Our Comments and Expectations
External Background. The S&P 500 closed flat yesterday, while European indices posted another round of gains. Representatives from both sides held negotiations on tariffs but made only minor progress in resolving trade disputes. U.S. officials stated that most tariffs under the package would not be lifted. Meanwhile, tensions intensified in Asia: China ordered its airlines to halt purchases of Boeing aircraft, prompting Trump to publicly call on China to contact him to initiate talks. According to a BofA survey, investor sentiment toward the global economy is at its lowest in nearly 30 years. Despite Germany’s ZEW expectations index falling far short of forecasts, European markets rose by 1.4–1.6%. Futures for the Stoxx 600 are currently down 1.2%, and the DAX is down 1.1%. The Asian morning session opened in negative territory: the Hang Seng is down 2.4%, and the Nikkei 225 — down 1%. UBS downgraded China’s 2025 GDP growth forecast to 3.4% — the most pessimistic among major banks. Oil prices are down 1.2% this morning, trading at $64 per barrel. The IEA cut its global oil demand forecast by nearly one-third — to 730,000 barrels per day — citing the impact of the trade war. S&P 500 futures are currently down by 1.25%.
Bonds. The 10-year Treasury yield fell to 4.32% yesterday, approaching its 50-day moving average. Meanwhile, corporate bonds showed modest gains.
KASE Index. The KASE Index had a successful session yesterday — a 1.5% increase allowed it to break out of a local consolidation range and begin recovering losses from April 4. Local highs are now around the 5,700-point level, with intermediate resistance at 5,655. Judging by the negative positions of Western index futures, the external backdrop is likely to weigh on the local market today.
Index Stocks. Halyk Bank rose 3.4% yesterday. The stock is midway through a recovery toward its historical high of 314 tenge. Nevertheless, we lean toward a “hold” recommendation, as there is little time left before the shareholder register cut-off date. Historically, buying and price increases tend to slow 1–2 weeks prior to the record date. BCC was another top gainer, adding 2.4%, but the stock remains within a sideways trend until it breaks above the 2,880 tenge resistance level. On the LSE, Kazatomprom GDRs rose 2.1% — we continue to highlight this stock as one of the most promising in terms of rebound potential after a previous correction.
Currency. USDKZT is rising today, which may signal a breakout from a flag formation and is a negative sign for the tenge. A breakout above the 522 level could indicate a potential weakening of the tenge toward 530 per dollar. The decoupling from the DXY dollar index and the USDRUB exchange rate continues. The tenge once again hit historic lows against the euro, and the ruble rose to 6.34 tenge.