Our Comments and Expectations
External Background. Yesterday, the S&P 500 experienced the peak of the sell-off driven by risk aversion amid trade wars — the index fell by 4.84%, marking its worst performance since June 2020. The Nasdaq lost 5.4%, its steepest decline since September 2022. Donald Trump introduced the highest U.S. tariffs in a century on all imports — even uninhabited islands were subject to the minimum 10% reciprocal tariffs, while high tariffs were applied to around 60 countries. As of now, market participants believe that the short-term consequences of these measures are likely to be rising prices in the U.S. and a slowdown in economic growth, potentially leading to a recession. Bond traders have increased their bets on Fed rate cuts, now pricing in a 50% chance of four 25-basis-point cuts this year, although a rise in inflation may present serious challenges for the Fed. In Europe, indices declined by 1.6% to 3%. Emmanuel Macron urged companies to halt investments in the U.S., calling Trump’s measures “brutal and baseless.” In Asia, major indices were down by 0.6%–2.5% this morning, with mainland Chinese indices and South Korea’s Kospi showing more modest declines. Fitch downgraded China’s long-term credit rating from A+ to A. Oil dropped by 6.4% yesterday and fell below $70 this morning. It was reported that OPEC+ agreed to add 411,000 barrels per day to production next month.
Bonds. The yield on 10-year U.S. Treasuries fell to its lowest level since October 2024, while corporate bonds also declined, especially high-yield U.S. bonds.
KASE Index. Today, KASE opened down by 0.6% — not the worst result considering the turmoil on global exchanges and the fact that Kazakhstan received the highest tariff rates among Central Asian countries.
Index Stocks. It has been revealed that Kazakhstan received a 27% reciprocal tariff rate. The Ministry of Trade reported that the tariffs imposed by the U.S. administration under President Donald Trump will affect 4.8% of Kazakhstan’s exports, as the majority consists of raw materials. Yesterday, Kaspi shares led local gains with a surprising rebound after an almost identical drop the previous day. On international markets, Halyk Bank and Kaspi fell by 4.3% and 4.5%, respectively, while Kazatomprom and Air Astana saw only half those losses. At the opening of today’s session, the reaction has been generally moderate: Bank CenterCredit is down 2%, while Kaspi, KMG, and Halyk Bank are losing 1–1.2%. Kazatomprom and Air Astana remain in positive territory, while defensive stock KEGOC shows a completely neutral result.
Currency. USDKZT quotes show little reaction to the global drop in the dollar — the dollar is trading at 504 tenge, slightly breaking above the 50-day moving average. On the other hand, the euro jumped against the tenge to 557.6, reflecting the strengthening of the EURUSD pair.