Our comments and expectations
External Background: The S&P 500 did not trade yesterday due to the Labor Day holiday in the U.S. This morning, futures for the leading index show a slight decrease of 0.12%. A key event this week is the Non-farm Payrolls report due on Friday. Today, data on the manufacturing ISM will be published. Bloomberg reports that September has historically been a poor month for stocks, especially in the last four years. The Wall Street fear gauge—the Cboe Volatility Index, or VIX—has risen every September since 2021. This trend may be amplified due to the significance of labor market data, despite positive expectations for rate cuts this month. Traders estimate that the easing cycle in the U.S. will begin this month, with about a 25% chance of a 50 basis point cut. JPMorgan Chase & Co. strategists warned that the stock market rally could stall even if the Fed initiates a rate cut. In Europe, indices opened lower yesterday but managed to recover losses during the session and close neutrally. This morning, the South Korean Kospi and Hong Kong's Hang Seng are declining in the Asian markets. Oil prices are rising today after completing another corrective wave. Markets are weighing OPEC's production increases, demand from China, and falling supplies from Libya.
Bonds: The yield on U.S. 10-year Treasury bonds today is at 3.92%. Prices have risen for the last five consecutive sessions.
KASE Index: The local market is declining for the fourth consecutive session. Prices have fallen to 5282 points, which can be considered the lower boundary of the current local sideways channel. Previously, prices had stopped their decline at this level three times.
Index Stocks: The decline in stocks occurred broadly, but the magnitude of the losses was small, reaching a maximum of 1%. Only Kaspi was in the green, having previously risen by 6.8% in the U.S. The biggest losses were seen in the National Bank, which pushed prices back into a sideways trend, erasing the gains made in mid-August (before the financial report). This morning, it became known that the government, through Economy Minister Nurlan Baibazarov, plans to introduce "fair additional taxation" on dividends received by shareholders in the banking sector. Overall, discussions about this are not new, but the market still lacks precise data on the amounts. It is worth mentioning that we have upgraded our recommendation for Kazakhtelecom shares to "Buy" and significantly raised their target price following the Q2 report, amidst important changes in the valuation model due to the sale of Mobile Telecom-Service LLP. The primary factor behind the increase in target price was the cash amount of $1.1 billion that the company will receive from the deal. More details can be found here.
Currency: The dollar shows a slight increase against the tenge today, reaching 482.6. It's also worth noting the rise of the dollar against major world currencies in the DXY index. The ruble has strengthened against the dollar to 89.7.