Our comments and expectations
External backdrop. The S&P 500 fell 0.9%, continuing its correction. The positive effect of the U.S. Treasury’s statement about buying back long-dated bonds has faded, and yields have risen again. Treasury Secretary Scott Bessent spoke about greater potential for share buybacks and an upcoming fiscal policy plan. Asian markets are moderately positive this morning, bonds are stabilizing, S&P 500 index futures are up 0.2%, oil is trading at $93.4, and gold has reached its highest levels since May.
KASE Index. KASE is showing mixed dynamics: yesterday the index fell 0.6%, indicating that the correction may still continue, while today it is rebounding 0.8% at the open. Moreover, in the current session all stocks without exception are in positive territory, which is usually seen only when there is a strong, broad positive trigger for the market.
Index stocks. Earnings season is now in full swing, and this time it is noticeably more lively and emotional than usual for the local market. Let’s start with KEGOC — we assessed the financial results for the second quarter as positive. Quarterly revenue continued to grow amid a significant tariff increase, which delivered higher margins for the third quarter in a row. On the other hand, capital expenditures continue to rise, and the company is most likely entering a new large-scale investment cycle requiring significant investments in new projects. We also expect higher dividends for the first half, but not more than 100 tenge per share. Interestingly, against the backdrop of profit growth and simultaneous stagnation in quotations, the P/E multiple is steadily declining and increasingly approaching the levels of BCC (3.2x) and Halyk Bank (4x). With this picture, it is notable that investors react more strongly to the negative from isolated power outage incidents, like on August 14, than to the positive dynamics in financial indicators. Second, we note Kazatomprom’s report, which led to a 3.6% decline in the shares and a 2.7% drop in the GDRs. By preliminary assessment, the report was moderately negative: despite a 16% increase in the realized price, operating profit did not grow, while profit attributable to shareholders fell 23%. Additionally, the company lowered its revenue guidance and raised its forecasts for mining cash costs and capital expenditures. A positive point was the preservation of production and sales plans. Among individual names, we note the rise in Kaspi shares, which recovered fairly quickly from the initial negative reaction to the second-quarter report. At the same time, it should be taken into account that the stock is relatively not far from the upper boundary of the ascending channel, and the RSI has already moved into overbought territory. We also draw attention to Solidcore’s rise on AIX and the rally in gold prices amid a weaker dollar in the global market. Today is the last day to buy HSBK shares before the record date, and already on Monday sell-offs may begin.
FX. Today the USD/KZT pair is testing the most important level of the current calendar year — 455.4 tenge, which is the low of the previous wave of tenge strengthening in late April. The latest attack by tenge buyers was clearly driven by a weaker dollar amid the U.S. government debt theme, as even the ruble strengthened against the USD, having fallen almost continuously since early July.
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