Our Comments and Expectations
External Background: The S&P 500 started to recover. Yesterday, the index rose by 0.7% and climbed back above its 50-day moving average, suggesting that the previous breakout of the resistance level was false. Leading the growth were semiconductor companies: Nvidia added 3.7%, AMD rose by 4.5%, and Broadcom jumped 5.2%. Additionally, giants such as Tesla, Google, Meta, and Eli Lilly & Co. also posted gains. According to Conference Board data, the US consumer confidence index unexpectedly dropped to 104.7 in December, with expectations set at 113. The revised figure for November stood at 112.8. The weakness of this indicator somewhat contradicts the hawkish tone of the Federal Reserve last week, which seems to have contributed to the rise in technology stocks. Investors are now pondering whether the market will show the Santa Claus rally, which includes the last five trading days of the old year and the first two days of the new year. Let’s remind that the US market will operate in a shortened session today, and will be closed on December 25. In Europe, the indices showed neutral results. This morning, the mainland China CSI 300 and Hong Kong’s Hang Seng indices showed decent growth. Honda surged by 14% after announcing a buyback of its own shares for up to 1.1 trillion yen ($7 billion) before merging with Nissan Motor. In South Korea, consumer confidence in December dropped the most since the COVID-19 outbreak, due to political turmoil. Commodities are showing sluggish trading this morning ahead of Christmas in the US.
Bonds: After a slight decline, the yield on 10-year US government bonds began to rise again and is at its highest level since May 29.
KASE Index: The KASE index had a calm session on Friday, with a 0.1% increase. The market seems to hint that it could hold above the 5500-point level to catch a breather.
Index Stocks: Most stocks in the index showed a decline, but the 0.6% rise in the Halyk Bank stocks softened the negative impact on the index. The largest decline was observed in Air Astana stocks, possibly due to criticism from parliamentarians directed at the airline and its CEO, Peter Foster. Among GDRs and ADSs, the largest drop was seen in Kaspi stocks. They have been in a downtrend since December 9, partially due to the pressure from the old topic of sanctions risks raised by short-sellers from Culper Research. However, this time the initiative came from the Rosen Law firm, which filed a lawsuit against the company on behalf of shareholders who incurred losses. Our position on this matter remains unchanged: there is no evidence so far that Kaspi hid information or misled investors about sanctions risks.
Currency: Dollar buyers, who failed to break the 525 Tenge level, seem to have weakened their pressure. Yesterday, the Tenge started to rise against the US dollar and continues to do so at the opening of the session. At the moment, the USDKZT rate is dropping to 514.3 Tenge.