Our Comments and Expectations
External Background.
The S&P 500 fell by 1.1% on Friday amid rising geopolitical tensions in the Middle East, pulling back from four-month highs. Despite the overall decline, the energy sector and defense companies remained in positive territory. Israel launched a series of airstrikes targeting Iran’s nuclear and ballistic infrastructure, while the IAEA confirmed a radiation leak at the Natanz facility. Oil prices surged by 7% on Friday but are showing high volatility today: after rising to $77.3 per barrel, prices pulled back to previous levels. Oil options volatility is now comparable to that seen during the onset of the Russia–Ukraine conflict in 2022. Trump urged Iran to return to the nuclear deal, while Tehran announced retaliatory measures — including drone launches, some of which were intercepted. Despite market fears of increased volatility and rising prices, Bloomberg columnist Javier Blas suggested that global stockpiles may help stabilize the oil market. Meanwhile, the U.S. could increase pressure on OPEC, which had already announced plans to ramp up production. Another supporting factor came from the University of Michigan’s preliminary consumer sentiment index for June, which rose by 8.3 points, exceeding expectations. According to a Bloomberg survey, 90% of market participants do not expect the Fed to change rates before September. This morning, S&P 500 futures are rebounding by 1.2%, while European contracts remain cautious. Asian indices in Japan and South Korea are showing solid gains.
Bonds.
The yield on 10-year U.S. Treasury bonds rose on Friday and continues to climb this morning, reflecting a shift into safer assets amid geopolitical risks.
KASE Index.
After a prolonged pause, the KASE index has once again updated its historical highs. The move is driven by rising geopolitical tensions and a sharp increase in oil prices.
Index Stocks.
Despite the index's strong performance, individual stock results on Friday were relatively moderate. As expected, KazMunayGas was the top performer — despite high oil market volatility, the stock reached a new all-time high and remains within its long-term upward channel. On the LSE, Halyk Bank GDRs gained, maintaining short-term growth potential in the 4–7% range. In contrast, Kaspi fell by 2.5%, which is locally negative as it dropped below its trend line. However, rising U.S. futures may support a rebound. Kazatomprom shares are currently consolidating. Today’s session opened neutrally: Kaspi.kz is down following its ADS performance on Nasdaq, while KazMunayGas shares are up another 1%.
Currency.
The dollar is strengthening against the tenge for the third consecutive session, ignoring oil price growth. This morning, the USDKZT rate is at 512.