Our comments and expectations
External backdrop. U.S. indices started the week lower: the S&P 500 lost 0.8%, the Dow - 0.7%, and the Nasdaq - 0.9%. The renewed pressure came from rising yields: the 10-year Treasury yield climbed to 5.23%, the highest since 2007. The trigger was a new wave of tensions around Iran. Trump rejected Tehran’s proposal to open the Strait of Hormuz and did not rule out new strikes after the midterm elections, while Iran’s foreign minister Araghchi said the country is ready to resume the war. November Brent futures rose intraday to nearly $109, but then pared gains, and since early September oil has risen by almost 18%. The market is pricing in about a 66% probability of an October Fed rate hike. The market’s decline was partly cushioned by a 1.7% rise in Nvidia after announcing a large-scale share buyback. In Europe, the Stoxx 600 closed unchanged: investors were cautious amid higher oil and concerns about inflation and rates. On the positive side, we note the U.S. and China’s agreement on mutual tariff reductions worth $30 bn and the launch of an AI dialogue. This week, investors will focus on the PCE inflation indicator and Friday’s jobs report. Asian markets are down this morning following Wall Street: the Nikkei is off about 1%, while the Kospi and Hang Seng are down 0.6%. U.S. index futures are down 0.2-0.3%.
KASE Index. KASE closed yesterday with a notable 0.8% decline, largely due to Kazatomprom shares, which came under pressure from the strengthening tenge and previously had a price premium to the GDRs. The index moved below local trend support, and the next move will depend on today’s and tomorrow’s share performance.
Index stocks. Kazatomprom shares posted a sharp 4.4% drop, converging with the GDR price after a long period of trading at a premium. The GDRs themselves fell 1.9%, approaching the trend support line; uranium stocks’ performance is also disappointing (ETF URA), which also fell 1.9%. On the other hand, we note gains in bank stocks. Kaspi.kz on Nasdaq rose 0.2%, although it was down as much as 1.3% intraday. Thus, the ADS rose for the second session in a row and so far are following a rebound scenario from the rising trend line. At the same time, on KASE the shares have a small discount to the ADS after yesterday’s decline. An even larger discount is now seen in Halyk Bank shares, which will likely rise today after the GDRs gained 1.5%. The securities broke a local sloping line and are gradually returning to highs, which is quite favorable for a local buy. KazTransOil shares continue to decline, now down 4.3% over the past three days. It is important for the shares to rebound from current levels to have a chance to continue rising. KEGOC recommended dividends of 81.25 tenge for 1H 2026, which is slightly below our expectations, as we were looking for roughly double-digit annual growth. Note the 4% drop in gold prices, which will likely put pressure on Solidcore shares, which yesterday pulled back 0.8% from their highs.
FX. USDKZT fell 0.7% yesterday to 439.75, the lowest since May 2024. The rate reached our target range of 439-440 tenge, where we are likely to see the first signs of buyer support.