Our Comments and Expectations
External background. U.S. stock markets closed higher yesterday, once again renewing historical highs. The S&P 500 and Nasdaq indices rose by 0.4% and 0.7%, respectively. The main driver was the technology sector, boosted by news that Nvidia will supply chips to OpenAI. Apple also gained 4.3% on expectations of strong demand for the iPhone 17. However, some Fed officials expressed doubts about the need for further rate cuts. S&P 500 futures are showing neutral dynamics this morning. In Europe, the broad Stoxx 600 index fell by 0.1%, mainly due to declines in the automotive and banking sectors. In Asia this morning, South Korea’s Kospi rose 0.5%, while Japanese markets were closed for holidays. Meanwhile, the Hang Seng dropped 1%, and China’s CSI 300 fell even more — by 1.2%. Oil prices decreased by 0.2%, affected by increased supply from Iraq within the OPEC+ framework. The dollar index retreated after three days of growth, failing to break the local downtrend.
Bonds. The yield on 10-year U.S. government bonds continued its gradual rise, reaching 4.15%.
KASE index. Yesterday, the KASE index fell by 0.2%, continuing its slow consolidation near historical highs. However, it remains close to local trendline support, which still leaves room for a potential new wave of growth.
Index stocks. The main catalysts for the decline were three stocks: KazMunayGas, Kcell, and Kaspi. KMG fell by 1.4% after reaching the upper boundary of the trendline, which it failed to break on Friday. Kaspi declined following the 2.2% drop in its ADRs on Nasdaq. Yesterday’s ADR dynamics indicated that the stock failed to break the downtrend, meaning the growth scenario must be postponed for now. We also note the dividend gap on Halyk Bank’s GDRs, which occurred one day later than on KASE. Kcell also dropped by 1.2%, making a big move toward retesting June lows. If the stock falls below 3,240 tenge, continued selling pressure can be expected. On the positive side, we note Kazatomprom and KazTransOil. The uranium giant gained 1.5%, supported by a 2.8% rise in its GDRs on the LSE. At one point, the GDRs were up 4.2%, while uranium spot prices are approaching their June highs. KazTransOil rose by 1.3%, marking its best daily gain since late May. In the opening minutes of trading, the stock jumped 5%, though overall volumes were modest at just 50.5 million tenge. We also highlight lower trading volumes in Air Astana, which had been elevated earlier. BCC shares gained 0.6% yesterday, continuing their fourth day of consolidation around the new 5,000-tenge level.
Currency. Yesterday, the dollar rose sharply by recent standards, gaining 1.8 tenge and breaking above the 542 tenge level with higher volumes. It is likely that in the coming days we will see a move above the local 544 tenge level.