Freedom Broker analysts believe that Kazakhstan’s stock market is in a consolidation phase; however, as early as August the KASE index may receive a new impulse thanks to the start of the corporate reporting season. A more detailed breakdown can be found in the biweekly review from Freedom Broker experts.
KASE retains potential to break out of the sideways range
The KASE index continues to move in the 7625–7760 point range, which formed back in mid-June. Despite the lack of a sustained upward trend, Freedom Broker analysts note that the technical picture is gradually improving.
In the experts’ view, August could be a turning point month for the local market. The start of a new reporting season could become a catalyst for the KASE index to break out of consolidation.
Halyk Bank remains the main favorite
The growth leader over the past few weeks has been shares of Halyk Bank of Kazakhstan (HSBK). From June 14 to 28, the stock rose by more than 4% after the board of directors recommended paying a second dividend since the start of the year of 28.1 tenge per share. Taking into account the 30.1 tenge already paid in the spring, the total annual dividend could amount to 58.2 tenge per share, which corresponds to a yield of about 15.3% relative to the July 28 closing price.
Which stocks look most promising
In addition to Halyk Bank, analysts positively assessed the prospects of gold miner Solidcore Resources (SLDR), as well as carrier Air Astana—shares of both companies rose by almost 4% from June 14 to 28. Stocks of Bank CenterCredit (CCBN) and KazMunayGas (KMGZ) are also of interest for local trading.
At the same time, the world’s largest producer and seller of natural uranium, Kazatomprom (KZAP), remains the market’s laggard. On July 16, the company’s shares and global depositary receipts (GDRs) fell below the 200-day moving average, and later showed the maximum daily decline.
Macroeconomics supports the market, but risks remain
An additional factor for the market was the decision by the National Bank of Kazakhstan to cut the base rate to 16.75% amid a slowdown in annual inflation to 10.3%. At the same time, the regulator warned that further monetary easing is not guaranteed.
Another positive development was the resumption of operations of the Caspian Pipeline Consortium (CPC) after a temporary stoppage. This reduces the risks of a reduction in Kazakhstan’s oil exports, since about 80% of Kazakhstan’s exported oil supplies pass through the CPC.
External backdrop remains mixed
Global markets continue to show high volatility. Despite rising oil prices and positive dynamics in certain Asian venues, investors remain cautious following statements from the U.S. Federal Reserve about maintaining a tough approach to fighting inflation.
According to Freedom Broker analysts, it is precisely the combination of external uncertainty and a relatively strong tenge that is currently limiting the growth potential of Kazakhstan’s market. However, the start of corporate reporting could change investor sentiment in the coming weeks.
Economic momentum in early July
Kazakhstan’s stock market remains in a consolidation phase since mid-June: the KASE index continues to trade in a narrow range after a period of heightened volatility. Despite the absence of a pronounced trend, certain stocks are showing notable moves. In July, the growth leaders were Air Astana, Solidcore Resources, and KEGOC, while Kazatomprom shares remained under pressure amid a strengthening tenge.
At that time, the National Bank reported that Kazakhstan’s GDP grew by 4.1% year on year in the first half of the year thanks to strong momentum in the non-oil sector, where growth exceeded 5%. The main contribution came from construction, manufacturing, transport, and trade. At the same time, annual inflation in June slowed to 10.3%, although pressure from food, fuel, and services prices persisted.
This is not an individual investment recommendation.