Our Comments and Expectations
External Background: The S&P 500 fell by 1.5%, meeting investors' expectations of a volatile session following the release of labor market data. Last month, the economy added 256,000 new jobs, exceeding the forecast of 160,000, marking the highest result since March. The unemployment rate also surprised, decreasing to 4.1% from a forecast of 4.2%. After this data, leading investment banks revised their predictions regarding the further reduction of the Federal Reserve's interest rates. Traders in the swap markets now expect a reduction of only 30 basis points in rates by the end of 2025. Next week, inflation data will be released, and earnings season will begin. Core inflation in the U.S. is expected to have only slightly decreased by the end of 2024. A Bloomberg economist survey shows that the median forecast for core inflation growth is 0.2% in December, following four consecutive months of a 0.3% increase. The annual figure is expected to be 3.3%. In Europe, prices dropped by 0.5–0.9%. In Asia, markets are adopting the negative sentiment from the previous U.S. session. The Hong Kong Hang Seng is showing the worst performance, dropping 1.2%, marking the worst New Year's start since 2016. Oil continues to rise to $81.3, developing the rebound that began at the end of 2024.
Bonds: The yield on 10-year bonds reached 4.77%, matching the levels of 2007. The 18-year high is slightly above, at 5%.
KASE Index: The KASE index continues to rise, reaching new highs on every trading session of 2025. The current streak of consecutive growth stands at 10 sessions, with a total increase of 5.3%. Last year, a similar New Year's rally on the local market ended on the 15th session with a total increase of 5.2%.
Index Stocks: The main question for the current session is whether the index can show growth amidst the negative Friday session on Western markets. We don't expect a significant drop, as KASE often reacts to external fluctuations relatively calmly. However, a correction may still "seep" through individual stocks, such as Kaspi, which decreased by 4.3% during the U.S. trading session. A group lawsuit against the company is under review, but we believe this does not pose significant financial risks. Furthermore, the price decrease opens long-term buying opportunities at favorable levels. The rally continues for the stocks of BCC and KMG. Since CCBN shares tend to enter a sideways trend after growth waves, we believe investors will have the opportunity to "spot" the end of the current wave. A potential move from BCC could be into Kaspi.kz shares.
Currency: After breaking the 525 tenge level, USD/KZT quotes are now forming resistance at 528 tenge, where they are trading this morning. It's worth noting that the U.S. imposed sanctions on several subsidiaries of Gazpromneft and dozens of other oil companies. This event was expected but may theoretically influence USDRUB quotes.