Our Comments and Expectations
External background. U.S. stock markets ended yesterday with a slight decline. The S&P 500 fell by 0.13%, while the Nasdaq dropped by 0.07%. Overall, the market’s main focus remains on the upcoming Fed rate decision, which is expected to be cut by 25 basis points. This has already affected the dollar, which fell to a four-year low against the euro. The dollar index reached its second-lowest level since March 2022. It was also reported yesterday that consumer sales rose by 0.6% m/m in August. While this was above market expectations, it had little impact on rate expectations. Nvidia shares declined on reports that AI chips developed for China face weak demand there. In Europe, the Stoxx 600 index dropped 1.1% as banking and insurance sectors fell amid expectations of a Fed rate cut. In Asia this morning, Japan’s Nikkei 225 fell by 0.3% and South Korea’s Kospi by 1%. At the same time, Hong Kong’s Hang Seng gained 1.7% and China’s CSI 300 added 0.5%. In the oil market, the main topic remains Ukrainian drone attacks. Reuters reported that Transneft would limit oil intake into its pipelines, but the agency later deleted the news, and the company called the publication fake.
Bonds. The yield on 10-year U.S. Treasuries declined slightly, reaching 4.03% amid Fed rate expectations.
KASE Index. Yesterday, the KASE Index reached a new all-time high during trading but closed lower. Thus, consolidation of index quotes near the highs continues.
Index stocks. The best performers yesterday were Kazatomprom shares, which rose 4.8% to a record high of 28,197 tenge. GDRs on the LSE also gained 4.8% during the day, at one point rising as much as 9.7%. The GDRs also hit a new all-time high. This can be seen as a reaction to the sharp (+9.4%) rise in the uranium ETF URA on Monday after the London close. This followed a statement by the Trump administration that replenishing the strategic uranium reserve should be considered. Now, Kazatomprom shares look attractive for local purchases with the potential for further record highs. Another notable event was the continued decline in BCC’s price — down 5.7% on Tuesday. Trading volumes increased but were not significant, indicating a lack of major deals and buyers. As a result, quotes fell below the local trend line, significantly reducing the likelihood of a new growth wave with record highs in the coming weeks. Other stocks generally showed price changes of less than 1%. The most notable were KazMunayGas and Kcell, which rose and fell by 0.9%, respectively.
Currency. The dollar fell by 40 tiyn for the second consecutive day but has not returned to the boundaries of the previous local downward channel. The scenario of a possible return to 544 tenge remains relevant.