The market overview was prepared by analysts from the Association of Financial Experts of Kazakhstan (AFK).
Currency Market
The USD/KZT exchange rate at the end of Tuesday's trading decreased to 520.11 tenge per dollar (-1.72 tenge) with a slight increase in trading activity: the trading volume amounted to 191.8 million dollars (+39.1 million). It is evident that the growth in foreign currency supply, against the backdrop of the upcoming start of the quarterly tax period (15.02) and sales by the National Bank of Kazakhstan (about 1.1 billion dollars in February), fully covered the current demand associated with the payment of import contracts and the servicing/repayment of external debt. Additionally, external factors, such as a corrective increase in oil prices and a significant decline in the US dollar index, may have provided some support to the national currency.
Diagram 1. USDKZT:
Source: KASE
Money Market
Money market rates increased by the end of Tuesday: the average weighted TONIA rate rose to 14.78% per annum (+16 b.p.), while the one-day currency swap rate SWAP-1D reached 11.23% per annum (+90 b.p.). Meanwhile, trading activity noticeably decreased again: the trading volume amounted to 521.7 billion tenge compared to the previous session's value of 851.5 billion tenge. At the same time, liquidity withdrawal through deposit operations on Tuesday amounted to 1.1 trillion tenge (100% of demand) at an annual rate of 15.25%. The open net position for National Bank operations remains at approximately 7.6 trillion tenge in net debt to the market.
Stock Market
At the end of Tuesday's trading, the KASE index rose to 5,571.44 points (+0.3%) amid an increase in the value of shares of KMG (+1.4%), Kcell (+0.8%), and Kaspi (+0.7%). In the absence of significant corporate events, local investors may have shown increased interest in these companies in anticipation of strong operating results for the past year (reports will be published at the end of February). Among the debt market events, the placement of short- and long-term bonds by the Ministry of Finance of the Republic of Kazakhstan, with a total volume of 36.8 billion tenge and annual yields of 13.75% and 14.00%, respectively, can be highlighted.
Oil
Brent crude oil prices ended Tuesday's trading session at 76.1 dollars per barrel (+0.1%) following statements from US President Donald Trump regarding increased sanctions on Iranian oil. The signed order may result in a reduction of Iran's oil exports by 1.5 million b/d. At the same time, pressure on quotes was exerted by data on oil and gasoline inventories in the US: last week, their increase was 5.0 and 5.4 million barrels, respectively. Regarding the tariff wars between the US and China, analysts believe that their impact on the global oil market may be minimal, as both countries can find alternative markets for their raw materials.
Risk Assets
Major US stock indices increased between 0.3% and 1.4% at the end of Tuesday's session amid strong corporate results from large American companies. Shares of data analysis company Palantir surged 24% after raising revenue forecasts for the current year. Additionally, financial results exceeding market participants' expectations were reported by Alphabet, PepsiCo, Merck, Pfizer, and PayPal. According to S&P estimates, 211 companies from the S&P 500 that reported earnings for the fourth quarter of last year surpassed analysts' expectations.
Macroeconomic data from the US was unexpectedly weak: the number of job openings in December fell by 556,000 compared to the previous month, reaching a two-year low of 7.6 million. Orders from US manufacturing companies decreased by 0.9%, amounting to 578.5 billion dollars, marking the most significant decline in six months.
Defensive Assets
On Tuesday, defensive assets showed mixed results: the US dollar index dropped by 1.0% as Donald Trump's tariff threats were interpreted by the market more as negotiation tactics rather than a final goal. Meanwhile, the price of gold increased by 0.7% amid ongoing uncertainty regarding trade relations between the US, China, Canada, and Mexico. Some tension in the geopolitical situation was added by Donald Trump's statements about the potential entry of the US into the Gaza Strip for its infrastructure and economic recovery.