Our comments and expectations
External backdrop. The S&P 500 rose by 0.4% despite a new surge in oil prices. Reports indicate that Tehran rejected a ceasefire agreement with the U.S. and Israel, demanding a complete end to the war. In response, Trump suggested that an escalation of strikes against Iran could begin as early as Tuesday, potentially targeting Iranian power plants. Meanwhile, economic data appeared mixed, indicating a slowdown in the growth of the U.S. services sector in March, although the labor market had previously shown job growth above expectations. ISM data revealed a significant increase in service prices in the U.S. in March while growth in the sector slowed. Some issues continue to emerge in the private credit segment: following Blue Owl, the private credit fund Barings limited redemptions after investors requested withdrawals of more than 11% of assets in the first quarter. A Goldman Sachs fund narrowly avoided larger outflows, as investors sought to withdraw just under 5%. This morning, Brent crude is trading at $112 per barrel. OPEC+ warned that damage to energy assets in the Middle East would have long-term consequences even after the war ends and approved a symbolic increase in production quotas for next month. Asian indices are trading relatively calmly today. Futures on the S&P 500 index are down by 0.4%.
KASE Index. The KASE index closed flat yesterday, continuing its consolidation. Low market activity was also reflected in trading volumes, which fell to their lowest level since January 16.
Index stocks. The largest decline yesterday was recorded in Air Astana shares, which are consolidating after a recent rally. At today’s opening, the stock is up by 0.4%, which can be considered a solid result given that oil prices remain elevated. Kazatomprom shares showed the strongest growth, rising by 1%. Based on the USDKZT rate (as of the forex close yesterday), KZAP shares in the local market traded at a 1.9% premium to the GDRs. Kaspi ADS rose by 1.5% on the U.S. market yesterday and continue to show solid momentum. The quotes currently have the potential to test an important downward trend line around $77. At today’s opening, the KASE index is up 0.2%, with moderate gains in AIRA, KMGZ, KSPI and KZAP shares.
Currency. The rapid decline of the U.S. dollar continues. This morning, USDKZT has fallen to 460 tenge, breaking another support level around 464, with the next level at 455. This marks the seventh consecutive session of decline, and the current pattern resembles the situation observed in late November last year, which was linked to inflows from non-resident investors. According to reports, non-resident activity increased in March, with volumes rising by 77.4 billion tenge (+3.4%) to 2.3 trillion tenge in our government securities. Most likely, the current strengthening of the tenge reflects the continuation of the carry trade strategy by foreign investors, as the country’s economy is supported by high oil prices and the strong tenge does not yet significantly affect income generation. In addition, inflation fell to 11% in March, increasing the likelihood of a rate cut and a rise in government bond prices.