United Capital Research Investment Views for Next Week, 4th August to 8th August 2025

August 01, 2025/United Capital Report

Trade Tensions, Central Bank Signals Weigh on Global Markets

United States

• US equities rose early in the week after a US-EU trade deal lifted sentiment; Europe accepted a 15% tariff on most exports while easing levies on US goods. However, momentum faded midweek as focus turned to economic data and earnings; the S&P 500 snapped a 6-day winning streak. The Fed offered no clear guidance on a September rate cut, dampening policy support expectations.
• Similarly, a tech rally reversed after Trump demanded lower US drug prices; stocks fell again Friday ahead of the jobs report and new tariffs.

Europe

• European stocks opened weaker as enthusiasm over the US-EU deal waned; elevated tariffs continued to pressure corporate margins.
• Midweek was muted with mixed earnings; L’Oréal and Danone beat, while HSBC and Adidas missed targets. Also, Novo Nordisk plunged 23%, erasing $40bn in value and dragging healthcare stocks.
• Thus, sentiment deteriorated on Friday amid Trump’s pharmaceutical pricing campaign and fresh US tariffs; Stoxx 600 tracked its worst weekly loss since April.

Asia

• Asian equities posted their biggest weekly decline since April as tariff concerns, earnings volatility, and policy uncertainty weighed.
• Hence, early optimism from US-China and US-EU trade talks faded by midweek.
• Meanwhile, Tech earnings were mixed: Samsung and Tokyo Electron declined on earnings.
• Also, new US tariffs (between 15–25%) on Asian exports added to risk aversion.

Oil Markets

• Crude rose by 6.3% w/w to $69.26/bbl. on trade diplomacy.
• However, gains slowed on Thursday as new US tariffs spurred concerns ahead of Friday’s OPEC+ meeting, where output hikes are expected.

Next Week, key catalysts will be the US July jobs report, global inflation data, and policy follow-through from the Fed and OPEC+.

African Markets

Policy Rift in Pretoria: SARB’s Inflation Shift Sparks Treasury Pushback

• South African Reserve Bank (SARB) signaled a 3% inflation preference without Treasury approval, drawing criticism from Finance Minister Godongwana. Thus, markets rallied, but the move sparked political tensions.
• While no formal target change was made, it marks a de facto shift. Rate cuts now appear unlikely despite weak growth

Kenya Inflation Ticks Up, But Policy Easing Still in Play

• July inflation rose to 4.1% y/y on food price pressures, up from 3.8% y/y in June. Corn and vegetable shortages drove the increase, though inflation remains below the 5% midpoint.
• With inflation still contained, the central bank may maintain its dovish stance at the 12-Aug. meeting

Côte d’Ivoire Deepens Energy Ties with Eni Amid Output Expansion

• Côte d’Ivoire awarded Eni a new offshore block (CI-707) with a $20mn minimum investment. The move builds on the Baleine and Calao field successes. Consequently, output is set to rise to 150,000 bpd under Baleine’s third phase. Ivory Coast targets a five-fold oil output boost by 2035.

Domestic Economy

IMF Raises Nigeria’s Growth Forecast to 3.4%

• The International Monetary Fund (IMF) upgraded Nigeria’s 2025 GDP growth forecast to 3.4%, up from its April projection of 3.0%, citing stronger oil output and service-sector activity. This upward revision boosts confidence in Nigeria’s economic trajectory and bolsters investor sentiment.
• The forecast for 2026 was also raised to 3.2%, reflecting regional momentum in Sub-Saharan Africa.
• Continued reforms and better macro fundamentals are starting to pay off, encouraging foreign and local capital flows

Nigeria’s FX Revenue Falls by 73% in HY1 2025

• Revenue from exchange rate gains plunged by 73% to N589.45 billion in HY1 2025, down from N2.20 trillion a year earlier.
• The sharp decline reflects reduced arbitrage opportunities, aligned with a more stable naira and tighter FX benchmarks. It also signals a shift toward reliance on non-FX sources and underscores the need to diversify revenue streams.

Equity Market

• The NGX-ASI rose by 5.07% w/w, closing at 134,1263.05 points.
• MTNN (+20.00%), BUACEMEN(+7.16%) and BUAFOOD(+9.63%) led large-cap gains.
• Market capitalization increased to ₦89.37tn, supported by broad-based investor interest.
• The Nigerian equity appreciated by 37.25% YTD.

Money Market Review

• System liquidity improved, closing at a N1,606.8bn surplus (from N831.36bn surplus) due to Jan-2035 coupon inflows and bond settlement.
• Short-term rates were mixed, with OPR closing flat and OVN dropping minimally by 0.04% week on week to 26.50% and 26.88%, respectively.
• Strong demand at Bond auction (N300.68bn bids vs N80.00bn offer); marginal rates fell across both 2029 and 2032 tenors
• In the secondary NTB market, average yield climbed by 0.06% w/w to 17.76%, OMO yields rose slightly by 0.03% w/w to 24.72%
• This week, no major inflows are expected, but FAAC disbursements may keep liquidity buoyant.
• Rates may remain flat or inch lower, with bullish sentiment to continue as investors seek unmet auction allocations.