Tenge began to strengthen after the reports of the National Bank

Our comments and expectations

External background. Yesterday, S&P 500 rose by 0.9%. Trump supported the growth of AI-related company stocks by announcing that SoftBank, OpenAI, and Oracle would invest an initial $100 billion in an AI infrastructure project, which will create thousands of jobs. His rhetoric on global trade was better than expected, despite the fact that Canada and Mexico may face direct tariff threats as soon as next week. He is also considering a 10% tariff on China in response to the flow of fentanyl from that country to Mexico and Canada. Moreover, Trump’s executive orders helped boost the stocks of space companies, while putting pressure on electric vehicle manufacturers. According to a survey by Bank of America Corp, there are early signs that investors are preparing for a growth in stocks that lagged behind in previous rallies. Among corporate news, Netflix stocks surged by 14.4% in after-hours trading after reporting its largest quarterly increase in subscribers by the end of 2024. In Europe, stock prices showed modest growth, moving into overbought territory on the daily chart. In Asia, a mixed trend is observed in the morning: indices in Japan, Korea, and Taiwan are rising due to optimism in the AI sector, while the Chinese market is declining due to concerns about 10% tariffs. Oil has dropped for the fifth consecutive session.

Bonds. The yield on 10-year U.S. government bonds was 4.58% yesterday. Bonds in emerging markets also showed a good increase.

KASE index. The KASE index dropped by 0.7% yesterday, signaling a potential exit from the local sideways trend. We view the 5700-point level as support to contain the pressure from correcting stocks.

Index stocks. The previous growth leader, BCC, became the leader of the decline in the market yesterday. A correction in these stocks had long been expected, as they had been in the overbought zone according to the RSI index for an extended period. Also, a bearish shadow was observed on the daily candle the day before after breaking the 2800 tenge level. Kazakhtelecom stocks also decreased, which was related to specific news. Yesterday, the Vice Minister of Digital Development, Askhath Orazbek, reported that the ministry is interested in keeping the funds from the sale of "Mobile Telecom-Service" within Kazakhtelecom and not transferring them to the National Fund or Samruk-Kazyna. However, he noted that the ministry may intervene in their operations. The Vice Minister also stated that he does not see risks for the full payment of dividends. Therefore, there are now three possible scenarios for resolving the situation: 1) Dividends are directed to the National Fund and Samruk-Kazyna; 2) Dividends remain within Kazakhtelecom and are used for communications development; 3) Dividends are paid to all shareholders. We view the second and third scenarios as favorable for investors.

Currency. The tenge sharply strengthened against the dollar after news of a mirror purchase amounting to 750 billion tenge (equivalent to $1.4 billion) for Q1 2025. The 50-day moving average for the dollar is at the level of 519 tenge.