As we enter March, global markets are cautious following escalating geopolitical tensions surrounding Iran. Any increase in conflict in the Middle East has the potential to trigger significant volatility, primarily through a spike in oil prices, which would fuel global inflation and disrupt supply chains. For local investors, this external risk compounds an already challenging domestic environment. Key potential factors to watch this month will be the performance of the ZAR, which is highly sensitive to global risk sentiment, and the impact of rising fuel costs on both corporate earnings and consumer inflation. In this climate, investors are likely to prioritise companies with defensive characteristics, strong balance sheets, and business models that are less susceptible to international oil price shocks and local consumer pressures.
Pepkor has once again demonstrated the resilience of its discount retail model, delivering strong growth in a highly competitive and constrained consumer environment. In its voluntary trading update for the quarter ending December 2025, the company reported an impressive 12.9% rise in group revenue to R29.9 billion. This performance was boosted by strategic acquisitions, including Legit and OK Furniture. Beyond acquisitions, sales grew by a respectable 5.2%, showcasing the enduring appeal of its core PEP brand. A significant indicator of institutional confidence was the recent disclosure that Ninety One, a major asset manager, increased its stake in the company to 6.26%. This combination growth, successful integration of new brands, and a vote of confidence from a major investor highlights the positive outlook, leading to a potential valuation gap of 7%, which could close from its current share price.
Reinet Investments offers a unique and compelling proposition as a defensive rand-hedge share, a quality that becomes particularly attractive during local currency volatility. The company's primary asset is its stake in British American Tobacco (BTI/BAT), a global tobacco giant with strong, defensive earnings. This provides a substantial buffer against South African economic weakness. However, recent analysis highlights that Reinet is also gaining attention for its strategic investments in unlisted, high-growth assets, including private equity and specialist funds. This dual structure offers investors both stability and long-term growth potential. For investors seeking refuge from rand volatility, Reinet's structure is worth looking into. It has a potential share price appreciation of approximately 6.21% from its current level to trade at R569.64 for the month.
Wilson Bayly Holmes is navigating a mixed environment. While the construction and engineering group recently reported flat interim earnings, its long-term project pipeline provides a much stronger outlook. The finalisation of the deal to build the R8 billion Cape Winelands Airport, a major, multi-year infrastructure project, provides significant forward revenue visibility. While current results reflect past challenges, the investment case is now forward-looking, focused on the execution of this and other major projects. The Cape Winelands Airport contract is a potential catalyst expected to drive future earnings, leading to a potential share increase of approximately 8% from its current share price.
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