Our Comments and Expectations
External Background: Yesterday’s session was successful for global markets. The S&P 500 rose by 1.82%, recovering to its 50-day moving average, marking the most significant gain since Trump’s election victory in the U.S. The positive investor sentiment was driven by the U.S. CPI report for the previous month: core inflation slightly slowed to 0.2% from a forecast of 0.3%, while the overall consumer price index rose by 0.4% in December, as expected. Tom Barkin from the Federal Reserve noted that the data indicates progress in reducing inflation toward the central bank’s 2% target, but interest rates should remain restrictive. Nonetheless, the report revived discussions about a potential rate cut, and swap traders returned to fully pricing in a rate reduction by July. John Williams from the New York Fed expressed confidence in further inflation decline but did not give specific hints regarding the timing of additional cuts. In Europe, leading indices rose by 1.2–1.5%, except for the French CAC40, which gained only 0.7%. Germany’s GDP contracted by 0.2% in 2024, as expected, marking the first two-year decline in the last 75 years. In Asia, the most significant growth in the morning was shown by the Korean Kospi (+1.1%), while other indices exhibited a nearly neutral dynamic. Oil prices rose by 2.6%, reaching $82 per barrel, following OPEC’s forecast of a 1.4 million b/d increase in consumption by 2026. Additionally, the IEA notes that in 2025, the oil markets will face a surplus of 725,000 b/d, lower than previously projected, due to higher demand and new supply risks.
Bonds: The yield on U.S. government bonds dropped significantly yesterday. Emerging market bonds rebounded from six-month lows.
KASE Index: KASE had a decent session yesterday, but the results remained within a local consolidation range. Despite the growth of most stocks in the index, particularly Kazakhtelecom shares, the decline of KMG and Kaspi stocks held back the overall index growth.
Index Stocks: Due to its small weight in the index (5.6%), Kazakhtelecom’s growth did not significantly impact the main benchmark’s rise. Our expectations of growth based on news were realized (see local recommendations on page 2 of the review). Going forward, investors should wait for the announcement of the date of the WOSA and the agenda to check whether a dividend issue will be on the agenda. For further "dividend" investments, several risk factors must be considered: 1) Currently, there is no information about dividends, so the purchase might be speculative; 2) The record date is unknown and could be set retroactively at the time of the Mobile Telecom-Service sale announcement; 3) We assess the chances of dividend payouts as high, but there is a risk that the payments may be directed to the National Fund rather than to minority shareholders. Kaspi was the leader in the decline yesterday, likely due to price differences across exchanges.
Currency: There have been no significant changes in USD/KZT quotes this morning. The dollar is trading at 529.5 KZT.