Our comments and expectations
External backdrop. The S&P 500 rose 0.6% yesterday, marking a fourth straight session of gains and setting a new all-time high. The Nasdaq also ended the day at a record level, adding 0.4%. Support came from lower bond yields, stabilization in oil, and expectations for strong quarterly earnings. The 10-year government bond yield fell from 5.3% to 5.28%, but this morning it is rising to 5.31%. Yesterday’s rally was once again led by companies tied to the development of artificial intelligence. The probability of a Fed rate hike in October fell to around 20%. European indices added 0.4–0.8% amid improving conditions in the debt market. However, this morning oil is rising again by about 1%, to $101.7: the market is assessing threats to production due to a storm approaching the Gulf of Mexico and an escalation in Saudi Arabia’s confrontation with the Houthis. Selling predominates in Asia: the Nikkei is down about 0.5%, the Hang Seng is down 0.6%, and Korea’s tech-focused Kospi is falling 1.5%. Today investors’ attention will be on the minutes of the Fed’s September meeting and the auction of 10-year Treasury notes. S&P 500 index futures are trading flat.
KASE Index. KASE closed flat yesterday, slowing somewhat after two sessions of gains and amid a lack of support from GDRs and ADSs. Trading volumes declined and remained around median levels. At the session high, the index reached 7,880 points, where resistance levels are located, so a neutral result can be considered logical. We believe KASE’s outlook today is moderately positive: in the current session, support may come from Halyk Bank and Kazatomprom; however, over a one-week horizon the probability of continued movement in a sideways trend remains.
Index constituents. While most other stocks closed flat, Air Astana and KazTransOil moved in opposite directions. KazTransOil rose 1.8% and overall remains in a solid uptrend channel with clearly defined boundaries. Thanks to yesterday’s rise, the quotes reached their highs since April 2019. As for Air Astana, yesterday’s decline had almost no impact on the local picture, where the quotes remain in a narrow sideways trend. The laggard among all names was Solidcore, whose shares fell after rising the day before. Overall, the shares are still in an uptrend, although the slope of the trend line has decreased, indicating a slowdown in the pace of gains. Nevertheless, the stock still has about 15.4% upside potential to the fundamental target of $15. Meanwhile, on the LSE, Kazatomprom’s depositary receipts jumped 3.6%, and sector ETFs rose 4–5%, supported by a Google–Constellation deal that предусматривающей investments of more than $4.3 bn to expand capacity at existing nuclear power plants. Additional positive news was the conditional approval of a loan of up to $4.2 bn to модернизации Vistra nuclear power plants.
Currency. USDKZT is declining for a second session in a row, to 448.4 tenge, after an unsuccessful test of resistance around the 50-day moving average. A more detailed FX comment is available in the article.