Kaspi and Kazatomprom shares continue to exhibit elevated volatility

Our Comments and Expectations

External backdrop. The S&P 500 experienced a notable decline yesterday but began to recover midway through the session, trimming its daily loss to 0.3%. The highly volatile technology sector acted as the main drag on the market, while industrials, materials, healthcare, and financials provided support. As a result, the Dow Jones Industrial Average closed up 0.17%.

Investor attention is now focused on the U.S. inflation report due before the market opens today. The data may provide the clearest indication yet of whether the new Federal Reserve Chair, Kevin Warsh, will keep interest rates elevated for a longer period.

In Europe, major indices declined between 0.5% and 1.4%. Asian markets are once again trading lower this morning. Hong Kong’s Hang Seng is showing the smallest decline, down 0.9%, while South Korea’s Kospi is posting the largest loss, falling 4.5%. S&P 500 futures are currently down 0.4%.

KASE Index. The KASE Index closed flat during yesterday’s regular trading session. However, later in the evening, shares of Kaspi and Kazatomprom traded on international exchanges resumed their decline, creating additional pressure on the index today. During the current session, the index is down 0.7%, extending the local correction that followed the strong rally seen between May 19 and May 29.

Index constituents. Kaspi and Kazatomprom remain volatile. After attempting to rebound from the 200-day moving average the previous day, Kazatomprom’s GDRs returned to test this key dynamic support level during the latest session. This time, KAP's decline was comparable to losses seen in the Sprott Uranium Miners ETF and the Global X Uranium ETF.

Kaspi, meanwhile, has now fallen for nine consecutive trading sessions despite the absence of any major company-specific news. At the same time, the situation at its Turkish subsidiary appears more favorable, with HEPS shares rising for a fourth consecutive session.

Today marks the ex-dividend date for the company’s quarterly dividend of KZT 850 per share, although the dividend payment is scheduled to be approved at tomorrow’s shareholders’ meeting.

Another underperformer among dual-listed companies is Air Astana’s GDRs, which have now declined for seven consecutive sessions.

Among all GDRs, Halyk Bank continues to demonstrate the strongest stability. Its shares gained 1.3% yesterday and are currently testing their 50-day moving average.

As expected, the above-mentioned stocks opened lower today, dragging the KASE Index down by approximately 0.9%.

Currency. USD/KZT is rising for a second consecutive session. The U.S. dollar has recovered roughly half of the losses incurred between June 2 and June 4.