Our comments and expectations
External environment. Friday’s global market session ended in negative territory. All major global indices declined by 1% to 2.8%, while the S&P 500 fell by 1.2%. The main pressure on markets came from bonds, which declined amid a deadlock in negotiations between Iran and the United States, as well as rising inflation risks and oil prices climbing to $110. The yield on 10-year US Treasury bonds jumped to 4.59%, reflecting the lack of expectations for Federal Reserve rate cuts. Economist Ed Yardeni stated that the Fed should abandon plans to ease policy in June, otherwise the regulator risks losing control over borrowing costs. Well-known bond trader Jeffrey Gundlach also noted that it is “practically impossible” for the central bank to cut rates under current conditions. Trump warned Tehran that time is running out to reach a peace agreement, as the parties have not made progress on reopening the Strait of Hormuz. This time, inflationary pressure also affected semiconductor stocks. Meanwhile, US industrial production in April grew at the fastest pace in more than a year. Output in manufacturing, mining, and utilities increased by 0.7% after a revised decline of 0.3% in March. The meeting between Trump and Xi Jinping took place in a positive tone — the parties agreed to mutually reduce tariffs on a number of goods. In addition, China agreed to purchase at least $17 billion worth of US agricultural products annually through 2028. This morning, market conditions have not improved significantly: Asian indices are declining for the third consecutive session, S&P 500 futures are down 0.5%, and US 10-year yields have risen to 4.615%. Oil is trading slightly above $110 per barrel.
KASE index. On Friday, the KASE index declined by 0.7%. At this stage, we do not see a confirmed breakdown of key support levels. Prices are currently testing the 100-day moving average, but no upward divergence has formed yet. At the opening today, the index shows neutral dynamics.
Index stocks. The main pressure on the market continues to come from Kazatomprom. The stock declined by 3.7% on Friday, but is up 1.1% at today’s open. It should be noted that on Friday, GDRs showed growth near Fibonacci support levels and the 200-day moving average, which may signal a potential recovery. Trading on the LSE today remains volatile — prices immediately began to fluctuate sharply both upward and downward. It is also worth noting that the currency spread between local shares and GDRs has narrowed to 3.3% in favor of tenge-denominated shares. A similar situation is observed in Halyk Bank GDRs — at the open today, prices briefly jumped to $32.75 but quickly pulled back. Kaspi ADS declined by 1.2%, although the technical picture has not changed significantly.
Currency. The US dollar is declining for the second consecutive session. USDKZT quotes failed to extend gains and hold above the 470 tenge level.