Our Comments and Expectations
External background. Global indices had a strong session yesterday as stocks rebounded amid a drop in oil prices to around $100 per barrel. A day earlier, Trump stated that the U.S. would leave Iran within two to three weeks. However, the daily candlestick of the S&P 500 indicated that the market was not fully optimistic about the end of hostilities, and this morning those concerns were confirmed. In an address to the nation, Trump said that the main strategic objectives were close to completion. However, he later added that military actions could intensify and that the U.S. would deliver an “extremely strong strike” against Iran within the next two to three weeks. This undermined expectations of a quick resolution to the five-week conflict in the Middle East. During his nearly 20-minute speech, Trump also did not announce any changes in U.S. policy toward Iran and provided no specific details on how operations would be conducted. Following these remarks, oil prices started rising again toward $108 per barrel, while futures declined by 1.4%, exceeding the index’s gain during yesterday’s main trading session. Additionally, the UAE stated that it is ready to help the U.S. forcefully reopen the Strait of Hormuz. If that happens, it would become the first country in the Persian Gulf to enter the war against Iran. Asian markets are declining again this morning — losses are smaller in China and Hong Kong and more pronounced in Japan and Korea. Futures for European indices DAX and Stoxx 600 are down by 1.5–1.8%. Gold is falling by 3.9% amid a stronger dollar. U.S. Treasury futures are also declining, pushing their yields higher again.
KASE Index. KASE closed neutral again yesterday and is opening today with a decline of 0.5%. This time, quotes are already factoring in the decline of Kazatomprom and Kaspi shares on Western exchanges amid negative news this morning.
Index stocks. Yesterday, the strongest growth was shown by Air Astana shares despite a significant reduction in the recommended dividend. The rebound may have been driven by lower oil prices. However, at today’s opening the shares are falling by 3.1% as oil prices rise back to $108. KazTransOil shares also increased, though the overall market picture still reflects consolidation. At the start of today’s session, Kazatomprom shares are down by 2.1%, despite the GDRs rising by 4.2% yesterday. Investors likely expect a more substantial or comparable correction relative to the previous increase in global depositary receipts. Overall, HSBK and KAP GDRs remain in a broad sideways trend despite ongoing volatility. It is also worth noting that KMG shares are reacting moderately today, gaining only 0.9%.
Currency. The dollar is declining for the fourth consecutive session and has not yet reacted significantly to fluctuations in oil prices. At the time of writing, quotations are approaching the lows of July 2024, which can be viewed as a local support level. The next notable level is the Fibonacci level near 464 tenge. However, given that the RSI has entered the oversold zone, a further decline toward this level can currently be considered only within the framework of the ongoing downtrend in the USDKZT pair.