European markets ended mixed but generally firm last week, with the STOXX Europe 600 advancing by 0.29% for a fourth consecutive weekly gain, supported by optimism over US-China trade developments. Germany’s DAX (+1.79% w/w) and Italy’s FTSE MIB (+2.72% w/w) led gains, while France’s CAC 40 (-0.34% w/w) and the UK’s FTSE 100 (-0.48% w/w) lagged. The BOE cut its key rate by 25bps to 4.25%, but a split vote dampened expectations for aggressive easing this year. In the Nordics, Sweden’s Riksbank and Norway’s Norges Bank held rates steady but flagged a bias toward future cuts, citing increased downside risks amid global uncertainty. Central banks continue to tread carefully as inflation dynamics evolve.

Asian markets were mixed last week, with China in focus as trade negotiations intensified ahead of the key US-China meeting. The PBOC delivered fresh easing, cutting the 7-day repo rate by 10bps to 1.4% and lowering the reserve requirement ratio (RRR) by 50bps. Trade data surprised to the upside, with both exports and imports outperforming expectations, amid speculation that Chinese goods are being redirected to other global markets, potentially contributing to disinflationary pressures outside the US. In India, equities finished modestly lower despite positive trade headlines, including reports that India has offered to narrow the tariff gap with the US and expand preferential market access.

Oil markets were volatile last week, with ICE Brent initially sliding below $60.00/bbl. after OPEC+ confirmed a 411,000 bpd production increase for June, broadly in line with earlier press reports. The move pressured prices to retest early April lows as the market digested the prospect of higher supply. However, a steady rebound followed as several major US producers announced plans to curb capital expenditures, signaling a softer production outlook and helping to stabilize sentiment.

The spotlight this week falls squarely on the US-China meeting in Switzerland, where expectations for a breakthrough, and potentially a tariff rollback, have risen. A lack of tangible progress risks sparking downside volatility. Meanwhile, Treasury Secretary Bessent’s warning to Congress about the debt ceiling deadline adds another layer of political uncertainty into an already cautious market. On the data front, US April CPI on Tuesday will be critical as inflation expectations remain elevated, challenging the Fed’s wait-and-see stance. Earnings season continues, with consumer and tech bellwethers like Walmart, Cisco, and Alibaba in focus.

Macroeconomic Highlights
Nigeria’s private sector sustained its growth momentum into the second quarter of 2025, as strong customer demand underpinned another solid expansion in business activity, according to the latest Stanbic IBTC Bank Nigeria Purchasing Managers’ Index (PMI) report. The headline PMI figure stood at 54.2 in April, broadly in line with the 54.3 recorded in March, marking the fifth consecutive month that the index remained above the 50.0 no-change threshold.
 
President Bola Tinubu has formally ratified and adopted a road map for the Nigerian Electricity Supply Industry by approving the National Integrated Electricity Policy. The policy aims to unlock $122.20bn in investments to overhaul Nigeria’s power sector. At the Federal Executive Council meeting on Monday, Tinubu ratified the long-awaited National Integrated Electricity Policy—first submitted in December 2024—setting the stage for Nigeria to attract $122.20bn in investments.

The Central Bank of Nigeria spent N315.18bn on currency issue expenses in 2024, marking a sharp increase of 306% compared to N77.67bn recorded in 2023, the apex bank’s audited financial statement for the year has shown. Currency issue expenses cover the printing, processing, distribution, and disposal of banknotes. The latest figures reveal that the CBN’s cost of managing physical cash spiralled dramatically during the year under review, as Nigeria grappled with lingering cash shortages and disruptions in the money supply chain.

The Nigerian Senate has approved two out of four major tax reform bills proposed by President Bola Tinubu, marking a significant step toward modernizing Nigeria’s fiscal framework. However, the upper chamber rejected the proposed increase in Value-Added Tax (VAT) from 7.50% to 10.00%, opting to maintain the current rate while allowing VAT input claims on fixed assets, overhead costs, and administrative expenses. The bills passed include the Nigeria Revenue Service Establishment Bill, which repeals the Federal Inland Revenue Service, and the Joint Revenue Board Establishment Bill, aimed at harmonizing tax collection across the country. 

