January 2025: Key Trends and Opportunities for Investors

As the new year begins, January 2025 sets the tone for investors across local and global markets. Traditionally a period of portfolio repositioning, January often sees a mix of volatility and opportunity as market participants adjust to new economic data, corporate strategies, and geopolitical developments. For investors, this month will likely be shaped by the release of December retail sales figures, mining production updates, and insights into consumer spending trends from the festive season.

Here are three potential investments for January:

Investing in Dis-Chem Pharmacies (DCP) presents a good opportunity given its recent financial performance and strategic expansion plans. In the six months ending August 2024, Dis-Chem reported a 16.3% increase in headline earnings per share to 67.7 cents, driven by effective cost management, and a 9.6% rise in group revenue to R19.6 billion.

The company also increased its interim dividend by 16.1% to 26.98 cents, suggesting confidence in sustained growth. Looking ahead, the pharmacy plans to add 30 000 more square meters of retail space and enter the life insurance market in early 2025, diversifying its revenue streams and enhancing its market position. These developments suggest a positive outlook for Dis-Chem with a potential upside of 10.13% to trade at R41.13, making it an attractive consideration for investors seeking exposure to the retail pharmacy industry.

Next, we have Harmony Gold Mining Company (HAR) which reportedly more than doubled its annual profit. Headline earnings per share rose to R18.52 from R8, driven by a 6% increase in gold production to 1.56 million ounces and a 16% rise in average gold prices. This financial strength enabled the company to declare a final dividend of R0.94 per share, up from R0.75. Strategically, Harmony is expanding its global footprint by advancing copper projects in Australia and Papua New Guinea, including the Wafi Golpu gold-copper joint venture and the Eva Copper project.

The recent appointment of Beyers Nel as CEO, effective 1 January 2025, showcases commitment to this growth trajectory. Harmony is reportedly considering the acquisition of the Ravenswood Gold Mine in Queensland for $2 billion, which would further enhance its Australian operations. These developments position Harmony as a strong contender in the gold and copper markets, making it an attractive option for investors seeking exposure to precious metals and strategic growth in the mining sector. For short-term investors, there’s potential for 9.74% upward share price movement this month.

Lastly, we have the Standard Bank Group (SBK) with strategic initiatives to expand services and enhance its market position across Africa. The bank has notably extended its offshore banking services in Mauritius to small and mid-sized African businesses, providing these enterprises access to international markets and diversified financial solutions. This move is expected to attract a broader client base, potentially boosting the bank's revenue streams.

Additionally, its commitment to innovation is evident through strategic partnerships with leading technology firms, aiming to enhance digital banking solutions and improve customer experience. These developments put Standard Bank in a favourable position for sustained growth, making it an attractive consideration for investors seeking exposure to the African financial sector. A potential 8% to trade at R245.66 is applicable.

Disclaimer: 

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** This article was prepared by BROKSTOCK analyst Maboko Seabi