Our comments and expectations
External environment. US and European indices closed flat on Friday amid expectations of US–Iran negotiations. Inflation data reflected a sharp increase in energy prices following the outbreak of the war. The headline Consumer Price Index (CPI) rose from 2.4% in February to 3.3% in March. On a monthly basis, prices increased by 0.9%, in line with forecasts and marking the largest such rise since 2022. Core inflation, which excludes food and energy prices, rose more moderately to 2.6% YoY versus 2.5% a month earlier, while monthly core prices increased by 0.2%. US gasoline prices jumped by about 20% in March amid disruptions in global oil supply. Meanwhile, earnings season begins this week with Goldman Sachs reporting results, followed by JPMorgan, Citigroup, Wells Fargo, Bank of America, and Morgan Stanley. These banks are expected to deliver strong results, as market volatility has boosted trading activity. Overall, analysts expect companies in the S&P 500 to post around 12% YoY earnings growth. Oil traded moderately on Friday, declining by 2.2% to $94 per barrel of Brent. This morning, the picture has changed: oil has rebounded above $100, reaching $102 per barrel of Brent. Trump ordered a blockade of the Strait of Hormuz, stating that the US will intercept any vessels that paid Iran a fee for safe passage. The blockade will begin this evening; however, US forces will not impede the free movement of ships traveling to and from non-Iranian ports. At the moment, S&P 500 futures are down 0.6%.
KASE index. External factors continue to support sideways movement in the Kazakh market. The morning rise in oil prices will again support oil and gas companies in the index, but may put pressure on stocks that are listed on foreign markets.
Index stocks. The underperformer on Friday was Air Astana shares, which appear to be breaking downward out of a local consolidation range. The stock still has local support levels around 680 and 655 tenge. The strongest growth was shown by Halyk Bank shares. GDRs on the LSE even attempted to test a key resistance level at $33 but slightly pulled back. A minor correction is likely in today’s trading, bringing prices closer to the center of the current sideways trend. Kaspi continued its pullback on Friday after an unsuccessful test of an important downward trend line. Prices may return to $73–74 if negative sentiment in the US market persists. Meanwhile, KMG shares may rise to 31,500 tenge over the next couple of sessions.
Currency. The dollar declined on Friday. The exchange rate failed to consolidate around 480 tenge, which led to strengthening of the tenge. This morning USDKZT is trading at 474.11. We believe the market (including non-residents) is rushing to lock in high yields in government securities while interest rates remain elevated.