Shares of Kazakh Telecom and People's Bank plummeted by 12% in the month of February.
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The Kazakhstan stock market found itself in volatile waters in mid-February, as rumblings of a potential Russia-Ukraine military conflict emerged. According to a report by the Kazakhstan Stock Exchange, the market bobbed horizontally until the 22nd, and then plunged into the "red" zone thereafter.
Companies with stocks traded on the London Stock Exchange took the most waves, with Kaspi.kz JSC bearing the brunt. On February 24, Kaspi's shares plummeted by over 50% in London, while Kazakhstan's National Savings Bank JSC and National Atomic Company "Kazatomprom" JSC saw their shares drop by 15% and 9% respectively. The KASE index, Kazakhstan's benchmark index, dipped by 5.28% since the beginning of February, returning to levels last seen in October 2021.
Kazatomprom was the sole bright spot in the index, its shares up by 5% over the month. A statement cited a planned transition to nuclear energy in Europe, aimed at reducing dependence on Russian natural gas, as a potential catalyst for the surge in uranium prices by 13.1% in February.
KEGOC JSC suffered the smallest dip, with shares shrinking by just 0.5%. Kcell JSC's shares dropped by 2.2%, while Kazakhstan Telecom JSC and Kazakhstan's National Savings Bank JSC experienced the largest decreases of 12.4%. Despite no reported corporate events, Kazakhstan Telecom JSC and Kazakhstan's National Savings Bank JSC scheduled conferences to announce their annual financial results for March 15 and 16 respectively.
The market capitalization ended February at 23.1 trillion tenge, down 3.5 trillion tenge or 13.3% from the previous month. The weighty correction in Kaspi's stock price was primarily responsible for this decline.
- Geopolitical tensions and economic sanctions, triggered by the Russia-Ukraine conflict, impacted global stock markets, including Kazakhstan's. The conflict and subsequent sanctions had a particular influence on Kazakhstan's economy, especially oil exports, due to the country's heavy reliance on Russian pipelines.
*Kaspi.kz, a prominent fintech and banking company in Kazakhstan, may have felt the economic uncertainties and potential transaction disruptions. Its business revolves around financial services and is, therefore, sensitive to overall economic conditions and geopolitical tensions.
*The National Savings Bank, being a financial institution, faced similar uncertainties. Financial institutions often encounter challenges in times of economic instability, due to potential impacts on liquidity and asset values.
Kazatomprom, a significant uranium producer, likely grappled with global supply chain disruptions and potential energy market impacts. The uncertainties in global commodity prices and demand could have affected the company's stock price.
While specific stock price movements for these companies in February 2022 aren't detailed, we can anticipate they all experienced some degree of volatility due to the broader economic and geopolitical implications of the conflict. The extent of the impact would have been contingent on various factors, such as the companies' exposure to international trade, reliance on Russian pipelines, and the overall resilience of the Kazakh economy.
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In the context of the impact of geopolitical tensions on the Kazakhstan stock market, the finance sector, including companies like Kaspi.kz, may have experienced volatility due to economic uncertainties and potential transaction disruptions. Similarly, financial institutions such as the National Savings Bank could have faced challenges in times of economic instability, given potential impacts on liquidity and asset values. On the other hand, Kazatomprom, a significant uranium producer, might have grappled with global supply chain disruptions and potential energy market impacts due to uncertainties in global commodity prices and demand.
The various stock prices in the KASE index may have shown different degrees of volatility in February 2022, depending on factors such as each company's exposure to international trade, reliance on Russian pipelines, and the overall resilience of the Kazakh economy.
