Our comments and expectations
External Background.
Yesterday, external markets experienced a fairly calm session. Most major global indices did not show price fluctuations greater than 0.5%. The S&P 500 added a modest 0.2%, despite consumer sentiment in the U.S. rising for the second consecutive month in August amid more optimistic views on the economy and inflation. Housing price growth slowed in June to 5.4% year-over-year. The lethargy in the stock market is likely explained by the anticipation of Nvidia's report, a central company in the trendy artificial intelligence sector, which will be released today after market close. Given its significant influence on broader indices, some market participants believe the report will carry more weight than Powell's speech at Jackson Hole. Meanwhile, the options market is pricing in a 10% move in either direction for the next trading session (or after-hours). In Europe, the Stoxx 600 and DAX rose by 0.16-0.35%. Prices in British shops fell by 0.3% year-over-year at the beginning of August, marking the first decline in nearly three years, sharply contrasting with a 0.2% increase in July. In Asian markets, indices are showing mixed but modest dynamics. The greatest price movement is seen in the Hong Kong Hang Seng, which is down nearly 1% today. Oil prices fell by 2.3%, dropping below $80 per barrel again. Reports in the media indicate that production at the El-Feel field in Libya has been halted, with local operators stating they will gradually cease production across the country. The UN has warned that this stoppage could lead to a collapse of the country's economy.
Bonds.
The yield on U.S. 10-year Treasury notes changed little, standing at 3.82%.
KASE Index.
The results of the KASE session were as modest as the trading on external markets. However, the daily candlestick showed that quotes briefly rose to 5,356 points during the day, marking a new historical maximum.
Index Stocks.
According to the analysis of stocks in the index, the growth of the index and its retreat to starting values were driven by the National Bank. Quotes jumped to 219.78 tenge per share yesterday but closed neutrally. On the LSE, the bank's GDRs fell by 2.8%, remaining in a sideways trend. We assessed the latest report from KazMunayGas, which we believe was moderately positive. The company increased its EBITDA, margin, and free cash flow, leading to a significant rise in cash on the company's accounts. The reduction in net debt enhances the company's valuation and increases the likelihood of dividend growth next year. We also note an increase in dividends from joint ventures. On the downside, repair work in the second quarter negatively affected revenue and net profit; however, this decline is temporary. As a result, we raised our target price for the shares to 17,500 tenge.
Currency.
Today, the dollar is showing a slight increase from the support level of 480 tenge, reaching 481.4. There is a sense that the dollar will remain at this level in the coming week.