South African banks like Absa and firms with a domestic focus are expected to attract interest next week in a market that is otherwise expected to trend sideways to lower, dealers said on Friday.
They added that volumes were likely to be light ahead of local inflation data due on Wednesday and Thursday and given thin summertime trading in the United States from where the Johannesburg market often takes its direction.
"I'm mostly bearish on the market," said Warren Hammond of Andisa Securities, adding that he expected the rand to continue to strengthen towards 6.30/dollar.
That would weigh on the overall market, which is dominated by export and dual-listed stocks who see the value of rand-reported earnings diminish when the local currency is strong.
That environment, however, increases appetite for stocks that have more of a domestic focus such as banks or industrial firms such as Bidvest and Barloworld.
Hammond said that Absa, which posted a jump in annual profits last month, was Andisa's pick of the banking stocks.
"Golds are also looking to be in value territory," he added.
The FTSE/JSE index of gold mining shares fell to its lowest level in 2-1/2 years on Tuesday as a stronger rand cancelled out the benefits of a rebound in the gold price.
But buyers have started to creep back into some of the world's biggest bullion producers, such as AngloGold, Gold Fields and Harmony Gold, as they spot value at the lows.
However, investors were expected to be hesitant given uncertainty about market-influencing factors like the global oil price. "Our market's not expensive," said Craig Pheiffer of Sasfin Frankel Pollak Securities. "The market looks like it wants to go better but will probably be cautious at the moment."
Pheiffer said investors were sniffing out stocks that offered higher dividend yields, as well as bank preference shares after a spate of such issues in the sector.
Standard Bank said earlier this week it planned to raise an additional 500 million rand ($76.76 million) by selling 5.0 million preference shares via a public offering.
The country's biggest banking group in terms of assets said last week it had raised 2.0 billion rand from a placement of preference shares to institutions.
On the economic front, investors would be eyeing inflation data expected to show that South Africa's main inflation rates accelerated in the year to May on technical factors, raising prospects for an October interest rate increase.
A Reuters poll of 17 economists published on Friday forecast the CPIX measure, watched by the Reserve Bank for monetary policy, will rise to 4.7 percent from 4.4 percent in April - but still within its three to six percent target band.