As we move into August, various global and domestic factors are expected to influence market performances. Key areas contributing to current market volatility include macroeconomic conditions, geopolitical developments, and local economic initiatives.
The new Government of National Unity (GNU) is looking to stimulate economic growth and attract foreign investment through regulatory reforms and infrastructure projects. Early indications suggest it has boosted investor confidence, leading to increased capital inflows and a more optimistic market outlook.
Post pandemic economic recovery efforts are in full swing, focusing on addressing unemployment, stimulating domestic demand and improving business conditions.
Eskom’s performance, as well as energy policy, continue to be critical. There’ve been some improvements in energy supply, however, issues with load shedding remain a significant risk.
Persistent rail and port infrastructure issues are hurting key industries, particularly mining. Investors will closely monitor the progress in addressing these logistical challenges.
With all this in mind, what should you invest in this month? Here are our top three picks:
Alexander Forbes Group (AFH) has shown promising growth in recent years as share prices have surged over 71% since 2021. Its latest earnings report provides further insights into the company's performance and potential. AFH has a strong history of paying dividends and has made consistent payouts for the past eight financial periods, making it attractive for income oriented investors. The latest earnings report revealed a 19% increase in dividend payouts, reflecting the group's confidence in its future performance. A 16% increase in headline earnings per share (HEPS) to R0.53 indicates a consistent growth rate, which is a positive sign for investors. The increasingly aging population presents opportunities for AFH's retirement consulting and investment management services. The share price presents a 14% potential return to trade at R7.75.
Investing in African Rainbow Minerals (ARI) presents a potential return of 16.7% to trade at R248.79. ARM is set to become the sole owner of the Nkomati Mine in Mpumalanga, acquiring the remaining 50% stake from Norilsk Nickel Africa (NNA). This strategic move solidifies control over the mine, known for its rich deposits of nickel, copper, cobalt and platinum group metals, which are essential for the renewables market. Although currently under care and maintenance, ARM's commitment to responsible mining is demonstrated by allocating R836 million for the mine's rehabilitation. The deal is expected to be finalised later this year. Full ownership will enable ARM to restart operations and expand its influence in the local nickel market, aligning with its strategy to consolidate mining assets and enhance its presence in the South African mining sector.
Naspers' (NPN) strategic focus and recent financial performance, with a market capitalization of R618 billion, make it a major player in the technology sector. It benefits from its substantial investments in global tech companies through its subsidiary, Prosus. The recent appointment of Fabricio Bloisi as CEO brings strong leadership, given his track record of transforming iFood into a leading food delivery service in Latin America. Naspers has demonstrated impressive growth, with core headline earnings per share more than doubling to $11.48 and its e-commerce businesses achieving profitability. The company’s substantial stake in Tencent and its diversified tech portfolio, including investments in PayU and various e-commerce platforms, offer significant growth potential and exposure to the popular tech sector. With an increasing focus on innovation and strategic investments, Naspers is well-positioned for future growth. The share price has a potential to trade up to R4072.77 or increase 14.69%.
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