As we enter October, investors should be mindful that this month has historically seen increased market volatility, often referred to as the "October effect." While there is no solid statistical basis for the October effect, market participants tend to be cautious given past market crashes, such as the 1987 Black Monday. Investors should keep an eye on company earnings reports and macroeconomic data, which could signal how Q4 will unfold. The last quarter is crucial for stock markets as it typically reflects holiday consumer spending and year-end corporate performance, which could all shape market momentum heading into the new year.
Here are three JSE shares to consider this October:
Despite current challenges at Impala Platinum (IMP), it presents a strategic investment opportunity. The company's platinum group metals (PGM) production grew 13% to 3.65 million ounces, which positions it well for future recovery as global demand for these metals stabilises. While metal prices, especially palladium and rhodium, have slumped, Implats is actively pursuing growth in alternative industries like energy transition, which could drive future demand. The share price has the potential for upward movement, with the target at R114.97, presenting a 9.67% jump from the R104.80 level.
The recent expansion of Investec (INL) into Dubai is a strategic move to serve the growing community living outside the country, particularly citizens relocating to the UAE. By establishing a presence in this financial hub, Investec aims to connect with family offices, which manage an estimated $700 billion to $1 trillion in wealth. This positions the financial services provider well to capture lucrative wealth management opportunities. Additionally, the positive business sentiment boosted by the GNU signals a potential increase in investment activity, especially in public-private partnerships for infrastructure and utilities. Local banks are expanding internationally and this move will ensure that Investec remains competitive in a rapidly evolving market. The share price has a potential upside of 8.57% to trade at R140.57.
British American Tobacco's (BTI) recent earnings results for the half-year ending June 2024 showed a strong performance. Its strategic shift towards smokeless products, which now represent 17.9% of group revenue, brought in 1.4 million new consumers, showcasing significant growth in these categories. However, with an 8.2% decline in reported revenue due to divestments in Russia and Belarus, BTI remains on track to meet its full-year guidance, showing resilience. The company is positioned for a strong second half which will be reported on the 6th of February 2025, while its sustainable share buyback programme highlights a commitment to returning cash to shareholders. BTI will pay its last dividend of R13.69 per share for the year, with the ex-date on the 19th of December. The share price has an upside potential of 10.24% to trade at R696.50.
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