Top 3 Shares to Invest in This July

As we enter July, the South African financial market, and global economic conditions such as inflationary pressures, fluctuating commodity prices and geopolitical developments continue to shape market dynamics, contributing to the current volatility. However, a notable positive development impacting the market is the introduction of the new Government of National Unity (GNU). This initiative has been designed to stimulate economic growth and attract foreign investment through regulatory reforms and infrastructure investments. Early indications suggest the GNU has boosted investor confidence, leading to increased capital inflows and a more optimistic market outlook. The GNU's focus on enhancing business conditions and fostering a more competitive economic environment is expected to drive growth across key sectors. As July unfolds, investors will be observing the continued impact of the GNU on market performance, making it a month for strategic investment decisions.

The three following companies are worth considering adding to your portfolio:

Bytes Technology Group (BYI) presents an investment opportunity due to its strong market presence and impressive financial performance. Initially spun out of Altron in 2020 and listed on the Johannesburg Stock Exchange (JSE), the company's market capitalisation has grown from R21 billion to R31 billion. Approximately 60% of the group's revenue comes from reselling Microsoft products in the UK. For the year ending February 2024, the company reported a 26.7% increase in gross income and a 15.8% rise in headline earnings per share (HEPS), driven by key contract wins in the public sector and continued demand from corporate customers. With a revenue increase of 12.3% to R4.9 billion, the company is a promising investment for sustained growth, offering a potential return of 12.3%. It is currently trading at R146.38 per share.

Investing in South32 (S32), which shows potential for an 11% upward movement to trade at R53.26, presents a compelling opportunity driven by several key factors. Firstly, rising global demand and constrained supply of bauxite and alumina in China are expected to lead to potential price spikes in the alumina market, benefiting this major producer. Secondly, South32's ambitious plans to potentially double the size of its Wessels mine in South Africa's manganese-rich Kalahari basin underscore its strategic positioning in the high-grade sector, considering South Africa's global dominance over the resource. However, infrastructure challenges, particularly in rail and port capacities, are currently hindering these plans. South32 is actively engaging with Transnet to enhance logistical capabilities. With favourable market conditions and strategic initiatives underway, South32 appears well-positioned to capitalise on future growth opportunities in both the alumina and manganese markets.

Barloworld (BAW) emerges as an intriguing investment opportunity, leveraging its international footprint and diverse operations across Southern Africa, Russia and other emerging markets. The company recently strategically divested its Spanish and Portuguese operations to focus on expanding in Mongolia through the acquisition of Wagner Asia Group. Despite a revenue decline of 8% in the first half of the 2024 fiscal year, Barloworld has shown resilience with a notable 43% revenue increase in Barloworld Mongolia, highlighting its ability to capitalise on growth opportunities in high potential markets. A strong on-balance-volume buy signal suggests positive momentum for the stock. Since April, the share has surged over 50% from the lows of R60.00 ,leaving room for a further 12% increase to trade at R101.31.

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