Our Comments and Expectations
External backdrop. The S&P 500 gained another 1.65%, extending its advance for a third consecutive session. The main positive factor for the market remains the agreement between Iran and the United States. Trump stated at the G7 summit that the Strait of Hormuz would be fully reopened by Friday, although other leaders were less optimistic. The text of the memorandum, which is expected to be signed later this week, has not yet been published. The agreement was also met with caution by BIMCO, the world’s leading shipping association, which noted that key details still need to be clarified before navigation through the waterway can be considered safe. Michael Wilson of Morgan Stanley expects the stock market rally to broaden further. U.S. manufacturing activity stalled in May after four consecutive months of growth. In Europe, Germany’s DAX posted the strongest gains. Asian markets are showing mixed sentiment this morning. The Hang Seng is down 1.7%. Reports indicate that retail sales in China declined for the first time since late 2022, while investment data fell short of expectations, although industrial production slightly exceeded forecasts. In Japan, the central bank raised its policy rate by 25 basis points. South Korea’s Kospi is up 2.1%. S&P 500 futures are trading flat. Brent crude has fallen below both its 200-day moving average and the $83 per barrel level this morning. Goldman Sachs lowered its oil price forecast for next year by $5, now expecting Brent to average $80 per barrel and WTI $75 per barrel. Lower demand from China is expected despite a recovery in global consumption.
KASE Index. The KASE Index closed down 0.35% yesterday. The market failed to capture most of the positive momentum coming from the rally in global markets. Kazatomprom posted the largest decline, despite expectations that it would benefit from the positive external backdrop.
Index constituents. Kazatomprom shares fell 3.1% without any significant company-specific news. Meanwhile, on the LSE, the stock began to catch up with the sector rally with a one-session delay, jumping 5.9% alongside other uranium-related equities. The technical picture suggests that the shares are advancing from their 200-day moving average; however, strong resistance levels are located in the $75–77.5 range. A breakout above these levels would indicate potential for a more sustained upward move. Kaspi gained 3.3% yesterday, breaking above its 200-day moving average. As with Kazatomprom, a breakout above the nearest resistance level ($84, corresponding to the 50-day moving average) could trigger a strong upward move. It is worth noting that, based on the exchange rate, Kazatomprom’s common shares closed 3.8% below the value of its GDRs, while Kaspi traded at near-parity levels. Halyk Bank closed flat on the LSE and failed to break above its 50-day moving average. As mentioned above, both Kazatomprom and Kaspi are expected to test this dynamic resistance level in the near future.
Currency. Yesterday’s attempt by the U.S. dollar to rise above KZT 493 proved unsuccessful, and USDKZT is declining to KZT 487.5 today. Nevertheless, the local technical picture remains unchanged and continues to resemble a consolidation pattern in the form of a triangle.