Our Comments and Expectations
External environment. The S&P 500 index has risen by 17.3% this year. During the first three months, prices declined amid trade wars, which weighed on the index’s overall annual performance. Starting in April, however, the S&P 500 experienced a strong rally driven by technology stocks, supported by positive expectations surrounding artificial intelligence and anticipated interest rate cuts by the Federal Reserve. From the early-April lows to the late-October highs, the main US equity index surged by nearly 40%. European indices, which were considered a more attractive option for much of the year, ended up not far behind the S&P 500: the pan-European Stoxx 600 rose by 16.8%, while the DAX and FTSE 100 gained between 21% and 23%. Asian markets showed even stronger dynamics, with the Nikkei 225 and Hang Seng indices up by 26–28%. Among commodities, gold stood out with a remarkable gain of 66%.
Bonds. In 2025, the yield on benchmark 10-year US Treasury bonds declined from 4.57% to 4.13%. Bonds from emerging markets also delivered solid results overall, posting a gain of 8.3%.
KASE Index. The Kazakhstani market is ending 2025 on a very positive note, despite an 18% drop in oil prices. The KASE index is up 26.4% in tenge terms, and when adjusted for the 4.5% appreciation of the tenge, the index’s dollar-denominated return reaches 32%. Over the same period, the S&P 500 rose by 17.3%, which is 1.8 times lower than the performance of the local market. The macroeconomic environment was favorable: Kazakhstan’s GDP grew by 6.4% from January to November. We also see a positive trigger in the growth of the money supply in Kazakhstan, which supported investment activity, though it simultaneously increased inflationary pressure in the economy.
Index stocks. For the fourth consecutive year, BCC delivered the highest annual return within the KASE index. Its share price surged by 119.5%, more than two and a half times the return of the next best-performing company, KMG. Shares of Kazakhstan’s oil giant KMG rose by 47.2%, which is an excellent result given the strengthening of the tenge and a difficult year for oil. Shares of Halyk Bank increased by 44.2%. It is also worth noting that these stocks provide one of the highest dividend yields in the local market, excluding Kazakhtelecom, which paid large one-off dividends this year and remained almost flat compared to last year. Kazatomprom, which became a beneficiary of the AI boom this year, gained 38.9%. The end of the year was somewhat marred by increased volatility in the company’s shares and GDRs; nevertheless, overall, the company added another strong long-term growth driver over the year. The year’s underperformer was Kaspi: its shares declined by 26.3% on the local market and by 16.5% on Nasdaq. For the company, 2025 began with lawsuits from minority shareholders following attacks by Culper Research short sellers, continued with news of a pause in dividend payments due to the acquisition of the Turkish marketplace Hepsiburada, and ended with a moderate improvement in sentiment after the release of third-quarter results.
Currency. While 2025 turned out to be a successful year for the tenge, it was also challenging and volatile. After strengthening in February amid the tax period and a stronger ruble, the local currency weakened from March through the end of September, nearly reaching 550 tenge per US dollar. The situation was stabilized by foreign investors, who began actively purchasing tenge-denominated government bonds following the increase of the base rate to 18%.