The market overview was prepared by analysts from the Association of Financiers of Kazakhstan (AFK).
Currency Market The balance of supply and demand in the currency market is slightly improving, which is reflected in the decrease in volatility and stabilization of exchange rate fluctuations. As a result of Thursday's trading, the USD/KZT rate continued to decrease, reaching 494.98 tenge per dollar (-0.36 tenge). At the same time, trading activity in the market dropped to 184.2 million dollars (-6.0 million). Low trading volumes may indicate the completion of major foreign currency sales for quarterly tax payments. Nevertheless, the potential for further strengthening of the tenge has not yet been exhausted.
In today's session, the USD/KZT pair (10:50 ALA) is trading at 497.65 tenge per dollar.
Diagram 1. USD/KZT Rate:
Source: KASE
Money Market The yield on overnight repo operations slightly increased on Thursday, settling at 13.77% per annum (+16 b.p.), while one-day swaps for the USD/KZT pair cost market participants 8.81% per annum (-39 b.p.). At the same time, 880 billion tenge (100% of demand) was placed at the deposit auction with a yield of 14.25%. Against this backdrop, the open position on operations of the NBK remains at 7.5 trillion tenge in debt to the market.
Stock Market As a result of Thursday's trading, the KASE index settled at 5,414.7 points (+0.15%). The rise in the prices of Kcell shares (+1.5%) and BCK (+1.3%) was partially offset by the decline in the shares of Kaspi (-1.6%). Today, the focus is on the financial report of KMG, while next week quarterly results from Kazatomprom are expected.
Oil The price of a barrel of Brent crude oil rose to $74.4 per barrel (+2.1%) on Thursday. Concerns about potential supply disruptions from the Russian Federation may have pushed quotes higher against the backdrop of escalating war between Russia and Ukraine. Specifically, on Thursday, Russia used a medium-range ballistic missile for the first time against the Ukrainian city of Dnipro. According to the President of Russia, this was a response to the initial strikes by Western precision weapons on military targets within Russian territory. In turn, the President of Ukraine described this as the second recent step towards escalating the conflict following the dispatch of troops from North Korea to the front.
Risky Assets Liquidity continued to flow into the risky asset market (key U.S. stock indices rose between 0.5-1.1%), primarily due to favorable corporate events and disinflationary macro statistics. Notably, strong financial results were reported by Snowflake (shares rose by 32.7%), Deere & Co (+8.1%), Salesforce (+3.1%), etc. Meanwhile, the number of Americans filing for unemployment benefits for the first time fell to 213,000 (-6,000), the lowest level since the end of April this year. Analysts had predicted an increase in claims to 220,000. It is also worth noting the ongoing influx of liquidity into the cryptocurrency market: the first cryptocurrency is just a step away from the psychological mark of $100,000 (at the moment the price is $99,000) on expectations of significant regulatory changes in the industry and the creation of a strategic reserve of bitcoins in the U.S. under the new White House administration. In this context, it is noteworthy that on Thursday, SEC Chairman Gary Gensler announced plans to step down on January 20, 2025, coinciding with the start of the second term of elected President Donald Trump. Recall that it was Gary Gensler who insisted on the registration of nearly all cryptocurrencies as securities; during his tenure, more than 100 regulatory actions have been registered against companies in the industry.
Diagram 2. BTC Rate:
Source: Coinmarketcap
Defensive Assets In risk-free instruments, the main changes on Thursday were observed in gold (+0.9%), whose quotes were recovering after a prolonged decline and amid fears of escalating conflict in Ukraine.