Our Comments and Expectations
External Background.
Yesterday, the S&P 500 rose by 0.3%, the industrial Dow Jones gained 1%, and the Russell 2000 jumped by 1.5%, driven by a revival of the so-called "Trump trade." Most of the growth occurred at the start of the session as investors positively reacted to the appointment of Scott Bessent as Treasury Secretary. Bessent, a hedge fund manager, announced his focus on fulfilling the president-elect’s promises of reducing taxes and tariffs.
On the geopolitical front, tensions eased following reports of an imminent ceasefire agreement between Israel and Hezbollah in Lebanon, leading to a decline in oil prices. Goldman expects the traditional year-end rally this week, which could push the S&P 500 index to 6,200 points. Target levels set by Morgan Stanley and BMO Capital Markets are around 6,600 points, representing approximately a 10.2% increase from Monday’s close.
In Europe, indices also rose, albeit at a slower pace compared to Friday. According to the Ifo Institute, business confidence in Germany fell more sharply than expected in November, reaching a level of 85.7. This morning, markets are actively discussing Donald Trump’s announcement of an additional 10% tariff on Chinese imports and a 25% tariff on all goods from Mexico and Canada. Chinese markets have shown little reaction to this news, but Japanese and South Korean indices are down today. Oil is currently trading at $72.6 per barrel. A representative of Iran stated that OPEC+ has limited ability to reverse production cuts due to increased supply from competitors.
Bonds.
Yields on U.S. 10-year Treasuries declined significantly yesterday, dropping from 4.4% to 4.27%. Corporate bonds showed solid growth.
KASE Index.
The KASE index had a positive session yesterday. We note a range of growing stocks that remain attractive for purchases. On the other hand, we observe heightened volatility in individual stocks, particularly Kazatomprom and Air Astana.
Index Stocks.
BCC shares continue their rally, reaching new historical highs. Shares of Halyk Bank are also nearing absolute highs. KEGOC shares are gradually recovering after the dividend cut-off. Kazakhtelecom also updated its multi-year highs, though the closing price was significantly below the session peaks. Yesterday, KMG showed solid growth, signaling the potential end of a local downtrend.
The most significant price movement was observed in Kazatomprom: quotes fell below 18,000 tenge, corresponding to a 10% drop, but the final close showed only minor losses. No significant news was reported except for the company’s statement about seeking new uranium export markets and diversifying its sales. Air Astana also experienced high volatility with increased trading volumes. We have raised our target price for Halyk Bank shares from 265 to 305 tenge based on Q3 results.
Currency.
The dollar remains steady at 499 tenge as the growth of the DXY dollar index stalls