Here are our comments and expectations:
External background. The S&P 500 fell by 0.25% yesterday. The recovery slowdown is occurring near historical highs. Bloomberg reports that the Q2 earnings season is nearly complete, which has prompted investors to take a wait-and-see stance and focus on economic data and Federal Reserve signals regarding future rate decisions. Of particular importance will be the inflation report to be released today before the US market opens. According to the average forecast of economists surveyed by Bloomberg, the core Consumer Price Index (CPI) is expected to rise by 0.3% in July compared to 0.2% in June, with the headline figure growing 2.8% year-over-year. Trump extended the suspension of tariffs on Chinese goods for another 90 days: the truce period has been extended until November 10, and the tariff increase planned for Tuesday has been postponed. According to Trump, "all other elements of the agreement" remain unchanged. This step had little impact on market dynamics. According to two administration officials, Michelle Bowman, Philip Jefferson, and Dallas Fed President Lori Logan are being considered for the position of Fed Chair. In Europe, indices ended the session mixed: the DAX fell by 0.3%, FTSE 100 rose by 0.4%. This morning, S&P 500 futures are trading almost unchanged, while European indices gained 0.2%. In Asia, the biggest gain was shown by the Japanese Nikkei 225 (+2.3%), hitting new historical highs. China urged local companies not to use Nvidia Corp’s H20 processors. Oil rose yesterday after seven consecutive sessions of decline and is trading today around $66.9.
Bonds. The yield on 10-year US government bonds slightly retreated. Corporate bonds remain neutral.
KASE Index. The KASE index has risen more than 2% for the second consecutive session, which is a fairly rare event. The last time such dynamics were seen was on October 13–14, 2021.
Index stocks. The biggest gain yesterday was shown by BCC shares, which soared 7.9%. The trigger was news that the bank fully repaid government aid ahead of schedule, potentially opening the way for dividend payments. In second place by growth was Kaspi, catching up on its ADS from the US market. We note that ADS often give early signals of growth slowing down. Risks may not materialize, but for now we are moving the local recommendation to “hold.” Народный банк (People’s Bank) grew quite well, breaking resistance levels and updating historical highs. Additionally, we updated our valuation of Air Astana shares, setting a target price at 960 tenge after a moderately positive Q2 2025 report. The company showed noticeable acceleration in quarterly revenue growth due to an increased aircraft fleet and development of new routes.
Currency. The dollar rose yesterday to 543 tenge but was unable to break local resistance levels against the tenge. This morning USDKZT is pulling back to 542 tenge. This slows the growth of the US currency but does not technically eliminate the possibility of further strengthening.