Our Comments and Expectations
External Background. The S&P 500 opened the session in negative territory, losing nearly 1% following news of a U.S. credit rating downgrade. However, the market soon digested the information, recovered, and returned to its highest levels since March 3, after several analysts expressed the view that Moody’s actions wouldn’t significantly impact the market. Treasury Secretary Scott Bessent downplayed concerns on Sunday, stating that the government intends to cut spending and stimulate the economy. Michael Wilson from Morgan Stanley said investors should buy any dips in U.S. stocks caused by the downgrade, as the trade truce with China reduced recession risks. Donald Trump is expected to visit Capitol Hill on Tuesday to rally Republicans around his tax cut legislation. Additionally, the U.S. President stated that Russia and Ukraine would "immediately" begin peace talks following a two-hour phone conversation with Vladimir Putin, though no timeline or consequences were provided, and sanctions against Russia were not ruled out. In Europe, only Germany’s DAX index posted modest growth of 0.7%. According to JPMorgan forecasts, European stocks are expected to outperform U.S. equities in 2025. In Asia, Hong Kong’s Hang Seng index rose 1.6% this morning, while the mainland CSI 300 added 0.5%. Other indices remained neutral. Chinese banks cut their benchmark lending rates for the first time in seven months — from 3.1% to 3% — as part of an effort to ease borrowing conditions in response to government-imposed tariffs.
Bonds. The yield on 10-year U.S. Treasuries fell from 4.55% as markets moved past the ratings news. Corporate bonds ended the day flat.
KASE Index. The KASE index edged higher yesterday, though during the session, quotes briefly dipped below the 5600 mark. Interestingly, both the day’s rise and the intraday drop were driven by a single stock — Halyk Bank.
Index Stocks. Halyk Bank shares rose 3.8% to nearly 300 tenge, though they dipped as low as 265 tenge during the session. The trigger was a strong Q1 earnings report showing a 55% year-over-year increase in net profit to 275.02 billion tenge (vs. 177.96 billion tenge last year). Net interest income totaled 325.87 billion tenge, with a net interest margin of 7.5%. Elsewhere on the market, no significant movements were observed. Air Astana shares led the declines, hinting at the beginning of a local downtrend. Kaspi shares, which rose 2.5% on Nasdaq, also show signs of reversal. Today, the market opened 0.3% higher, with Kaspi.kz leading the gains (+1.9%). BCC, which also reported earnings, is up 0.95%.
Currency. USDKZT is trading today at 511.18, slightly above its 50-day moving average. Yesterday, Reuters reported that Russian authorities are considering weakening the ruble to 100 per dollar. However, neither USDKZT nor USDRUB showed any reaction to this news.