Kazatomprom pulls the market down

Our comments and expectations

 

External environment. The S&P 500 continues to rise and set new all-time highs. Technology stocks once again led the gains; however, Nasdaq only slightly outperformed the industrial Dow Jones this time. Among the largest companies, Nvidia (+4.4%) showed the strongest performance, with its market capitalization already approaching $6 trillion, along with Broadcom (+5.5%). In addition, after the close, Applied Materials issued strong sales guidance. An additional positive factor came from the US Department of Commerce report, which showed retail sales rising for the third consecutive month (+0.5% m/m). Growth was recorded in nine out of 13 product categories. According to Bloomberg, earnings of companies in the S&P 500 index likely increased by about 27% in the first quarter compared to the same period last year, marking the sixth consecutive quarter of double-digit growth. Meanwhile, Trump indicated that China is ready to support negotiations with Iran. In Europe, indices also rose, with Germany’s DAX (+1.3%) showing the strongest gain, although the region still significantly lags behind the US. This morning, market conditions deteriorated — S&P 500 futures are down 0.6%. Asian markets declined notably, with the most significant drop seen in the volatile Kospi (-6.1%). In the debt market, yields continue to rise — the US 10-year Treasury yield increased to 4.53% in the morning. The US dollar index (DXY) is also rising, while copper and gold are declining. Brent crude is trading at $107 per barrel.

 

KASE index. The KASE index had a generally solid session yesterday; however, based on the wicks on the daily candle, it could have closed significantly stronger. Prices rose to 7,678 points but closed at 7,597, failing to realize the full rebound potential. Today, at the open, the market is down 0.8%, bringing an important support level back into focus.

 

Index stocks. The strongest growth yesterday was seen in Kaspi shares, which gained 2.2% in line with ADS performance on Nasdaq. However, no significant changes were observed either locally or in the US. Halyk Bank rose by 0.6%, while Kazatomprom declined by 0.4%, failing to meet expectations for growth. However, the situation on the LSE was noticeably worse — Kazatomprom GDRs fell by 4%, breaking below the $73 support level and approaching the next support around $67.4. A local rebound started from $67.8. At today’s London open, the situation repeats: quotes are down another 1.1% and continue to struggle at the support level. Halyk Bank also failed to hold its position, with its GDRs down 1.7% on the LSE today. The current correction wave has effectively erased the gains seen between April 10 and April 21, and GDRs are now returning to the broader sideways trend in which they previously traded. On the KASE, a 1.3% decline in KZTO shares can also be noted, which may indicate the end of the latest local upward wave.

 

Currency. The dollar rally has stalled — USDKZT briefly rose to 476 tenge yesterday but then pulled back and closed at 472. Today, a 0.4% decline is observed, with the dollar moving below the 470 tenge level.