Profit-taking activities dominated the local bourse this week as investors consolidated recent gains across select large-cap names. Specifically, sell pressures on BUACEMENT (-3.5%), GTCO (-1.2%), DANGSUGAR (-4.4%), NASCON(-5.4%), and UACN(-5.0%) dragged the All Share Index lower by 0.3% w/w to 249,540.75 points
May 22, 2026/Cordros Report
Global
According to the latest data from S&P Global, the US composite PMI came in at 51.70 points in May, unchanged from April (51.70 points), reflecting a still resilient private sector. The steady print was driven by stronger momentum in the manufacturing sector, which was fully offset by a sluggish performance in the services sector. Specifically, activity in the manufacturing sector improved to its highest level in over 4 years at 55.30 points (April: 54.50 points), reflecting precautionary stock building amid domestically driven order book growth, while exports continued to decelerate. On the other hand, the services sector remained subdued due to weak demand and lower exports amid rising prices and overall economic uncertainty linked to the Middle East war. Elsewhere, the labour market weakened further in May, recording its second contraction in the last three months, with the pace of job shedding at its sharpest since August 2024, reflecting mounting pressure on businesses from elevated costs and softening demand. At the same time, inflationary pressures remained firm, driven by higher input and output prices, with input prices jumping to their highest level since late 2022. Looking ahead, we expect the US private sector to remain largely resilient and in expansionary territory, driven by strong manufacturing sector activity. However, the spillover effect from Middle East tensions is becoming increasingly evident, as rising input costs are beginning to weigh on demand. Firms will attempt to pass through higher prices to consumers, raising the risk that the composite PMI will drift toward the 50-point threshold in subsequent months should tensions persist.
According to the Office for National Statistics (ONS), UK headline inflation moderated to 2.8% y/y in April from 3.3% y/y in March, marking its lowest level since March 2025 and undershooting market expectations of 3.0% y/y. The moderation was largely driven by softer food price pressures and lower electricity and gas costs, supported by the government’s energy bill support package. These disinflationary effects more than offset the increase in fuel prices linked to the ongoing Middle East tensions. Breaking it down, the food index cooled to 3.0% y/y (March: +3.7% y/y), reflecting lower prices for chocolate and meat products. Similarly, services inflation moderated to +3.2% y/y (March: +4.5% y/y) due to slower increases in the prices of transport, and housing & household services. Elsewhere, core inflation, which excludes volatile food and energy components, softened to +2.5% y/y (March: +3.1% y/y), suggesting underlying price pressures remain broadly contained. On a month-on-month basis, consumer prices remained unchanged at +0.7% m/m in April (March: +0.7% m/m). Looking ahead, we expect UK inflation to rebound in the coming months as the disinflation seen in April gives way to renewed energy-driven price pressures, fuelled by the ongoing US-Iran conflict. Against this backdrop, we expect the MPC to hold rates at its June 18 meeting, maintaining a cautious and data-dependent stance as it continues to assess recent price developments and the second-round effects of higher energy costs on broader inflation.
Global Markets
Bullish sentiment returned to global equity markets this week as investors reacted positively to fresh developments surrounding a potential US-Iran peace agreement. Market sentiment improved midweek after President Trump stated that a deal with Iran could be reached soon, easing concerns around energy inflation as oil prices traded lower over the week. Market participants also digested key macroeconomic releases across major economies, including inflation data from Japan and the UK, Japan’s Q1 GDP print, the PBOC’s interest rate decision, and corporate earnings releases from NVIDIA Corporation and Walmart Inc. At the time of writing, major US indices (DJIA: +1.5%; S&P 500: +0.5%; NASDAQ 100: +0.3%) were on track to close the week higher, supported by optimism around a potential longer-term ceasefire agreement between the U.S. and Iran. Sentiment was further supported by renewed momentum across AI-related names following better-than-expected Q1 results from NVIDIA Corporation. Similarly, European equities (STOXX Europe 600: +2.8%; FTSE 100: +2.8%) were set to close higher for the first time in four weeks, amid improving optimism around a possible agreement to end the conflict involving Iran. Investor sentiment was further supported by lower oil prices and softer-than-expected UK inflation data, which reduced expectations of a Bank of England interest rate hike. In Asia, Japan’s Nikkei 225 (+3.1%) advanced, supported by renewed optimism around AI-related demand and a better-than-expected Q1-26 GDP print. In contrast, Chinese equities (SSE: -0.5%) closed lower, weighed down by weaker-than-expected macroeconomic data and profit taking across technology names. Elsewhere, Emerging Markets (MSCI EM: +0.4%) advanced, primarily supported by gains in India (+0.7%), while Frontier Markets (MSCI FM: -0.9%) edged lower following losses in Vietnam (-2.5%).
Domestic Economy
At the May meeting, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) retained the Monetary Policy Rate (MPR) at 26.50%, signaling a pause in the easing cycle amid renewed inflationary risks. The Committee’s decision was primarily informed by the spillover effects of the Middle East crisis, particularly the upward pressure on global energy prices and the associated risks to domestic inflation. However, the Committee noted that the naira appreciation and an improved external position have partially mitigated the impact of these external shocks on overall economic activity. The Committee also maintained all other parameters, including the asymmetric corridor around the MPR at +50bps/-450bps, and the Cash Reserve Requirement (CRR) for Deposit Money Banks (DMBs), Merchant Banks, and non-Treasury Single Account (TSA) public sector deposits at 45.0%, 16.0%, and 75.0%, respectively. The liquidity ratio was also held at 30.0%. Looking ahead, while the Committee has characterised the recent inflation spike as transitory and expects the disinflationary trend to resume, we believe price pressures will remain elevated in the near term. This reflects the continued pass-through of higher energy costs to broader prices, as well as tight supplies of farm produce amid persistent insecurity and elevated input costs. Relative naira stability is unlikely to fully offset these pressures. These conditions are likely to limit the scope for policy easing, particularly as higher inflation narrows the positive real policy rate. Accordingly, barring any material shocks, we expect the Committee to retain the MPR at 26.50% at its July meeting.
