Market overview prepared by analysts from the Association of Financial Professionals of Kazakhstan (AFP).
Currency Market During Wednesday's trading, the exchange rate for the USD/KZT pair fluctuated within a narrow range, settling at 527.14 tenge per dollar (-0.33 tenge). It is clear that the demand for foreign currency from economic entities (for import payments and foreign services, servicing external debt) was almost entirely met through the sale of export currency revenues by KGS entities and high volumes of fund conversions from the National Fund (750-850 million dollars in January). Furthermore, the high acquisition rate may have also weakened the atypically increased demand for foreign currency at the beginning of the year.
At today’s session, the USD/KZT pair (10:40 ALA) is trading at 524.5 tenge per dollar.
Diagram 1. USD/KZT:
Source: KASE
Money Market Short-term rates for repo transactions and currency swaps remain close to the lower boundary of the base rate (TONIA – 14.31%, SWAP_1D – 9.78%), largely due to a structural liquidity surplus in the system. This can also be inferred from the high volumes of liquidity being withdrawn in the framework of the NBK's deposit auction (on Wednesday, the withdrawal volume amounted to almost 2 trillion tenge at an annual rate of 15.25%). Against this backdrop, the NBK's open position remains at a net debt level of 7.4 trillion tenge to the market.
Diagram 2. NBK Deposit Auction:
Source: NBK
Stock Market Wednesday's trading day on the Kazakhstan stock market ended with moderate growth – the KASE index settled at 5,711.9 points (+0.59%). The driving force behind this movement was the shares of BCK (+4.6%), as well as Kcell (+1.6%) and KMG (+1.5%), which occurred against a neutral news background. As a rule, the influx of liquidity into the market in the first half of the year occurs in anticipation of dividend payments and reinvestment of received bonuses. Market focus is on the operational reports of KazTransOil (January 20) and Kazatomprom (January 31).
Oil Brent oil prices declined on Wednesday, closing at 76.2 dollars per barrel (-1.2%). According to the U.S. Department of Energy, gasoline inventories in the country increased by 6.33 million barrels, totaling 237.71 million barrels. Additionally, newly elected U.S. President Donald Trump stated on Wednesday that as soon as he takes office, he will immediately lift the ban imposed by the current leader Joe Biden on oil and gas extraction off the U.S. coasts.
Risk Assets Appetite for risk in global capital markets remains low, largely due to pro-inflation macro statistics and expectations of heightened inflationary processes following Donald Trump's inauguration. Last week, the number of new jobless claims in the U.S. fell to 201,000 (-10,000), marking the lowest level since February 2024. Furthermore, it has been revealed that President-elect Donald Trump is considering declaring a state of emergency in the country's economy to provide a legal basis for implementing import tariffs. In this context, we note the concerns of FOMC members regarding the future trajectory of inflation related to Donald Trump's imminent return to the U.S. presidency.
Safe-Haven Assets In risk-free instruments, the main change was observed in the dollar index (+0.5%) amid expectations of a more cautious approach to monetary policy normalization by the Federal Reserve due to higher inflation risks.