Our Comments and Expectations
External background. The U.S. market was closed yesterday in observance of Martin Luther King Day. This morning, sentiment is negative — S&P 500 futures are down 1.1% amid threats by Donald Trump to impose tariffs on eight countries opposing his attempt to gain control over Greenland. Additional pressure comes from ongoing concerns about Trump’s attacks on the Fed Chair and uncertainty regarding a potential successor. At the same time, the earnings season and the AI sector have not delivered any negative surprises so far.
In Europe, continental indices declined by 1.2–1.3% yesterday, while today’s futures point to a more moderate drop. Heightened political tensions are once again pushing gold prices higher and U.S. government bond prices lower. In Asia, all major indices are trading in negative territory, with losses exceeding 1% seen only in Japan’s Nikkei 225. Oil is trading around $64.
KASE Index. The KASE index has risen for the third consecutive session, breaking out of its sideways consolidation and setting new all-time highs. At present, commodity-related stocks dominate market activity.
Index stocks. Kazatomprom continues its confident rally, setting new highs both on the local market and on the LSE. GDRs surged another 6.5% yesterday. We have previously detailed the key growth triggers, primarily linked to rising electricity consumption by U.S. data centers focused on AI services. Based on the current trend, the U.S. will likely need to accelerate the development of new power generation sources, including small nuclear reactors.
Combined with limited uranium supply, this could lead to a significant increase in uranium prices this year (up to 50%, according to BofA estimates), making the sector particularly attractive. For now, we recommend “staying on the rally wave” while closely monitoring prices for the emergence of a 4-hour or daily bearish divergence, which could signal a potential pullback.
Additionally, by the close of the session, KASE-listed shares were trading at a 4.7% discount to GDRs due to currency differences — a gap that is highly likely to be closed as early as today.
Another commodity company continuing its rally is Solidcore, a direct beneficiary of rising gold prices. Gold, notably, is up another 2.5% this morning to $4,708, marking new all-time highs. We also recommend maintaining positions in this stock.
KazTransOil ranked second in terms of gains on KASE: while the shares did not show a technical breakout, trading volumes increased significantly. A gradual decline persists in Halyk Bank shares, although GDRs have moved into a relatively narrow sideways range.
Currency. The dollar is beginning a corrective wave, mirroring the growth wave observed in late December and early January. This aligns with our wave-based USDKZT scenario, under which the dollar may locally decline toward 502.6 tenge. In early February, USDKZT could break below the 500 tenge level amid the tax payment period.