External Background.
Yesterday, major U.S. indices once again reached historical highs ahead of inflation data and second-quarter financial reports. The S&P 500 rose by 1%, while the Nasdaq increased by 1.1%. During Powell's second day of testimony in Congress, it was stated that no conclusion could be drawn about a significant decrease in inflation to the target of 2%. Nevertheless, the Fed Chair expressed some confidence in this regard. TSMC reported good results for the second quarter, which boosted the stocks of Apple, Nvidia, AMD, and Micron. In Europe, the Stoxx 600 recovered by 0.9% amid a rise in real estate sector stocks. Asian markets also picked up the positive sentiment this morning. The Japanese Nikkei and Hong Kong Hang Seng are up by 1.1% and 1.7%, respectively. In China, despite the recent decline, the CSI 300 index is also showing a 0.9% increase this morning. Commodity prices have rebounded in this positive context. In the case of oil, there was a decrease in stockpiles by 3.4 million barrels last week, while the market expected a decline of 1.3 million barrels.
Bonds.
The yield on 10-year U.S. Treasuries decreased slightly yesterday from 4.3% to 4.28%.
KASE Index.
The KASE fell by 0.5% on Wednesday, largely due to Kazatomprom, which dropped after changes in tax policy for uranium mining companies. On the other hand, KMG reached a new historical record, while Kazakhtelecom hit a 16-year high.
Index Stocks.
The main news yesterday was the decline in the value of Kazatomprom’s GDRs. On the London Stock Exchange, the price fell by 5.6% following news of new differentiated tax rules for uranium mining companies. The mineral extraction tax (MET) will now range from 4% to 18% depending on the extraction level, compared to 6% in 2024 and 9% in 2025. Conversely, KazMunaiGas shares surged by 3% on high volumes, setting a historical maximum. Likely, based on this momentum, the shares will continue to rise to 13,800 tenge, where the upper boundary of the local upward trend lies. There were no specific news items to account for this price increase. It is worth noting the continued decline in Kcell shares, which reached 2,980 tenge, approaching the lower boundary of a long sideways range at 2,950 tenge. Kazakhtelecom continues its growth, trading at 40,000 tenge per share at one point, which hasn’t happened in the last 16 years. We believe that further sharp growth is unlikely; the main scenario is a slight pullback or sideways movement at current levels, followed by a slow price increase.
Currency.
On Wednesday, the dollar showed a slight pullback from the horizontal resistance level of 480 tenge, reaching 477.4 tenge. However, it is unlikely that we will see a sharp decline in the exchange rate in the coming days; rather, the main scenario is local sideways movement in the range of 475-478 tenge per $1.