Our Comments and Expectations
External Background. Yesterday was a successful session for global markets, with indices rising 0.6–1.8% in China, Europe, and the U.S. The S&P 500 gained 0.7%. The technology sector, particularly semiconductor stocks, performed well, while financial sector stocks declined. This morning, the picture is changing due to the escalation of Trump’s trade war and investors shifting towards safe-haven assets and cash. The U.S. president has ordered a 25% tariff on steel and aluminum imports, stepping up efforts to protect politically significant American industries while affecting some of the country’s closest allies. The tariffs will apply broadly to all steel and aluminum imports into the U.S., including those from Canada and Mexico. He also warned that the rate could increase further. U.S. aluminum premiums have surged to their highest level since 2022. Investors are now awaiting inflation data later this week and Federal Reserve Chair Jerome Powell’s testimony before Congress. Powell is expected to refrain from making predictions about how tariffs might impact inflation. In Europe, the Stoxx 600 and DAX continued to rise, reaching new all-time highs. ECB President Christine Lagarde stated that disinflation in the Eurozone is well underway, but increasing global trade tensions pose risks. In Asia, Hong Kong’s Hang Seng and China’s CSI 300 indices have shown mixed performance throughout the session. Oil has climbed to $76 per barrel despite the strengthening U.S. dollar. Reports indicate that Russia’s oil production fell to 8.962 million barrels per day in January, which is 16,000 barrels per day below the OPEC+ quota. Gold is rising as a safe-haven asset.
Bonds. The yield on 10-year U.S. Treasuries remained unchanged at 4.5%. Corporate bonds also remained neutral.
KASE Index. The KASE Index experienced a volatile session yesterday, with many stocks declining. However, the 0.3% drop did not significantly impact the local index chart, and consolidation continued.
Index Stocks.
BCC is supporting the KASE Index with its rebound. Currently, its weight in the index stands at 12%, making it a "blue-chip" stock. For comparison, Kazakhtelecom, with a market capitalization of $830 million (versus BCC’s $984 million), accounts for only 2.7% of the index. This allows the rising CCBN stock to have a much stronger influence on KASE compared to the declining KZTK stock. The biggest loser yesterday was KMG, which moved against the rising oil prices. However, the stock is "correcting" today as trading begins, rising by 1.1%. Kazakhtelecom shares are also up by almost 1%. On the LSE, depositary receipts of Halyk Bank (+0.7%) and Kazatomprom (+1.3%) showed growth. Both stocks are trading near their 50-day moving averages.
Currency.
The tenge has strengthened for the sixth consecutive session. The pace of appreciation has been faster than expected, with the exchange rate already reaching 505 tenge this morning, a level we previously considered the peak for the current rally driven by the tax period. We believe that by the start of tax payments on February 15, the pace of the tenge’s appreciation will slow down partially or completely.