KASE declined for the first time after four sessions of growth

Our Comments and Expectations

External environment. The S&P 500 jumped by 1.2% yesterday, recovering about half of the losses incurred the day before (-2.1%). The rally was driven by Trump’s statement that he met with NATO Secretary General Mark Rutte, held a very productive discussion, and allegedly reached a “framework basis for a future deal” on Greenland and the Arctic. He also abandoned plans to impose tariffs on European countries and to use military force in an effort to establish control over Greenland. The market reacted positively despite the lack of clear explanations regarding what this framework agreement actually entails and what parameters it includes, especially given Denmark’s absence from the negotiations. On the index heat map, most sectors posted gains, while utilities and financials lagged behind. In Europe, performance was more modest, with Germany’s DAX continuing to decline. In Asian markets this morning, indices in Japan and Korea are rising, and technology companies look particularly strong. S&P 500 futures are up 0.1%.

KASE Index. The KASE Index corrected by 0.7%, slightly retreating from its historical highs. In our view, a modest pullback with a pause in the form of a short sideways trend would be beneficial for the market, allowing it to catch its breath, especially as the Relative Strength Index (RSI) has moved into overbought territory and has already started to form a bearish divergence on the daily chart.

Index stocks. Despite our warnings about local correction risks for the index, largely coming from Kazatomprom, uranium sector stocks performed better than we expected yesterday. On KASE, Kazatomprom corrected by 3%, while on the LSE the shares closed flat, and during the U.S. session uranium ETFs continued their strong rally. The improvement in investor sentiment amid easing tensions in U.S.–Europe trade relations and the overall market rebound may have supported prices. We believe that Kazatomprom shares and GDRs may rise today, but we still see potential for a pause in the rally. Overall, the local market showed moderate performance: Air Astana shares rose, while Kaspi declined. In the case of AIRA, prices began to form the movement pattern we had expected from Halyk Bank shares; however, the latter reversed after early-session gains and closed flat on the LSE. Kaspi ADS on Nasdaq moved against the rising market and broke several local support levels to the downside. On the index chart, the decline was accompanied by elevated trading volumes, about half of which came from Kcell shares, which fell to their lowest levels since December 2.

Currency. The USDKZT pair has been slowly declining for the fourth consecutive session and is trading around KZT 506.4 this morning. We reiterate that, in our view, the dollar could locally decline to KZT 502.6. After that, there is likely to be little time for a rebound, as the effect of the approaching tax period will begin to take hold in early February. Meanwhile, the ruble continues to strengthen against the dollar, reaching 76.74 this morning. RUBKZT is rising to 6.6 today.