Our Comments and Expectations
External Background. The S&P 500 rose by 0.7% on Friday but declined in after-hours trading. U.S. economic data showed that the Producer Price Index (PPI) unexpectedly fell in April — the largest drop in the past five years. Retail sales growth slowed, and factory output declined. These weak figures suggested that the Federal Reserve might consider cutting rates to avoid a recession. According to a Bloomberg survey, Trump-era tariffs on China may remain at 30% until the end of 2025. In a final deal, they could be reduced to 20%. After the close, sentiment was further pressured by Moody’s downgrade of the U.S. credit rating from Aaa to Aa1, citing concerns over rising national debt. This came after a key House committee failed to advance a massive tax and spending bill on Friday. JP Morgan's CEO stated this week that the U.S. deficit and debt burden will be problematic. In Europe, indices rose by 0.3–0.6% on Friday but are down 0.1–0.3% in futures trading today. In Asia, major indices are showing moderate losses this morning, not exceeding 1%. Alibaba ADRs fell despite quarterly revenue growth, as its AI-focused core business disappointed expectations. Japan’s economy contracted for the first time in a year: real GDP fell by 0.7%, slightly below forecasts. Oil is trading below $65. According to Macquarie strategists, OPEC+ could increase daily oil output by another 100,000–400,000 barrels in July — following a 411,000 barrel/day increase in June.
Bonds. Yields on 10-year U.S. Treasuries began to rise again after a recent decline. As of this morning, the yield has reached 4.52%.
KASE Index. The KASE index closed with a slight gain on Friday. Prices continue to show signs of moving within a broad sideways trend.
Index Stocks. The 5700-point resistance level remains a key local threshold shaping the index's direction. Since February, KASE quotes have been trading within the 5500–5700 range, unable to make a confident push toward the 5800 level to retest or surpass previous highs. On Friday, Kazakhtelecom led the gains, briefly hitting 60,000 tenge. Given that the record date is set for May 25, the ex-dividend date will be Thursday, May 22, and the last day to buy shares is Wednesday (this is not an investment recommendation). On the LSE and Nasdaq, Kaspi (+1.7%) and Kazatomprom (+1.1%) showed gains. Kaspi’s ADS has about 4.3% upside left before testing the 50-day moving average. We have raised KEGOC’s target price from 1,840 to 2,090 tenge after the company’s Q1 2025 report. The company continues to grow its revenue on the back of higher volumes, though growth has slowed due to a decline in non-core income.
Currency. USDKZT is trading at 510.7 today, near its 50-day moving average.