Monthly JSE Investment Insights: October 2025

A Month of Historical Volatility and Opportunity

October has earned a global reputation as a month of change, often associated with major market turns and heightened volatility, and the Johannesburg Stock Exchange (JSE) is no exception. Historically, it has been a period where investors tread with caution, mindful of its track record for delivering both sharp downturns and powerful rallies. This year, as investors enter the final quarter, this inherent unpredictability is amplified by a complex global environment. Investors will need to be especially vigilant, as geopolitical tensions and key economic data have the potential to significantly move markets. All eyes will be on upcoming local inflation (CPI) and retail sales figures for a snapshot of consumer health, while globally, commentary from the US Federal Reserve and economic data from China will heavily influence sentiment and commodity prices. With corporate earnings largely reported, the focus now shifts to how management teams are mitigating these persistent challenges, making October a month for identifying both risk and opportunity.

Clicks Group Limited (CLS)

Clicks continues to prove its defensive strength in a challenging retail environment. The company's financial year concluded in August 2025, with the full financial results scheduled for release on 23 October 2025. Forward-looking guidance, provided in its interim results announcement from April 2025, set a positive tone for the full year, projecting that headline earnings per share (HEPS) would increase by a healthy 11% to 16%. This growth is driven by sustained, non-discretionary demand for health products and the continued success of its private label offerings. While some analyst price targets were previously in the R345 to R355 range, the share is now trading near these levels. More recent analysis suggests the share is trading at or near its fair value, indicating that while the company's performance is strong, the current share price may already reflect this positive outlook.

African Rainbow Minerals Limited (ARI)

African Rainbow Minerals (ARI), a major diversified mining company, is navigating a difficult commodity cycle, a fact clearly reflected in its financial results for the year ended 30 June 2025. The company reported a decline in headline earnings to R2.7 billion, a drop from the R5.08 billion reported in the prior year. This decline was primarily driven by lower Platinum Group Metal (PGM) prices and persistent logistical challenges impacting exports. Despite the fall in profitability, the company's financial position allowed it to declare a final dividend of R6 per share. This brought the total dividend for the financial year to R10.50 per share, when combined with the interim dividend of R4.50. While the PGM division faced severe challenges, the iron ore division remained a key contributor, and its performance is closely tied to potential challenges like China's economic stimulus measures. Given this environment, analyst price targets show variance, but the consensus leans towards a potential recovery, with many recent estimates clustered in the R230 to R245 range, suggesting room for growth if commodity prices stabilise. However, for this month, they predict a R202.30 price target – a potential 8.6% increase from current levels.

Alexander Forbes Group Holdings (AFH)

Alexander Forbes is showing signs that its strategic turnaround is bearing fruit. In a recent trading update for the five months ending August 2025, the financial services group reported a strong 13% increase in operating income, with growth across all its core segments. Now streamlined after unbundling its insurance arms, the company's focus on high-margin consulting and administration services is paying off, evidenced by an 18% growth in assets under administration and management. This positive momentum has caught the market’s attention, and analysts see further potential. The consensus price target has been steadily climbing, with recent estimates placing the shares' fair value in the region of R7.80 to R8.50, reflecting a belief that its advice-led strategy and improved operating leverage will continue to drive earnings and unlock shareholder value. The share has the potential for a 13% increase from the current level to trade at R8.50.

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** This article was prepared by BROKSTOCK analyst Maboko Seabi