Our comments and expectations
External background. The S&P 500 fell 0.6% after the long weekend. Oil, which has nearly reached the round level of $100 per barrel for Brent, is currently pressuring the market. Reports say the U.S. struck targets near Kharg Island and the port city of Jask. Iranian media stated that tanker crews in the area of Kuwaiti and Bahraini berths should “immediately abandon their vessels, as they will become targets of shelling.” Saudi Arabia suspended operations at several energy facilities in the south of the country following Houthi threats. Energy companies and some semiconductor manufacturers tried to support the market, but it was not enough. The yield on 10-year U.S. Treasuries topped 4.8% for the first time since November 2023. Recall that markets are pricing in more than a 50% probability of a Fed rate hike on September 16. This week, investors are awaiting the inflation report, which will be an important reference point for the Fed. Economists forecast the consumer price index to rise 0.4% in August, twice as much as the previous month, partly due to higher gasoline prices. Core CPI is expected at 0.2% m/m, and the year-on-year figure at 2.4%. This morning, sentiment in Asia is mixed, with Korea’s Kospi up the most—by 1.4%. Oil is trading at $99.9 per barrel, and S&P 500 futures are up 0.07%.
KASE Index. For KASE, yesterday’s session was positive and the opposite of what was observed on Monday. Almost all stocks rose, while the index itself remained nearly unchanged over the two sessions.
Index stocks. Solidcore shares showed high volatility—yesterday the price jumped 8.6% after falling 9.8% the day before. We preliminarily assess the report itself as positive: revenue nearly tripled to $972 mln, adjusted EBITDA increased 4.2x to $641 mln, and net profit rose 5.3x to $453 mln. Growth was driven by the recovery in concentrate processing and sales, as well as high gold prices. At the same time, the production plan has been fulfilled only by 39% so far, so the maintained guidance of 540 thousand ounces will require acceleration in the second half. In addition, the company proposed to repurchase shares under a buyback program in an amount of up to $1.2 bln at a price of $11.66 per share. The application period is set from September 9 to October 12, and completion of the repurchase depends on shareholder approval on September 30. On the one hand, this is positive news for the market; on the other, it is a restraining factor for quotes near this price benchmark. On the LSE, GDRs of Halyk Bank and Kazatomprom edged up. They did not bring significant changes to the technical picture; however, for Kazatomprom there is a sense that the shares may soon break through the resistance level of $76.8 and start a new wave of growth. Halyk Bank GDRs show fewer signals for growth, but here we also believe that the quotes can recover after the dividend gap.
Currency. The dollar is again trying to return to levels above 455 tenge today. Apparently, dollar buyers are now fighting quite desperately for this level, as it looks attractive. On the other hand, the dollar is not being allowed to move above 458 tenge, and pressure on the U.S. currency persists.