Best shares to buy in South Africa 2024
The South African market is becoming a very attractive place for investors with incredible potential. The country is frequently ahead of the curve with the application of innovative technology or new methods of operation e.g. green energy sources, online education, etc; South Africa, therefore, is a source of growth, and we can see this in the high rate of many listed companies; As the economy is expanding, we can see new industries growing quickly, such as telecommunications, infrastructure, and consumption; South Africa has seen more efficient fiscal and monetary policy over the last three decades. This has resulted in, among other things the reduction of interest rates, more manageable inflation rates as well as stable currencies. Even the public debt is lower as compared to the developed markets.
South Africa has a well-developed financial system that is centered around the South African Reserve Bank, which is the sole issuer of the rand which is the national currency. It is the one who formulates and implements monetary policies and oversees foreign exchange transactions. There are a variety of bank institutions that are registered and a few of them focus on commercial banking along with merchant as well as savings, investment, and discount banks. A capital market is active that is centered around Johannesburg Stock Exchange.
Based in South Africa, the Johannesburg Stock Exchange (JSE) was established in 1887. It is the longest-running and most prestigious Stock Exchange in Africa. Trading in its equity market through its counterpart, the London Stock Exchange had resulted in major latency and connectivity progresses. After a major outage, JSE is now hosting everything locally on its shores. The JSE ranks as the 12th most popular stock exchange according to market capitalization and is the biggest exchange on the African continent.
In this article, we will be discussing what are the best South African shares to buy this and the upcoming year along with the corresponding reasons. The vast majority of these shares will be listed on the Johannesburg Stock Exchange, which we will also cover in greater detail below in the article.
Johannesburg Stock Exchange
The JSE has been operating as a marketplace for trading financial instruments for more than 120 years. Since the JSE has transformed from an outcry that was based on the floor market to an advanced securities exchange that offers online trading and clearing and settlement of derivative instruments and underlying instruments that cover different asset classes. It also is a renowned regulator and has surveillance capabilities. The JSE also manages its own South African government bond market as a part of the National Treasury and is an important source of financial information.
The Johannesburg Stock Exchange covers multiple markets including the following:
- Capital Markets – equity market, equity derivatives, currency derivatives, interest rate market fees, commodity derivatives, and primary market fees
- Post-trade services – clearing, settlement fees, back-office services, funds under management
- Information services – colocation fees, other market data fees
- Trading & market services – trading services
JSE supports a wide array of financial markets including equities and bonds, and many different derivatives, as well Vanilla Swaps Bond Futures, Forward-rate Agreements. But let’s focus on the equity market for this article and discover what are the top prospects for investment in 2024.
With the abundance of stocks available to choose from, deciding which ones to purchase is a daunting task. This is especially true when you’re just beginning to venture to explore the world of shares and stocks. For starters, experienced investors won’t ever buy shares without doing thorough study and analysis. To put that into perspective this article will discuss the top shares to purchase in South Africa right now. We will provide the latest news on the listed stocks and the reasons why purchasing them is a good idea in the first place.
ASPEN – Aspen Pharmacare Holdings
Aspen Pharmacare Holdings Limited is a South African-based global specialty and branded pharmaceutical business with a global presence that covers more than 50 countries. It also has advanced manufacturing capabilities, both in active pharmaceutical components (APIs) and in finished dosage forms. The company is focused on marketing and manufactures a wide selection of post-patent and branded products, as well as domestic brands that cover both consumer and hospital markets.
It operates through two key segments of business: Manufacturing and Commercial Pharmaceuticals. The Manufacturing segment deals with the production and distribution of APIs and final dose form products to third-party customers. The Commercial Pharmaceuticals segment comprises Regional Brands and Sterile Focus Brands which include Anaesthetics, Thrombosis, and other products. It owns approximately 23 manufacturing facilities across all the continents worldwide. The capabilities of its manufacturing cover many different types of products such as orals and liquids, as well as steriles, APIs, and biologicals.
- Share price on September 2020 – 121,932 ZAR
- Share price in September 2021 – 281,267 ZAR
- Increase: 130.6%
- #1090 on Forbes List by market value
- #1200 on Forbes List by profit
SASOL – Sasol Ltd.
