Nigerian Capital Market Update
Global Markets (2/2)
Globally, IPOs and mergers and acquisitions fell in the first half; sales of green bonds outpaced those of fossil fuel bonds; and
mainland China reopens (2/2)
Decline in mergers and acquisitions deals in the H1' 2023
In H1 2023, there were over 27,000 deals worth over $1.2 billion, which is a decrease from
H1 2022, when there were over 29,000 deals worth over $1.9 billion.
Macroeconomic instability, erratic capital markets, sharply rising interest rates, and the
effects of inflation are all contributing factors to the decline in worldwide merger and
acquisition deals.
2
Value of M&A ($'billions)
1.2
1.9
0
H1 2023
H1 2022
Number of M & A
27,000
29,000
H1 2023
■H1 2022
Mainland China reopens
Toward the end of 2022, Mainland China lifted its COVID restrictions. The Chinese
economy is experiencing a solid recovery, as evidenced by the 4.5% increase in Q1
of this year and is expected to grow an average of 5.2% in 2023.
Decline in global inflation towards the end of first half of the year
Inflation in advanced economies has maintained its lower trend shows the benefits of
the central bank's monetary tightening policies.
The inflation rate in the US decreased to 3% in June from 4% in May 2023, getting
closer to the 2% goal range.
The Eurozone also saw a slowdown in inflation, which dropped to 5.50% in June from
6.1% in May 2023. The decline in prices in the energy, transportation, and food
industries can be linked to the cause of downward trend in inflation.
Silicon Valley Bank fails
In March of this year, the United States saw the second-largest bank failure since the
financial crisis of 2007-2008. After investing the majority of their deposits in long-term
assets paying close to zero interest rates, Silicon Valley Bank (SVB) experienced
liquidity problems.
Additionally, interest rates have recently increased significantly as a result of rising
inflation. As a result, bond prices fell, an SVB's loss position led to a rating
downgrade, and investors started to flee in large numbers.
Source: Global M&A Industry Trends: 2023 Mid-Year Update - PwC UK
The Nigerian Capital Market Update
PwC
August 2023
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