The market overview was prepared by analysts from the Association of Financial Professionals of Kazakhstan (AFK).
Currency Market As a result of Tuesday's trading on KASE, the exchange rate for the USD/KZT pair fell to 497.18 tenge per dollar (-0.18 tenge) with an average trading volume of 220.8 million dollars (-24.0 million). The tenge may receive significant support closer to the end of the current week due to the mandatory conversion of 50% of foreign currency earnings by KGS entities (the regulation was announced on November 19), the tax week, and high transfers from the National Fund. In particular, the peak of quarterly tax payments to the budget is expected between November 22-25, with the deadline for paying rent tax, additional payments from subsoil users, corporate income tax, mineral extraction tax, and VAT ending on November 25. Meanwhile, during the previous period of a similar regulation regarding the sale of foreign currency by KGS entities (from February to June 2023), their average monthly sales volume was 291.0 million dollars.
In today's session, the USD/KZT pair (10:23 ALA) is trading at 495.75 tenge per dollar.
Diagram 1. USD/KZT
Source: KASE
Money Market Indicative rates on the money market showed a decline on Tuesday: TONIA decreased from 13.65% to 13.58%, and SWAP fell from 8.62% to 8.46%. Trading volumes remain high at 0.4 trillion tenge. At the same time, 1.3 trillion tenge (100% demand) was placed in weekly deposits at the National Bank with a yield of 14.25%. The open position on operations by the National Bank of the Republic of Kazakhstan continues to hold at approximately 7.5 trillion tenge in debt to the market.
Stock Market The KASE index rose to 5,429.7 points (+0.6%) at the end of Tuesday's trading amid sustained demand for shares of the People's Bank (+2.0%), Kazatomprom (+1.5%), and Kazakhtelecom (+1.5%). It is worth noting that last week the country's largest bank published strong quarterly financial results (in the third quarter of this year, net profit increased by 18%), after which some investment firms raised their target estimates for the company with a potential stock growth of 65%. Additionally, investors are anticipating the payment of additional dividends.
Oil At the end of Tuesday's trading, oil prices remained unchanged at 73.3 dollars per barrel, indicating the need for additional drivers for further recovery. Recall that the catalyst for growth at the beginning of the week was the expectation of escalating conflict between Ukraine and Russia. On Tuesday, Ukraine struck military targets on Russian territory for the first time using missiles supplied by the United States. Following this, the President of Russia approved a new version of state policy on nuclear deterrence, which expands the conditions for the use of nuclear weapons. However, it is evident that investors do not expect strikes on Russian oil facilities.
Risk Assets Liquidity has once again started to flow into the risk asset market (key U.S. stock indices rose between 0.4% and 1.0%), primarily due to favorable corporate events. For instance, Walmart reported strong financial results (shares rose by 3%), C3.ai announced a partnership with Microsoft (+25%), and Robinhood (+1%) is acquiring the portfolio management company TradePMR. Nevertheless, the main catalyst for growth is the anticipation of strong earnings from Nvidia (shares rose by 5%). The company's quarterly financial results will be published today after the market closes. Today, attention is also focused on data regarding weekly unemployment claims and speeches from certain members of the FOMC.
Safe Assets In risk-free instruments, the main dynamics were seen in gold prices (+0.9%), which are slightly recovering after prolonged sell-offs and concerns about escalating geopolitical tensions following the White House lifting restrictions on Ukraine's use of American weapons for strikes on Russian territory.