Sasol Limited is an international integrated energy and chemicals company. The company creates and commercializes technology and constructs and runs facilities to manufacture a range of products streams, which include chemical fuels, liquids as well as low-carbon electricity. The operating business units of the company comprise mining, exploration, and production. The Company’s regional hubs for operations comprise South Africa Operations and International Operations.
The company operates around six coal mines, which supply the feedstock needed to its Secunda (Sasol Synfuels) and Sasolburg (Sasolburg Operations) complexes in South Africa. It sells market-ready fuels as well as oils, including bitumen, industrial heating fuels; naphtha, and illumination paraffin transportation fuels and industrial lubricants. greases, lubricants, cleaners and degreasers, automotive burning fuels, as well as fuels for burners.
- Share price on September 2020 – 131,233 ZAR
- Share price in September 2021 – 281,605 ZAR
- Increase: 114.5%
- #1689 on Forbes List by market value
- #922 on Forbes List by sales
- #216 on Top Regarded Companies 2019
ABG – Absa Group Ltd.
Absa Group Limited is a South African-based financial service provider providing a complete range of services and products for personal banking, credit cards, corporate and investment banking, as well as investments and wealth management along with insurance. The segments of the company comprise Retail and Business Banking (RBB). Absa Group launched back in 1991 and since then is headquartered in Johannesburg, South Africa.
Absa Group Ltd (Retail Banking) offers an array of retail banking services and products to customers of all ages and also provides credit for commercial customers. Absa’s Business Banking operates an insurance model that is based on specific value propositions that are aligned with the requirements of clients and customers and include direct interaction with customers through multi-channel interfaces like electronic banking.
- Share price on September 2020 – 90,736 ZAR
- Share price in September 2021 – 152,348 ZAR
- Increase: 67.9%
- #1225 on Forbes List by sales
- #1654 on Forbes List by profit
- #364 on Forbes List by Assets
- #722 World’s Best Employers 2020
BAW – Barloworld Ltd.
Barloworld Limited is a South African distribution company, which operates on an international scale. The company distributes international brands while offering comprehensive rental and fleet management, as well as product support, and logistics solutions. The main business segments of the company are Equipment and Handling, Automotive and Logistics, as well as Corporate. Barloworld Ltd was established in 1902 and since then has had a main headquarter in Sandton, South Africa.
The Equipment and Handling segment delivers mining and construction equipment across South Africa, Russia, and Mongolia. Its Automotive division is comprised of two business units: Rent a Car and Avis Fleet. The Logistics Division of this segment offers supply chain solutions for diverse industries. The Corporate segment encompasses all other functions, including the operation from the company’s office located in Johannesburg and the Treasury Department within the United Kingdom.
- Share price on September 2020 – 62,209 ZAR
- Share price in September 2021 – 117,905 ZAR
- Increase: 89.53%
FSR – FirstRand Ltd.
FirstRand Limited provides banking, investment, and insurance products as well as services to commercial corporate, public sector clients across South Africa and various African countries. The company is comprised of a variety of franchises for financial services that include First National Bank (FNB) as a commercial and retail banking institution; Rand Merchant Bank (RMB) is an investment and corporate bank; WesBank, its installment finance division, and Ashburton Investments, its investment management business. The company was formed in early 1998 and has headquartered in Johannesburg, South Africa.
The Company’s segments are FNB, RMB, WesBank, and FCC. FNB is a part of the commercial and retail sectors of South Africa. RMB also includes activities in the investment banking and corporate segments of South Africa. WesBank also has activities in asset-based financing and related products that are available in the commercial, retail as well as corporate sectors that span across the African continent and also in motor finance that is based on assets via MotoNovo Finance in the United Kingdom.
- Share price on September 2020 – 41,982 ZAR
- Share price in September 2021 – 64,818 ZAR
- Increase: 54.39%
- #286 on Forbes List by assets
- #706 on Forbes List by profit
- #906 on Forbes List by market value
DSY – Discovery Holdings Ltd.
