Our Comments and Expectations
External Background: The S&P 500 rose by 0.2% yesterday. Despite the modest result, it was enough to once again set historical highs. Bloomberg reports that two-thirds of respondents in the Markets Live Pulse stated that betting on early easing of monetary policy is the "dumbest" among popular trades ahead of 2024. Meanwhile, the earnings season continues in the U.S. market, and this week investors are expecting results from companies such as Netflix, Tesla, and Intel. Strategists from two leading Wall Street banks are divided on profit expectations: Goldman Sachs believes that falling inflation boosts earnings, while JPMorgan warns that companies are quickly losing pricing power. In Europe, indices rebounded from the 50-day moving average and managed to show growth. The Stoxx 600 added 0.8%, while indices in Germany and the UK showed more modest gains. This morning, the Hong Kong Hang Seng is up by 2.5%, following news that Chinese authorities are aiming to mobilize around 2 trillion yuan (approximately $278 billion), mainly from the offshore accounts of Chinese state-owned enterprises, as part of a stabilization fund to buy stocks on the mainland. They also allocated at least 300 billion yuan from local funds to invest in onshore stocks. Oil rose by 1.7% yesterday and settled above the 50-day moving average.
Bonds: The yield on 10-year U.S. Treasury bonds declined yesterday from the 50-day average, dropping slightly below the 4.1% mark.
KASE Index: The KASE rose by 0.5% yesterday, contrary to our expectations of consolidation. However, it is still difficult to say whether this increase has provided any technical advantage to the market.
Index Stocks: An unexpected rise was observed in KMG shares. Recently, the stock had already shown sharp growth followed by a correction. In this case, the situation is similar, as the prices have once again hit the resistance level of 12,000 tenge. Kcell continues its growth, marking its seventh consecutive session of increase. During this time, the stock has gained more than 13%. On the LSE, Kazatomprom shares are experiencing a correction for the fourth consecutive session. From a technical perspective, this looks like a pullback from the growth that occurred from January 9 to 16. It is worth noting that Kazatomprom was not an isolated case, as leading uranium ETFs also fell.
Currency: Yesterday, the growth rate of the tenge against the dollar was the highest since January 4. The U.S. currency dropped below 448 tenge. We believe that the strengthening is associated with increased currency sales from the National Fund, which is being done to avoid excessive pressure on the dollar in February, where demand for tenge will already be high due to the tax period. However, this is still just a hypothesis. We think that the impact of the earthquake in Almaty on the exchange rate will be limited.
Key Market News
(=) KZAP: The National Atomic Company "Kazatomprom" has ceased to own the LLP "Taiqonyr Qyshqyl Zauyty."