching new all-time highs. Non-farm payrolls increased by 50,000 in December. The unemployment rate fell to 4.4% from 4.6% in November. Economists had expected job growth of 70,000 and an unemployment rate of 4.5%. Powell stated that he had received subpoenas related to his testimony on the renovation of the Federal Reserve’s headquarters, calling it pressure from Trump. S&P 500 futures are currently down 0.5%, although Asian markets are showing strong gains this morning. Commodities are also active: gold is hitting new highs, while copper prices are rising. Oil is trading around $63.4 per barrel.
KASE Index. On Friday, the KASE Index jumped by 1.1%. Trading volumes increased, and prices updated their highs and managed to consolidate at new levels. At the same time, previous growth leaders that had driven the index higher are beginning to show signs of a pause. This is likely to result in a short-term pause in index growth today, which should not be viewed as a negative signal as long as prices remain above the resistance levels that were recently broken with confidence.
Index stocks. Kazatomprom delivered the strongest performance. The local market likely benefited from a currency differential effect, allowing KASE-listed shares to outperform their LSE counterparts. As noted in our previous review, KASE shares had been trading nearly 3% cheaper than those on the LSE, whereas the opposite situation is more typical. After a 5.7% rise, the shares are now trading at a 2.3% premium to the GDRs. On the LSE, prices attempted to move higher, but despite a formal update of historical highs, Friday’s session looked rather weak. GDRs rose to $65 before being pushed down by sellers to $63, leaving a long upper shadow on the daily candle. As a result, we cannot yet confidently say that there is sufficient momentum for a new growth wave, although we do not rule out its emergence later. Kaspi shares were the second-best performers on the local market, gaining 1.5%, while on Nasdaq the stock declined by 2.2%. The negative scenario mentioned in our previous review materialized: prices failed to break the resistance of the descending trendline. Air Astana shares entered a downward phase amid a negative wave of public sentiment related to internal investigations. Among positive trends, Solidcore shares stand out, having risen almost without pauses since October last year. KazTransOil shares are also hinting at a potential new growth wave. Halyk Bank GDRs managed to hold their positions on the LSE, preventing a deterioration in the technical picture.
Currency. The USDKZT pair is notable for its lack of movement over the past four sessions, especially considering the high volatility observed prior to the current consolidation. This morning, the dollar is trading around 508.9 tenge, while the ruble is strengthening to 78.5 per dollar. The DXY dollar index is declining for the first time after four consecutive sessions of gains.