Our comments and expectations
External background. The S&P 500 rose 0.63% at the start of the new week. The shares of technology companies were in the lead. Google was particularly distinguished, with which, as it turned out, Apple is negotiating to introduce their Gemini AI into the iPhone. This turn of events gave Alphabet shares a 4.5% boost and showed that Apple has not made much progress in its own artificial intelligence efforts. The central event of the coming days will be the Fed meeting, from which investors are waiting for more detailed information about the regulator's determination to ease policy. However, apart from the United States, the current week will be more loaded than ever this year on rate decisions from world central banks: borrowing costs for 6 of the 10 most traded currencies will be announced. In Europe, the Stoxx 600 slowly declined for the third consecutive session. According to a Bloomberg survey, Germany is in recession and its economy is unlikely to grow this year. According to respondents, GDP will shrink by 0.1% in the first quarter, although a month earlier analysts predicted stagnation. A moderately negative picture is noticeable in the Asian markets this morning. The Korean Kospi and Hong Kong's Hang Seng are declining. The Bank of Japan raised rates for the first time in 17 years to a range from 0 to 0.1%, ending a long era of negative rates. Oil continued to grow after the recent IEA market report.
Bonds. The US 10-year yield continues to test important local-medium-term resistance levels at around 4.35%. According to Michael Wilson of Morgan Stanley, this could undermine the rally in US stocks. The Bank of Japan promised to continue buying its government bonds and maintain favorable conditions, despite the transition of rates to the positive zone.
The KASE index. KASE lost 1.3% yesterday, falling to the levels of March 6. This is the most noticeable decline in the market since December 8, 2023, or for a period of more than three months. According to the results of this session, the opinion is strengthening that the local market has taken a pause in growth. It is worth paying attention to whether the current session will also be negative, since in a negative scenario it may give hints of the beginning of a corrective wave after a long growth.
Index shares. It is noteworthy that the decline occurred after the almost complete completion of the reporting season, in which companies for the most part reported moderately positive. One of the leaders of the decline was Halyk Bank, which at the end of last week released a report reflecting a 22% increase in net profit per share. There have been some rumors of future non-payment of dividends in the market, however, we believe that such a scenario is unlikely to be expected. The bank has a lot of liquid assets, as well as a high level of capital adequacy to pay dividends to shareholders – 1.4 trillion tenge in accounts and 3.7 trillion tenge of liquid assets in the form of securities and financial assets. The deepest decline was seen yesterday for Air Astana, despite the fact that the report previously looked neutral.
Key market news
(=) KCEL: Kcell JSC reported financial results for the fourth quarter and January–December 2023