Our Commentary and Expectations
External Background: The S&P 500 index has reached a record level of 6,000 points, with a minimal increase of 0.1%. The small-cap Russell 2000 index, benefiting from Trump’s policies, rose by 1.5% yesterday, significantly outperforming the major three U.S. indices. The technology sector and mega-cap companies showed a slight decline, while banks closed the session in positive territory. Tesla shares surged by 9%. Bloomberg believes Trump’s victory could increase global debt risks due to rising deficits and interest rates. In an extreme scenario, India, the Philippines, Saudi Arabia, and Brazil may increase their debt burden by $4.2 trillion, while U.S. debt could reach 150% of GDP by 2034. Meanwhile, investors are anticipating tomorrow's inflation data. The core CPI is expected to maintain the same growth rate on a monthly and annual basis compared to September. In Europe, indices also showed growth yesterday: the pan-European Stoxx 600 gained 1.1%, and Germany’s DAX rose by 1.2%. In Asia, Hong Kong’s Hang Seng fell by 3.2% this morning following news that Trump is forming his cabinet with prominent China adversaries like Marco Rubio and Mike Waltz. Mainland China’s CSI 300 initially rose on news of tax cuts for home purchases in major cities, but later also turned negative. Commodity assets are declining amid the ongoing dollar rally, with oil trading at $71.7. Bank of America believes OPEC+ faces a “difficult choice” as non-OPEC supply growth accelerates, and demand growth slows by 2025.
Bonds: The yield on 10-year U.S. Treasuries remained relatively neutral at 4.33%. Corporate bonds showed a slight decline.
KASE Index: The KASE index rose by 0.9%, reaching a new historical high after almost three months. Technically, the upward trend was confirmed. The main driver of this growth was Halyk Bank, which also reached new highs.
Index Stocks: Halyk Bank shares rose by 5.7%, triggering growth in the cooling KASE index. The probable reason for this rise is expected dividends, likely to be approved on December 9, which would make the payments semiannual, as with KEGOC. Notably, Halyk Bank’s quarterly report and conference call will take place on November 18-19. KazTransOil also showed solid growth, with shares attempting to break out of a prolonged sideways trend. The company released its 9-month report concurrently. On the LSE, ADS Kaspi showed the largest growth, though this did not impact the technical picture, with shares remaining under pressure from the 50-day moving average. Interestingly, Halyk Bank’s GDRs did not show growth yesterday, meaning the currency difference with common shares is minimal.
Currency: USDKZT closed yesterday above 495 tenge. Today, there is a slight strengthening of the tenge, mainly pressured by the rising dollar index (DXY).