The Federal Executive Council, FEC, has approved the “Nigeria First” economic policy designed to prioritise locally manufactured goods and services across all government procurement processes. According to Mohammed Idris, Minister of Information and National Orientation. This policy ensures Nigeria comes first in all procurement processes. No foreign goods or devices already produced locally will be procured unless there is a clear and justified reason. At its core, the policy aims to foster a bold and confident business culture deeply rooted in Nigerian identity and production. This strategic initiative seeks to redefine government spending to invest in local industries and entrepreneurs, thereby strengthening the nation’s economic development and growth rates.

The IMF has confirmed that on 30-Apr-2025, Nigeria fully repaid the $3.40bn financial support it received under the Rapid Financing Instrument (RFI) to cushion the economic impacts of the COVID-19 pandemic. The Fund noted that despite the full settlement of the principal, Nigeria will continue to honour additional annual payments related to Special Drawing Rights (SDR) charges. 

This week, we expect the National Bureau of Statistics to release the CPI and Inflation Report for April 2025.

Domestic Equities: The Bulls Maintained Momentum…NGX-ASI Up by 2.54% w/w
Last week, the domestic equities market closed on a Positive note as the bulls dominated the market. Notably, share price appreciation in large cap stock MTNN (+11.73% w/w) pulled the main index higher. Also worthy of mention are buy interests in GTCO (+7.89% w/w), DANGCEM (+1.85% w/w), NESTLE (+10.00% w/w), TRANSCOH (+5.86% w/w) and SEPLAT (+2.32% w/w).  As a result, the benchmark NGX-ASI improved by 254bps to close at 108,733.40 points, bringing the YTD return to a steady 5.64% and strengthening market capitalization to N68.34tn. In terms of trading, market activity declined as the average value and volume of stocks traded fell by 18.30% and 3.81% to print at N15.40bn and 529.05mn units, respectively. Market breadth was positive with investors’ sentiments improving to 2.42x (previously, 1.41x), 68 stocks appreciated while 28 depreciated.

Meanwhile, on a sectorial level, performance was Bullish as all Five (5) sectors under our coverage closed in the green territory. The Consumer Goods sector (+5.41% w/w) led the gainers due to buy-interests in NESTLE (+10.00% w/w) and DANGSUGA (+14.00% w/w). Following was the Oil and Gas sector (+3.98% w/w) on the back of share price appreciation in SEPLAT (+2.32% w/w). The Banking sector (+3.09% w/w) followed on the back of gains in ETI (+10.38 w/w) and ZENITHBA (+2.95% w/w).  The Industrial Goods sector (+1.09% w/w) followed on account of share price appreciation in DANGCEM (+1.85% w/w) and BETAGLAS (+46.31% w/w). Lastly, the Insurance sector (+0.99%) followed owing to buy-interests in NEM (+4.90% w/w) and AIICO (+5.03% w/w).

On corporate actions, Bua Cement Plc has amended their FY-2024 Dividend declaration moving their closure of register from August 11^th – August 15^th, 2025, to July 4^th – July 8^th, 2025, and their Qualification date from 8^th August 2025 to 3^rd July 2025 and their payment date from 28^th August 2025 to 21^st July 2025.

Looking forward, the equities market might be mixed as investors await MPC’s decision on Monday and Tuesday next week. Similarly, the elevated interest rate environment would continue to dampen the equities market. Additionally, retail investors’ profit booking activity will result in selloffs and might impede the upward movement of stock prices. Conversely, opportunistic traders will continue to trade, taking advantage of every opportunity that emerges in the market. The continued release of Q1-2025 results will have investors cherry pick corporates with solid results, whilst those with weak performance might see selloffs. However, some investors might take position in stocks that are projected to rebound within the year.

