The country entered 2026 on a positive note, following a flurry of year-end transactions, including several of meaningful scale. This momentum turned uncertain in late February with the conflict in the Middle East, which triggered global market turmoil. Net oil importers like South Africa were particularly hard hit, given the country’s open economy and the rand’s role as a proxy for emerging markets.

The geopolitical backdrop remains central to economic growth and, by association, to the outlook for interest rates and the rand. Ongoing tension in the Middle East, coupled with the absence of a clear US exit strategy, continues to sustain volatility in both oil prices and the currency. These global political tensions are driving up costs across value chains – from agrifood to manufacturing, healthcare and technology – while exacerbating pressure on energy-intensive sectors like transportation, chemicals and metals.

Advisers in the industry note that the turbulence linked to the war in Iran, along with swings in valuations, has not deterred interest in corporate deal-making. What it has done, however, is delay the closing of transactions, as investors adopt a wait-and-see approach – though this may shift if the conflict persists.

A total of 82 deals were recorded in the first three months of the year – valued at R218,2bn – compared with 92 deals valued at R197,4bn in Q1 2025.

Private equity transactions were most prevalent in the unlisted sector, with the quarter recording 20 deals in total. Only two BEE deals were recorded, compared with nine announced over the same period last year. This could be attributed to the evolving legislative landscape around BEE, which is currently undergoing significant change, legal challenge and strategic review.

Once again, sector analysis for the period shows real estate transactions accounting for the majority share of reported activity, followed by deals in the technology and retail sectors. Companies in Europe were the partners of choice for cross-border activity by South African-domiciled, exchange-listed companies, with eight of the 18 deals recorded for the quarter involving European counterparties. These were primarily real estate transactions.

In behind-the-scenes corporate finance activity, companies continue to return value to shareholders through ongoing share repurchase programmes. An aggregate R60,47bn in shares was repurchased over the three-month period, representing 56% of the total value of activity for the period, driven by the usual suspects: Prosus, Naspers, AB InBev and BAT. Other notable transactions included Valterra Platinum and Gold Fields’ distributions of special dividends, with a combined value of R8,5bn.

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