Johannesburg Stocks Gain for Best Monthly Advance Since February

South African stocks rose to cap the biggest monthly advance since last February as gold and consumer shares rallied.

“I’m positive about the outlook for the rest of the year, we’re going to do well,” Paul Theron, managing director of Vestact (Pty) Ltd., which oversees about 2.3 billion rand ($189 million) of assets, said by phone from Johannesburg on Friday. “The Fed and the banks don’t need to increase rates; earnings are going to be strong.”

After shunning gold for two years, investors are buying the metal as Europe and Asia fight stagnating economies with more stimulus, spurring the longest run of monthly gains since September 2012. A weaker U.S. expansion also improved chances the Federal Reserve would delay raising interest rates. In South Africa, slowing inflation is driving derivative traders to bet on rate cuts, compared with predictions at the beginning of the year for increases.

The FTSE/JSE Africa All Share Index climbed 0.6 percent to 51,266.81, a four-month high, by the close on Friday. That extended its increase this month to 3 percent. Harmony Gold Mining Co. is the best performer in January with a 58 percent increase, followed by Sibanye Gold Ltd., which jumped 36 percent, and AngloGold Ashanti Ltd., which added 35 percent.

Measures of financial, property and retail stocks all jumped to all-time highs in January. The FTSE/JSE Africa General Retailers Index rose 14 percent in the month, with the Foschini Group Ltd., a clothing retailer, advancing 26 percent and Lewis Group Ltd., which sells furniture and appliances, rallying 23 percent, both reaching records this week.

The 23-member FTSE/JSE SA Listed Property Index gained 7.4 percent this month and the FTSE/JSE Africa Banks Index grew 5.8 percent, led by a 13 percent increase in Capitec Bank Holdings Ltd., a provider of loans not backed by assets.

Well Positioned

“We’ve been well-positioned in technology, health care and consumer stocks for the last five years,” Theron said, highlighting companies including Discovery Holdings Ltd., a health-insurance administrator, Aspen Pharmacare Holdings Ltd., a drugmaker, and Mediclinic International Ltd., a private-hospital owner. “That’s where we really do think people need to be focused for the year ahead.”

Other stocks that may benefit from improved disposable income among middle-class South Africans include Naspers Ltd., Africa’s largest media company, MTN Group Ltd., the continent’s biggest mobile-phone operator and its smaller competitor, Vodacom Group Ltd., he said. Woolworths Holdings Ltd., a clothing and food retailer, Steinhoff International Holdings Ltd., a furniture maker and retailer, Bidvest Group Ltd., Tiger Brands Ltd. and Famous Brands Ltd., an owner of fast-food chains, were also among Theron’s top picks.

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