Discovery Limited is an integrated South African financial services firm specializing in life and health insurance, as well as wellness, investments, savings products, short-term insurances, and credit card services. The company’s segments are Health South Africa, Life South Africa, Invest South Africa, Vitality South Africa, Health United Kingdom, Life United Kingdom, and few other segments. The Discovery Holdings Ltd was established by Barry Swartzberg and Adrian Gore in Sandton, South Africa. The company was initially launched in 1992.
The segments include South Africa Ensure, South Africa Bank, South Africa Distribution, Discovery Partner Markets, new business development expenses as well as the UK, US, SA, and Singapore head office expenses. The Company by way of Discovery Health provides administration services as well as managed care for members of the Discovery Health Medical Scheme. The Company via Ping Health offers policyholders in China insurance a variety of medical-related claims that are private. The Company by way of Discovery Life offers a variety of financial and insurance solutions to individuals and groups of policyholders.
- Share price on September 2020 – 103,362 ZAR
- Share price in September 2021 – 140,317 ZAR
- Increase: 35.7%
- #669 on World’s Best Employers 2020
- World’s Best Banks 2021
SBK – Standard Bank Group Ltd.
Standard Bank Group Limited is a bank based in South Africa. The Bank provides the services of transactional banking, saving loans, borrowing and investment services, as well as insurance and risk management, and wealth management. It operates with three business segments: Personal and Business Banking; Corporate and Investment Banking as well as Liberty Holdings Limited (Liberty). It provides fixed income, equity, commodities, and currencies to the world market. It provides investment banking services such as advice and debt products, as well as commodity finance and structured trade including debt capital markets as well as the equity capital market.
The Standard Bank Group also provides real estate financing and primary investment management services to the real estate industry. Its services and products for transactional use include the transactional banking industry, investor services as well as trade financing. It also intermediates the access to markets and risks reduction products to its customers to help meet their business needs which include commodities, foreign exchange, the credit market, interest rates, and equity instruments.
- Share price on September 2020 – 111,013 ZAR
- Share price in September 2021 – 147,359 ZAR
- Increase: 32.74%
- #225 on Forbes List by assets
- #1309 on Forbes List by market value
- #808 on Forbes List by profit
SAP – Sappi Ltd.
Sappi Limited is a wood-fiber company that specializes in providing printing and graphic papers, packaging, and specialty papers that dissolve wooden pulp (DWP) and along with products from related fields like lignosulfonate and nitrocellulose. The segments of the company include North America, Europe, and Southern Africa. The range of graphic papers is utilized by printers to create brochures, books, catalogs, magazines direct mail, as well as many other print applications.
Packaging and special papers can be employed to make such products as soup sachets carry bags, confectionery, and cosmetic packaging boxes for agricultural goods to export tissue wadding for household tissues and casting release papers utilized by manufacturers of products for the fashion, textile automotive, and household industries. DWP products are used all over the world by converters who make viscose fiber for textiles and clothing pharmaceutical products, and an array of household and consumer products.
- Share price on September 2020 – 27,106 ZAR
- Share price in September 2021 – 40,536 ZAR
- Increase: 49.54%
First of all, you would need to find all the companies listed on the Johannesburg Stock Exchange. While not all companies will be South African local companies, some of them will be high-performing international organizations also operating on the African continent. Since JSE lists hundreds of companies stocks, you would need to filter out the best-performing ones. In order to do so, you can Google separately the most advanced stocks of the year. However, the better approach is to find the companies that record the value growth of 40% or more compared to 2020. Alternatively, you could search for the best dividend-paying shares JSE 2020 and then look at the performance numbers of those stocks in 2021.
Why look at dividend pays? because this is what indicates how likely is the company to pay the dividend to you as a stockholder. The companies have a choice either to pay or not pay dividends for the given quarter or year. If the company’s performance is poor, the management may decide to abstain from paying out the dividends, which is not a piece of good news for you. However, you may still retain the shares in hope of receiving the payments next quarter or year. Also, make sure to check the frequency of dividend payments and their past track record of them.
The companies that we have listed above in the article are all high-performing in 2021 and are expected to keep growing until 2024, as well. Compared to last year, they have grown more than 35% in value. Some of them even hold notorious places on Forbes’ top companies’ lists by assets, market value, profits, sales, etc.