Nigerian Equities traded with bearish sentiments, as profit-taking in BUAFOODS (-3.6%), BUACEMENT (-3.8%), TRANSCORP (-7.2%), FIRSTHOLDCO (-5.8%), and WAPCO (-3.6%) caused the All-Share Index to decline by 0.4% w/w to 165,512.18 points.
January 23, 2026/Cordros Report
Global
According to the Office for National Statistics (ONS), headline inflation in the UK edged higher to 3.4% y/y in December, up from November’s eight-month low of 3.2% y/y – and slightly above market expectations (+3.3% y/y). The uptick was driven by higher food prices and a renewed increase in services inflation. Specifically, food inflation rose to 4.5% y/y (November: 4.2% y/y), reflecting higher prices across categories such as bread, cereals, and vegetables. Similarly, services inflation increased to 4.5% y/y (November: 4.4% y/y), underpinned by higher costs for gas, electricity, housing, and utilities. Elsewhere, core inflation, which excludes food and energy, was unchanged at 3.2% y/y, remaining at its lowest level since December 2024. On a month-on-month basis, consumer prices rose by 0.4% m/m in December, reversing the 0.2% m/m decline recorded in November. The recent uptick in inflation appears largely driven by temporary seasonal factors, while underlying price pressures remain stable. As these seasonal effects unwind, headline inflation is expected to ease in the coming months, provided there are no major shocks, reinforcing the view that inflation pressures are moderating rather than re-accelerating. While the timing of the Bank of England’s next rate cut remains uncertain, moderating wage growth should reduce inflation risks and increase the likelihood of monetary easing later in the year. Accordingly, we anticipate that the Bank of England (BoE) will hold its Bank Rate at its February 5 meeting.
According to the National Bureau of Statistics (NBS) of China, the second-largest economy grew at its slowest pace in three years at 4.5% y/y in Q4-25 (Q3-25: +4.8% y/y | Q4-24: +5.4% y/y), driven primarily by sluggish domestic demand. However, the data still marks a strong close to China’s 14th Five-Year Plan while providing a solid starting point for the 15th Plan period, reinforcing confidence in China’s economic resilience amid an increasingly complex global and trade environment. On a full-year basis, the economy expanded by 5.0% y/y (2024: +5.0% y/y), and in line with its growth target despite geopolitical headwinds. More precisely, the impacts of tariff pressures were partly offset by resilient non-US export demand, which helped the economy reach the 140-trillion-yuan mark in 2025. On a quarter-on-quarter basis, the economy grew to a three-month high of +1.2% (Q3-25: +1.1% q/q). Looking ahead, China’s growth should remain supported by targeted stimulus programs and softer trade-related tension under lower effective US tariff rates. However, weak domestic demand, prolonged property sector slumps, and persistent deflation continue to highlight structural headwinds. Accordingly, the IMF revised China’s growth outlook upwards by 30bps to +4.5% y/y (previous: +4.2% y/y) in 2026E.
Global Market
Global equity markets traded mixed over the week, as investors navigated heightened geopolitical uncertainty alongside a mixed batch of macroeconomic data and corporate earnings from major economies, including the US, UK, China, and Japan. Accordingly, US equities (DJIA: +0.1%; S&P 500: -0.4%) were mixed as escalating trade risks prompted a rotation away from high-beta exposures, weighing on large-cap technology stocks. However, risk sentiment improved toward the end of the week as concerns eased following President Trump’s decision to step back from new tariff threats and his dismissal of the use of military force to acquire Greenland. Investors also assessed a mixed set of economic indicators, including US GDP data, alongside earnings releases from major corporations such as NFLX, JNJ, P&G, GE, and INTC. Meanwhile, European equities (STOXX 600: -0.9%; FTSE 100: -0.8%) declined, reflecting renewed trade uncertainty between the US and Europe. Market participants also digested UK macro data, including unemployment and inflation prints. Elsewhere, Asian markets closed mixed, as Chinese equities (SSE: +1.0%) outperformed, driven by favourable reactions to macroeconomic data, including 2025FY GDP, stronger-than-expected industrial output, and the PBoC’s policy rate decision, alongside renewed commitments by authorities to step up policy support. In contrast, Japanese equities (Nikkei 225: -0.2%) closed lower amid heightened bond market volatility, which weighed on banking stocks. Emerging and Frontier markets (MSCI EM: +0.7%; MSCI FM: +0.2%) advanced, driven by gains in China (+1.0%) and Iceland (+0.9%), respectively.
Domestic Economy
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production (including condensates) declined by 3.4% m/m to 1.54mb/d in December (November: 1.60mb/d), marking its lowest level since November 2024. We attribute the decline primarily to a sharper 24.9% m/m drop in condensate production to 0.12 mb/d (November: 0.16 mb/d), which accounted for the bulk of the overall decline, alongside a more modest 1.0% m/m fall in crude oil output to 1.42 mb/d (November: 1.44 mb/d). Notably, the increases witnessed across the Qua Iboe (+27.0% m/m), Odudu (+4.3% m/m), Forcados (+1.8% m/m), Bonny (+1.5% m/m), Escravos (+1.2% m/m) and Bonga (+0.7% m/m) terminals were not enough to offset the declines in the Egha (-79.1% m/m), Agbami (-75.4% m/m), Brass (-2.3% m/m), and Tulja-okwuibome (-1.9% m/m), production terminals. The average crude oil production (including condensates) for 2025FY stood at 1.64mb/d (2024 average: 1.55mb/d), falling short (-0.1mb/d) of Cordros’ estimate of 1.65mb/d and FGN target of 2.06mb/d (-0.42mb/d). Looking ahead, crude oil production is expected to increase in the near term, underpinned by higher investment, the integration of new oil fields and evacuation routes, and improved security conditions. However, intermittent terminal shutdowns, partly reflecting persistent infrastructure constraints, remain a key downside risk. Overall, we project average oil production of 1.80mb/d in 2026E.
