Our Comments and Expectations
External Background. The S&P 500 fluctuated during the session but closed in positive territory. Shares of major tech giants rose, while the healthcare sector ended in the red. Despite the growth, market participants continue to discuss the negative effects of sanctions, with a growing number of mentions of a potential recession, and more voices calling for investors to rotate funds from U.S. equities into global bonds. Fed’s Barkin stated that the price shock from tariffs could lead to a “cage match” between consumers and businesses over who will bear the costs. In Europe, indices were even more buoyant — both the Stoxx and DAX rose by more than 1%. Inflation in the Eurozone declined to 2.2% in March year-on-year, as expected. In Asia, trading opened moderately with a near-neutral tone. China’s Caixin manufacturing PMI rose at the fastest pace in four months in March, beating expectations. The rebound signals resilience, though deflationary pressure and weak domestic demand persist. Commodities are trading today with little change.
Bonds. The yield on 10-year U.S. Treasuries fell for the third consecutive session. According to Barclays Plc, trend-following hedge funds opened short positions in U.S. stocks and long positions in Treasuries last month, and this trend may continue.
KASE Index. KASE continues to ignore external instability and shows signs of a strong dividend rally. During yesterday’s session, the index broke out of local consolidation with high trading volumes — nearly 4.8 billion tenge. Since the market opened today, the index has continued recovering toward its historical highs.
Index Stocks. Halyk Bank continues its rally following a solid earnings report and a dividend recommendation. A similar wave of interest returned to Kazakhtelecom shares, which rose by 3.7% yesterday. The company has scheduled its annual general meeting (AGM) for May 15 at 3:00 p.m., with the dividend distribution question included on the agenda. Meeting materials — with more details on the proposed payouts — will be available to shareholders starting May 5. It’s worth noting that the question of receiving special high dividends remains uncertain. If investors are dissatisfied with the proposed amount, the shares could see a significant decline. On the other hand, if the company decides not to pay dividends from the Altel/Tele2 sale and instead allocates funds for capital expenditures, that wouldn’t be the worst outcome — the money would remain in the company and be used for telecom projects. On the LSE, Kazatomprom GDRs stood out with a 4.1% jump yesterday. Notably, 100% of the analysts covering the stock on Bloomberg have a “Buy” recommendation on Kazatomprom shares.
Currency. USDKZT is trading at 502.9 this morning. The exchange rate appears to be under pressure from its 50-day moving average.