Our Comments and Expectations
Background. U.S. stock markets closed lower yesterday. The S&P 500 and Nasdaq fell by 0.6% and 0.9%, respectively. Powell gave fairly neutral remarks yesterday, with no clear hints regarding future rate dynamics. He presented arguments both for raising and for lowering the rate. Boeing gained 2% after signing an $8 billion contract with Uzbekistan Airways. This morning, S&P 500 futures show a slight upward trend. In Europe, the broad Stoxx 600 index rose by 0.3%, partly driven by the luxury sector. Most stocks in this sector advanced after it was revealed that U.S. consumer spending on luxury goods grew for the first time in 37 months. In Asia this morning, South Korea’s Kospi dropped 0.6%, while Japan’s Nikkei in contrast rose modestly by 0.2%. Meanwhile, Hong Kong’s Hang Seng jumped 1.3%, and China’s CSI 300 climbed 0.9%. Oil prices rose nearly 2% following news that the restart of Kurdish oil exports had not taken place.
Bonds. The yield on 10-year U.S. Treasuries fell to 4.1% after four consecutive days of gains.
KASE Index. Yesterday, the KASE index rose 0.5%, making the first step toward a potential new local growth wave. However, the performance over the next couple of trading days will need to be watched for more concrete conclusions.
Index Stocks. The main drivers of yesterday’s growth were Air Astana and KMG, which gained 2.6% and 1.5%, respectively. Following this momentum and the largest daily trading volume since its IPO, Air Astana shares now have a solid chance of continuing upward toward 825 tenge. Overall, this may mark a broader reversal and a significant step toward recovering the airline’s valuation. KMG recovered all of its Friday losses but remains near the upper trend boundary, which must be broken for further growth. Kaspi shares declined slightly on KASE, despite the recent negative ADR performance on Nasdaq. Still, ADRs continued to fall yesterday, suggesting KASE shares may drop today. BCC and Kcell partially recovered losses but show no clear signs of growth yet. Kazakhtelecom rose modestly for the second day in a row and remains in a sideways trend. Despite yesterday’s decline, Kazatomprom remains an attractive option given the sharp 3% increase in the uranium spot price.
Currency. The dollar continued its rise yesterday, gaining another 1 tenge and closing in on the 544 tenge level. Trading volumes were again elevated, which may indicate the presence of a large seller who absorbed demand after the exchange rate moved above 545 tenge. The dynamics of the next few days will likely determine medium-term trends.