Our Comments and Expectations
External Background
Yesterday’s trading session was mainly negative for external markets. The S&P 500 fell by 0.9%, dropping for most of the day before a slight recovery at the end. Market concerns are linked to the upcoming elections and earnings season, especially with intense focus on the volatile tech sector. After trading ended, investor sentiment improved as Tesla’s shares rose by 12.1% in post-market trading. Tesla’s Q3 2024 report showed profits of $2.2 billion, surpassing analysts' expectations. The company produced around 470,000 vehicles and delivered 463,000 units, slightly below projections. Tesla anticipates another strong quarter for deliveries and increased volumes for the year. European indices have declined for the third consecutive session after reaching local highs (with the DAX reaching historical highs). Robert Holzmann, the governor of Austria's central bank, forecasts another 25-basis-point rate cut in December despite continued inflationary pressures. Asia has shown moderately negative trading this morning. In Japan, the yen hit a three-month low amid a strong dollar supported by rising yields and election concerns. Further currency weakening could prompt the Bank of Japan to hint at a rate hike as early as December. Oil is trading at $75.65. The volume of Brent oil option contracts has surged by over 25% this month, reaching a record high amid supply disruption concerns in the Middle East. U.S. crude oil inventories rose by 5.47 million barrels last week, according to EIA data.
Bonds
The rally in U.S. Treasury yields continues, with the 10-year reaching 4.24% yesterday, marking the highest level since late July.
KASE Index
The KASE index closed slightly lower yesterday. The external background and parts of the domestic outlook are unfavorable for the local market today. However, no major drop in trading activity is evident at the market opening.
Index Stocks
Yesterday’s KASE chart shows high trading volumes. Most of this activity focused on Kazakhtelecom, which briefly hit 40,000 tenge during the session — a historical peak reached for the second time. The previous high was recorded on July 10. This volatility has raised questions among investors, especially with new information expected on the Altel/Tele2 sale. KEGOC also showed increased trading volume, with shares down by 5.3% due to the upcoming dividend cutoff date of October 28, with payments starting November 1. Meanwhile, our GDRs and ADSs, which had been climbing, moved into a local pullback. Nevertheless, shares in Narodny Bank, Kazatomprom, and Kaspi have held above support levels.
Currency
The dollar is trading around 485.3 tenge today, slightly above its 50-day moving average. Globally, the dollar has been strengthening continuously since September 30.