The market overview has been prepared by analysts from the Association of Financiers of Kazakhstan (AFK).
Currency Market
The national currency has been gradually regaining its lost positions in the last working days of February: on Tuesday, the USD/KZT exchange rate decreased to 498.76 tenge per dollar (-3.39 tenge). The trading volume was slightly below the average daily figure since the beginning of the year (236.4 million) and amounted to 214.5 million dollars (+55.5 million). It is worth noting that the tenge is receiving some support from regular foreign currency sales as part of the NBK operations, a significant withdrawal of tenge liquidity from the market, the traditional improvement of the trade balance surplus, and the strong strengthening of the ruble on expectations of an improved geopolitical situation.
At the same time, at the end of the month, market players typically adopt a wait-and-see stance ahead of the publication of transfer volumes from the National Fund to the republican budget for the new month (to be published on 03.03).
Diagram 1. USD/KZT Exchange Rate:
Source: KASE
Money Market
The demand for tenge liquidity remained elevated on Tuesday in the money market, which led to a moderate increase in overnight rates (TONIA rose from 15.05% to 15.72%, SWAP_1D from 10.54% to 10.59%). It is important to remember that amid the tax period in the country, the open position for NBK operations has significantly decreased to 7.7 trillion tenge from above 8.5 trillion tenge a week earlier.
Diagram 2. Open Position for NBK Operations:
Source: NBK
Stock Market
Following foreign markets, profit-taking was also observed in the local stock market: the KASE index fell to 5,583 points (-0.44%). Moderate selling was noted in six out of 10 index instruments, largely driven by investors fleeing risk in global capital markets. However, the upcoming dividend payout season may contribute to an influx of additional liquidity into the market.
Oil
Against the backdrop of worsening overall market sentiment, oil prices ended Tuesday’s trading down to $72.5 per barrel (-2.4%). Key pressure factors included an increase in crude supply from Iraq, weak macro data from Germany and the United States, concerns over demand decline due to trade wars, and speculation about increased OPEC+ production following Donald Trump's calls to boost output.
Risk Assets
Sales in the technology sector continued on Tuesday, dragging down Nasdaq (-1.4%) and S&P 500 (-0.5%). The trigger for this could have been the consumer confidence statistics in the U.S. (in February, the index fell to 98.3 points compared to 105.3 in January). Additionally, U.S. President Donald Trump instructed his country's Department of Commerce to consider imposing tariffs on copper imports to the U.S., which may have negatively impacted market sentiment. Today, the main focus is on the key report of the week – Nvidia's financial results for the last quarter.
Safe-Haven Assets
Liquidity from risk assets has evidently been flowing more towards cash, as risk-free instruments are not showing significant increases. Conversely, on Tuesday, there were sales in gold (-1.1%), which may signal an overheating in the risk-free asset market.