In the January edition of its World Economic Outlook (WEO), the IMF expects Nigeria to grow by 4.4% y/y in 2026E (2025FY: +4.2% y/y) – 20bps higher than the October forecast (+4.2% y/y). The revised growth forecast primarily reflects stronger macroeconomic stabilization and reforms yielding results. Accordingly, the IMF now expects sub-Saharan Africa to grow by 4.6% y/y in 2026E (October estimate: 4.4% y/y; 2025FY: +4.4% y/y), reflecting their growth expectations for Nigeria and South Africa (2026E: +1.4% y/y vs 2025FY: +1.3% y/y). Further out, the IMF forecasts global growth to remain steady at 3.3% y/y in 2026E (October estimate: 3.1% y/y; 2025FY: +3.3% y/y), with continued momentum in high-tech sectors expected to partially offset the drag from policy uncertainty and elevated tariffs. While we broadly align with the IMF on Nigeria’s growth outlook, our 2026E projection (+4.20% y/y) is slightly more conservative. We expect stronger economic activity to be supported by sustained policy reforms, improving oil production, relative currency stability, continued disinflation, and gradually easing financial conditions. However, security challenges, a slow recovery in consumer demand, and still elevated borrowing costs continue to limit growth towards its potential.
Capital Markets
Nigerian Equities traded with bearish sentiments, as profit-taking in BUAFOODS (-3.6%), BUACEMENT (-3.8%), TRANSCORP (-7.2%), FIRSTHOLDCO (-5.8%), and WAPCO (-3.6%) caused the All-Share Index to decline by 0.4% w/w to 165,512.18 points, with the year-to-date returns moderating to +6.4%. On market activity, trading volume increased by 8.1% w/w, while trading value declined by 10.6% w/w. Sector performance reflected the broader market sentiment, as the Consumer Goods (-2.0%), Banking (-1.3%), Industrial Goods (-0.1%) and Insurance (-0.1%) indices declined, while the Oil & Gas (+1.4%) index advanced.
In the coming week, trading is expected to remain choppy as market participants assess a wave of 2025FY earnings releases, driving heightened stock-specific volatility and selective repositioning.
Money Market and Fixed Income
The OVN rate expanded by 10bps to 22.8%, as OMO PMA debits (NGN2.64 trillion) outweighed liquidity inflows from OMO (NGN1.31 trillion) and FGN bond (NGN1.20 trillion) maturities. Nonetheless, average system liquidity remained strong, closing at a net long position of NGN4.16 trillion (prior week: NGN2.00 trillion).
In the absence of CBN liquidity management measures, inflows from OMO maturities (NGN1.87 trillion) are expected to bolster system liquidity, potentially exerting downward pressure on the OVN rate.
Treasury Bills
As expected, the Treasury Bills secondary market remained bearish, as participants unwound positions amid expectations of higher stop rates at the NTB PMA. Consequently, the average yield across all instruments increased by 8bps to 20.4%. Across segments, average NTB yields increased by 37bps to 18.5%, while average OMO yields declined by 6bps to 22.4%. At Wednesday’s NTB PMA, the DMO offered NGN1.15 trillion in bills, with total subscriptions reaching NGN3.44 trillion (bid-to-offer: 3.0x). Ultimately, the DMO allotted NGN1.06 trillion (bid to cover: 3.2x). Stop rates increased on the 91 Day bill (+4bps to 15.84%) and 182 Day bill (+15bps to 16.65%), while the 364 Day bill saw a decline in its stop rate (-11bps to 18.36%). In addition, the CBN conducted an OMO PMA, offering N600.00 billion across the 203-D and 245-D maturities. Ultimately, a total of NGN2.64 trillion was allotted at respective stop rates of 19.38% and 19.39%.
Looking ahead, we do not rule out continued sell-offs in the Treasury bills secondary market, which could see yields edge marginally higher in the coming week.
Bonds
The FGN bond secondary market traded mixed, with the average yield rising marginally by 1bp to 16.9%. Across the curve, the average yield decreased at the short (-11bps) and long (-1bp) ends, driven by demand for the AUG-2030 (-71bps) and JUN-2053 (-1bp) bonds, respectively, while it expanded at the mid (+2bps) segment following sell pressures in the JUN-2033 (+12bps) bond. Notably, the DMO released the Jan-2026 FGN bond offer circular, offering NGN900.00 billion across the FEB-2031, FEB-2034, and JAN-2035 maturities. The 95.7% increase in the offer size (previous offer: NGN460.00 billion) underscores the government’s strategy of front-loading domestic borrowing to finance the fiscal deficit for 2026.
We expect bearish sentiment to persist, as market participants position ahead of the auction scheduled for Monday, January 26, with the auction outcome likely to dictate the near-term direction of yields in the FGN bond secondary market.
Foreign Exchange
The naira depreciated this week by 0.3% w/w to NGN1,423.14/USD as demand pressures outweighed supply. Also, the gross FX reserves increased this week by USD111.17 million w/w to USD46.01 billion (January 22). Similarly In the forwards market, the naira rates depreciated across the 1-month (-0.2% to NGN1,447.13/USD), 2-month (-0.2% to NGN1,468.81/USD), 6-month (-0.3% to NGN1,550.42/USD) and 1-year (-0.4% to NGN1,668.08/USD) contracts.
We expect the naira to remain broadly stable in the near term, supported by a favourable external position characterised by a sustained current account surplus and strong foreign exchange reserves. We expect continued investor confidence, alongside elevated naira yields, to underpin steady capital inflows, further anchoring exchange rate stability.