Money Market: Stop Rates Stabilises at the PMA
Last week, the financial system opened with a surplus balance of N1.30tn. During the week, system liquidity reduced in the absence of any major inflow into the system. Although the Central Bank was active in the primary market, which further reduced the volume of liquidity, the financial system remained in a surplus region. That said, the financial system closed the week with a surplus balance of N684.79bn. Consequently, the average Open Repo Rate (OPR) and Overnight Rate (OVN) climbed by 2bps w/w and 15bps w/w from 26.50% and 26.87% to settle at 26.52% and 27.02%, respectively.

The CBN conducted an NT-bill auction with an offer size of N550.00bn across the 91-day, 182-day, and 364-day bills. At the auction, investors’ demand was strong, as total subscriptions printed at N1.09tn, indicating an oversubscription rate of 1.98x. The bids were majorly skewed towards the longer-tenured instrument, “364-day bill”, which received total bids of N956.88bn. Notably, the Apex Bank mildly oversold the auction, allotting a total of N598.33bn. That said, the stop rate on the 364-day bill climbed by 3bps from 19.60% to settle at 19.63%. Meanwhile, the stop rates on the 91-day and 182-day bills remained unchanged at 18.00% and 18.50%, respectively.

In the secondary NT-bills market, we observed bullish sentiments as investors look to fill their unmet bids from the Primary Market Auction (PMA). As a result, the average yield on NT bills declined by 19bps w/w to close at 20.88% (previously, 21.07%). Similarly, the average yield on OMO bills fell by 18bps w/w to settle at 26.82% (previously, 27.00%).

This week, we expect a total of N143.13bn from coupon payments to hit the financial system.  Adding this to existing liquidity of over N600bn+ will help to reflate the financial system. However, the CBN might conduct an OMO auction to mop up excess liquidity from the financial system. Thus, we anticipate that money market and FTD rates will remain at current levels, with the likelihood of inching modestly. In the secondary market, we expect the bullish sentiments to be sustained as investors look to fill their unmet bids from the primary market.

Bond Market: Bullish Sentiments Resume Among Investors
The secondary bond market was relatively bullish as investors were on the sidelines waiting for the outcome of the primary market auction. Thus, the average bond yield fell marginally by 4bps to settle at 19.00% (previously, 19.04%). Similarly, activities were mainly bullish in the corporate bonds market, as the average yield on corporate bonds decreased by 11bps to settle at 21.87% (previously, 21.98%).

In the Nigerian secondary Eurobonds, we observed bullish sentiments return to the market as investors cherry-picked instruments across the curve following the respite in the global market. Thus, the average yields in the market declined by 26bps w/w to settle at 10.37% (previously 10.63%).

Looking forward, we project that mixed sentiments will linger. However, we believe that the bearish undertone will continue as there is a chance that bond yields will likely remain around current levels for the rest of Q2-2025. Meanwhile, we expect bearish sentiments in the Nigerian Eurobonds market to continue on the back of global concerns and developments.

Currency Market: Naira Depreciated at the Official Market      
Last week, the Naira depreciated by 23bps w/w at the official market to close at N1,606.15/$, from its previous close of N1,602.18$. The Naira depreciated by 124bps at the parallel market to settle at N1,630.00/$ from its previous close of N1,610.00/$. Lastly, Nigeria’s external reserves rose by 43bps to settle at $38.096bn (previously, $37.934bn).

This week, we expect the Naira to hover at current levels if there are no substantial shocks.  We expect the CBN to continue to defend the Naira in the Foreign Exchange Market. Ultimately, CBN’s intervention would sustain the Naira at current levels with a possibility of marginal gains. However, we foresee that speculation, hoarding, insufficient supply of FX, high demand for FX, weak capital inflows, capital flight and low foreign investment, debt service pressure, weak FX earnings, corruption and negative real returns would continue to weaken the Naira in the FX market.