Our comments and expectations
External background. The S&P 500 rose by 0.2% yesterday. Although prices once again reached new all-time highs, the pace of growth has started to slow. Donald Trump stated that the prospects of a deal with Iran “look very good.” According to him, Iran has agreed to several conditions it had long resisted, including abandoning its pursuit of nuclear weapons. Tehran has not publicly confirmed these concessions. Trump also announced a 10-day ceasefire between Israel and Lebanon. At the same time, several leaders of Gulf Arab states and European countries stated that reaching a peace agreement between the United States and Iran could take about six months. Following these statements, oil prices rose by 3.5% to $98. Among economic data, initial jobless claims declined more than expected last week, strengthening investor confidence in the resilience of the economy. The yield on 10-year U.S. Treasury bonds rose to 4.31% yesterday. Former U.S. Treasury Secretary Henry Paulson called on U.S. authorities to prepare a contingency plan to prevent a potential decline in demand for government bonds. European indices also showed largely neutral dynamics. In Asia this morning sentiment is negative — the Hang Seng and Nikkei 225 are down by 1–1.75%. Futures for the S&P 500 are trading slightly higher by 0.1%, while European indices are slightly in the red. Brent crude is trading around $98.6 per barrel this morning.
KASE Index. The KASE index has risen for the third consecutive session. However, the daily candlestick formed a long upper shadow — prices climbed to around 7,800 points but were later pushed down. This suggests a possible slowdown of the current local upward trend.
Index stocks. In particular, yesterday’s growth and subsequent pullback were seen in the leading stocks Kaspi and Kazatomprom. Kazatomprom still closed with a positive result as it opened with a gap up. Kaspi, however, moved into negative territory, declining by 1.4%. At today’s market open the situation is similar — prices rose to 39,670 tenge but then pulled back. It is worth noting that the shares have been in the red on Nasdaq for the second consecutive session, taking a pause after a sharp rally. Overall, such dynamics appear natural, although recently the stock has frequently changed direction despite positive technical signals. For now, we are watching whether ADS prices remain above the $80 level. The situation with Kazatomprom looks simpler — GDR prices are unable to break through an important resistance level. Yesterday on the LSE the shares rose to $88.4, briefly breaking above this level, but were pushed back into the sideways channel. Halyk Bank, on the other hand, broke through resistance levels, showed growth, and is now consolidating at new levels. Unlike Kaspi, we expect greater predictability from these shares from a technical analysis perspective. KazTransOil rose by 1.2% yesterday and added another 1% at the open today, which we view as the market’s reaction to the dividend recommendation.
Currency. The dollar has declined for the third consecutive session and today is breaking below the 470 tenge level, indicating the possibility of further decline.