Our comments and expectations
External backdrop. On Tuesday, the S&P 500 fell by 0.4%, the Nasdaq by 0.7%, and the Dow Jones by 0.3%. The catalyst was U.S. inflation, which came in above expectations: in October, consumer prices rose 0.4% m/m versus a 0.3% forecast, while core inflation was 0.3% versus the expected 0.2%. After the release, the market fully priced in at least a 25 bp Fed rate hike in December. Fed officials also delivered hawkish comments: Lorie Logan said at least two additional 25 bp hikes are needed. The 10-year UST yield approached 5%, gold fell 2.0% to $4 030.2 per ounce. Additional pressure on the tech sector came from Nvidia shares, which lost 5.4% amid an internal investigation related to alleged chip shipments via Chinese companies. European markets closed mixed: the Stoxx 600 and DAX gained 0.3% each, while the FTSE 100 fell 0.3%. Brent crude dropped another 1.2% to $91.49 per barrel. Pressure persisted amid statements by U.S. authorities that lowered expectations of new strikes on Iran and amid diplomatic efforts to resolve the conflict. The decline in oil prices, however, did not prevent U.S. bond yields from rising after the inflation release.
KASE Index. The KASE Index posted a neutral result without extending the local rebound. If we do not see renewed positive momentum today, the market will most likely move into a sideways trend, facing resistance around 7,920 points this or next week.
Index stocks. In yesterday’s session, Kazatomprom and BCC shares pulled the market higher, while Kaspi.kz and KazTransOil dragged it down. Kazatomprom rose 1.1% to 28,299 tenge, continuing its recovery following the previous rise in its receipts. However, in London its GDRs fell 1.9% on Tuesday after reaching the 50-day moving average during the session and then sharply reversing lower. Thus, during yesterday’s session the shares managed to show positive signals of a continued rebound, but then negated them after U.S. inflation data were released after 18:00 Astana time. BCC added 0.8% to 5,483.99 tenge. The nine-month results showed an increase in net interest income, but a decline in fee and FX income together with higher operating expenses led to a 16.6% drop in consolidated profit to 181.2 bn tenge. Kaspi.kz lost 1.75%, which worsened the technical picture as the ADS broke below the 200-day moving average. Apparently, investors were not impressed by the third-quarter financial results, although we assess them as neutral relative to our own expectations. Net profit remains within our forecast (around 1% y/y growth). The main negative was a cut in the 2026 GMV growth forecast for the Marketplace segment from 20% to 12%. In addition, Turkey’s Hepsiburada metrics deteriorated in Q3: the quarterly loss increased 50% y/y in Turkish lira terms. Nevertheless, we note a further slowdown in the growth of interest expenses and a record level of quarterly interest income. On AIX, Solidcore shares lost another 3.1% to $11.70. Over two sessions, the decline amounted to about 7.7%. On Tuesday, an additional adverse factor was a 2% drop in gold, though it does not explain the earlier sell-off, which occurred while the metal was rising.
Currency. USDKZT fell 0.5% to 446.65 tenge, dropping below the previously noted support area around 448. The tenge’s strengthening continued despite the decline in oil and a stronger global dollar after the U.S. inflation figures. At the same time, the November AFK survey showed stronger expectations for a short-term weakening of the tenge: the USDKZT forecast for early December was raised from 456.5 to 462.4. Over a 12-month horizon, the estimate, on the contrary, was lowered from 502.6 to 499.4 tenge. One-year inflation expectations increased from 9.7% to 9.9%. At the NBK’s December meeting, 65% of respondents expect the rate to be kept at 15.75%, while the remaining 35% expect a cut to 15.5%. Thus, the current exchange-rate dynamics so far diverge from the survey participants’ short-term expectations.
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