DealMakers - Q2 2024 (released August 2024)
Editor's Note
by Marylou Greig
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It’s easy to be despondent when looking at the historic M&A data in SA to ascertain a trend – its interpretation is not pretty. M&A activity has been on the decline since 2008, for a variety of reasons, most of which are of our own making. Initially triggered by the financial crisis, the further decline in investor confidence was driven by state capture and the revelations of the extent and reach of the malaise throughout the organs of government, the COVID pandemic, together with uncertainties created by the war in Ukraine, higher inflation and interest rates globally, a low domestic growth rate accompanied by a weakening exchange rate, ‘grey listing’, and foreign policy blunders, all of which have had investors running scared.
Marylou Greig
And while still with us are the problems of failing infrastructure, dysfunctional SOEs, looming water shedding and skills shortages, to name but a few, there are – for the first time in a while – reasons to take a positive view.
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South Africa has a government of national unity, inflation data shows the Reserve Bank’s strict interest rate policy is working, the domestic exchange rate has recently found support, and the private sector is willing to partner with government. These positives offer an opportunity to address the challenges that could alter SA’s economic and financial market trajectories. Although not reflected in the H1 M&A numbers captured for the period (page 6), the dealmaking pipelines are (according to industry advisers) healthy, also witnessed in the past few weeks by the increased number of deals announced by SA exchange-listed companies. The local equity market presents an opportunity for investors – supported by attractive valuations and reasonably priced – and the country’s diversified economy offers opportunities to invest in strong sectors able to withstand global economic storms. The trick will be for SA Inc to stay the course on this new path, take advantage of opportunities presented, and make the necessary changes to regulations that impede investment flows. If ever there was a right time, this is it.
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Once again, this August month, DealMakers held its Women in SA’s M&A and Financial Markets Industry platinum networking event in Johannesburg. The industry’s women made the most of the opportunity to network and engage the panel in discussion. The Women’s feature, released at the event and now in its fourth year of print, profiled over 120 women across the continent. New this year are the 18 video chats offering a different delivery platform. The journeys shared by these top minds in M&A are inspiring, and offer great advice to those seeking guidance on a career in this dynamic industry.