August 22, 2025/United Capital Report

Global Markets:

United States

• In the week ended Thursday, 21 August 2025, US equity market declined. Rising bond yields and caution ahead of the Jackson Hole meeting (an annual gathering of central bankers) weighed on sentiment.
• S&P 500, DJIA, and NASDAQ all closed in the red, with technology stocks leading the losses.

Europe

• European stocks hovered near record highs as investors continue to adjust trading positions in favour of positive economic data.
• The STOXX 600 stayed near record levels. France’s CAC 40 closed higher. The FTSE 100 briefly hit record high before retreating but ended the week higher. However, Germany’s DAX closed lower.
• Sector performance was mixed, with autos and chemicals gaining ground, while energy and some industrial names lagged.

Asia

• Asian stocks ended the week mixed as early optimism over US rate cuts faded later in the week.
• China’s markets gained, with mainland benchmarks hitting decade high.
• India’s rally paused as key sectors faltered. Japan’s Nikkei eased slightly after midweek peak.
• Semiconductor stocks in Taiwan and South Korea were volatile amid a tech-led sell-off, while Hong Kong stocks slipped slightly even as mainland markets rallied.

Oil Markets:

• Brent crude oil rose by 1.24% week-on-week to settle at $67.67 per barrel, supported by a larger-than-expected US inventory draw.

Outlook:

Global markets would be influenced by the Powell’s Jackson Hole speech for policy signals and NVIDIA’s earnings for clues on tech momentum. July retail sales report will be a key gauge of US consumer resilience, with a soft figure potentially reinforcing September cut bets. In Europe, focus will remain on geopolitical developments following the Trump–Putin summit. 

African Markets:

Egypt

• Egypt’s grain buyer secured at least 200,000 tons of French wheat in private deals to reinforce food reserves and mitigate inflationary risks.
• The agreement builds on earlier imports from Ukraine and Romania, underscoring government’s drive to diversify its supply sources.
• The increase in import volumes reflects mounting subsidy costs and growing pressure on fiscal sustainability.

Ghana

• Ghana’s Cedi weakened due to strong corporate demand for Dollar and limited supply.
• In contrast, other African currencies including Kenya’s Shilling and Uganda’s Shilling held broadly steady amid balanced FX flows and central bank interventions.

Kenya

• Kenya’s economy is expected to grow 5.6% in 2025 up from 4.7% in 2024, demonstrating resilience amid global trade and tariff headwinds.
• At the same time, the government has secured around $169 million in Samurai bond financing from Japan. This is to boost local vehicle assembly and reduce electricity transmission losses, which currently stand at about 23% of output.

Outlook:

African markets will be shaped by a mix of local and global drivers. In Nigeria, we have positive expectations that Banking sector earnings may be impressive. In Kenya, subdued foreign interest and central bank signals will guide sentiment. South African equity may trade sideways, with investors tracking China’s July activity data for cues on commodity demand.

Domestic Economy:

Federal Government (FG) Expects 5% GDP Growth Rate:

• FG now expects Gross Domestic Product (GDP) growth rate of 5% in 2025.
• Central Bank of Nigeria (CBN) earlier expected a GDP growth of 4.17%
• The growing confidence in the Nigerian economy is propelling the GDP growth expectation.
• Meanwhile, the International Monetary Fund (IMF) projects 3.4% growth for Nigeria in 2025.
• United Capital Research projects 4.1% growth rate for 2025.

Nigeria’s Foreign Reserves Surged to $41 Billion:

• Nigeria’s foreign reserves rose to $41.08bn as of 21 August from $39.54bn on 01 August 2025.
• This is the highest in 44 months and the strongest position since 06 December 2021.

Equity Market:

• The NGX-ASI fell by 3.46% week-on-week, closing at 140,332.40 points.
• DANGCEM (-9.88%), BUACEMEN (-9.96%) and STANBIC                    (-14.94%) led large-cap losses.
• Market capitalisation dropped to ₦88.78tn due to profit taking activities.
• The Nigerian equity year-to-date return stood at 36.34%.

Money Market:

• System liquidity climbed from deficit balance of ₦0.95tn to ₦3.9tn surplus
• Short-term rates fell, with Open Repo Rate (OPR) and Overnight Rate (OVR) declining by 5.80% and 5.60% w/w to 26.50% and 27.00%, respectively.
• Open Market Operations (OMO) yields fell by 0.11% week-on-week to close at 24.52% for the 320-day paper.

Outlook:

Equity Market: In Nigeria, we have positive expectations that financial services sector (banking, insurance and other non-banking) may remain the toast of investors.  Expectations of strong earnings from manufacturing sector may continue to drive positive sentiment in the broader market.

Fixed Income Market: Fixed Term Deposit (FTD) rates and OVR might hover around current. The DMO (Debt Management Office) will conduct a bond auction, with an offer size from N180.00bn to N240.00bn.