Anglo American Plc, Naspers Ltd. and Shoprite Holdings Ltd. are among JPMorgan Chase & Co.’s top 2012 South African stock picks as the investment bank favors mining, media and retail companies.
JPMorgan has an “overweight” recommendation on South African equities, which may rise 15 percent by the end of next year, strategists including Deanne Gordon wrote in a note yesterday. The recommendation means investors should hold more of the shares than are represented in benchmark indexes. This gain lags behind JPMorgan’s estimated 22 percent increase for emerging markets, according to the note.
The investment bank is “neutral” South African cash, which may return 5.5 percent and “underweight” government bonds, which may rise 2 percent in 2012, the strategists wrote.
African Rainbow Minerals Ltd., a diversified mining group, Harmony Gold Mining Co, Aspen Pharmacare Holdings Ltd., the largest maker of generic medicines in the southern hemisphere, British American Tobacco Plc and retailers Mr. Price Group Ltd., The Spar Group Ltd. and Woolworths Holdings Ltd. are also among JPMorgan’s top ten stock picks for 2012.
Stocks to avoid, according to JPMorgan, include Standard Bank Group Ltd., Africa’s biggest lender, Telkom South Africa Ltd., Africa’s largest fixed-line phone company, Massmart Holdings Ltd., South Africa’s biggest food and general-goods wholesaler, and Group Five Ltd., a construction company.