According to the Central Bank of Nigeria’s Household Expectations Survey, consumer sentiment weakened further in April, with the Overall Consumer Sentiments Index declining to -15.1 points from -10.3 points in March, indicating deeper pessimism among households. The deterioration was broad-based, with negative readings across economic conditions (-22.4 points vs. March: -14.8 points), family financial situation (-17.8 points. vs March: -14.7 points) and family income sentiment (-5.1 points vs. March: -1.3 points), suggesting that households remain concerned about the economy, income prospects and their financial position. However, forward-looking sentiment improved, with expectations rising to 3.3 points for the next three months and 10.7 points for the next six months, pointing to cautious optimism over the medium term. On prices, households perceived a moderation in average price increases, as the price perception index declined to 36.1 points from 44.2 points in March, with further moderation expected over the next three to six months. Despite this, spending intentions remained concentrated on essentials, particularly food, while households remained reluctant to make big-ticket purchases such as houses, vehicles, and consumer durables. Looking ahead, we expect household sentiment to remain fragile in the near term, reflecting still-elevated living costs, weak purchasing power and tight financial conditions. However, the improvement in three-month and six-month expectations suggests that sentiment could recover gradually if price pressures moderate further and household income conditions improve.
Capital Markets
Equities
Profit-taking activities dominated the local bourse this week as investors consolidated recent gains across select large-cap names. Specifically, sell pressures on BUACEMENT (-3.5%), GTCO (-1.2%), DANGSUGAR (-4.4%), NASCON(-5.4%), and UACN(-5.0%) dragged the All Share Index lower by 0.3% w/w to 249,540.75 points. Consequently, the month-to-date and year-to-date returns moderated to +3.0% and +60.4%, respectively. On trading activity, total volume and value traded declined by 50.2% w/w and 56.6% w/w, respectively. Across sectors, the Insurance (-1.8%), Industrial Goods (-1.2%) and Consumer Goods (-0.8%) indices closed lower, while the Banking (+1.1%) and Oil & Gas ( +0.1%) indices closed higher.
Looking ahead, we expect market activity to remain relatively subdued in the near term in the absence of a major positive catalyst to drive sentiment. Nonetheless, we do not rule out selective bargain hunting across fundamentally sound names following the recent moderation in prices.
Money Market and Fixed Income
Money Market
The OVN rate stayed unchanged at 22.2%, supported by inflows from OMO maturities (NGN2.25 trillion). However, towards the end of the week, the CBN conducted an OMO auction, mopping up NGN3.69 trillion from the system. Consequently, system liquidity moderated to an average net long position of NGN4.11 trillion, down from NGN5.62 trillion in the prior week.
In the absence of any mop-up operations by the CBN, system liquidity is expected to remain strong, buoyed by inflows from OMO maturities (NGN626.35 billion) and FGN Bond coupon payments (NGN5.63 billion).
Treasury Bills
The Treasury Bills secondary market traded on a bullish note as the average yield declined by 7bps to 18.9%. Across segments, the average yield in the NTB secondary market expanded by 1bp to 17.5%. Meanwhile, the average yield in the OMO secondary market contracted by 1bp to 21.1%. Elsewhere, at Wednesday’s NTB PMA, the DMO offered NGN650.00 billion across tenors, with total demand reaching NGN1.99 trillion, translating to a bid-to-offer ratio of 3.1x. The DMO ultimately allotted NGN829.33 billion, implying a bid-to-cover ratio of 2.4x. Stop rates remained unchanged at 15.95%, 16.14% and 16.15% for the 91-, 182- and 364-day tenors, respectively. At Thursday’s OMO auction, the CBN offered NGN600.00 billion across the 33- and 138-day tenors, attracting strong demand with total subscriptions of NGN3.69 trillion. The CBN subsequently allotted NGN3.69 trillion across the tenors at stop rates of 21.57% and 19.97%, respectively.
Next week, with system liquidity expected to remain strong, we expect yields in the Treasury bills secondary market to decline as investor appetite remains resilient.
Bonds
The FGN bond secondary market traded on a bearish note as offshore investors sold off longer dated bonds. Consequently, the average yield expanded by 12bps to 16.2%. Across the benchmark curve, the average yield contracted at the short (-8bps) end, driven by the demand for the MAR-2027 (-109bps) bond. Conversely, the average yield expanded at the mid (+5bps) and long (+33bps) segments, due to sell pressures on the FEB-2031 (+52bps) and APR-2037 (+173bps) bonds, respectively. At Monday’s FGN Bond auction, the DMO reopened the JAN-2035 and APR-2037 bonds, offering a total of NGN600.00 billion. Total demand settled at NGN516.15 billion (bid-to-offer: 0.9x), with the DMO eventually allotting NGN334.53 billion (bid-to-cover: 1.5x). The stop rate on the JAN-2035, which was on-the-run last month, expanded by 41bps to 17.00%, while the stop rate on the APR-2037 settled at 17.04%.
Over the medium term, yields are expected to moderate further, largely supported by strong domestic liquidity. However, the pace of decline will be constrained by the government’s elevated borrowing programme and continued risk-off sentiment, especially from offshore investors.
Foreign Exchange
The naira depreciated by 0.8% w/w to NGN1,366.82/USD, as local demand offset offshore supply from Thursday’s OMO auction. Meanwhile, gross external reserves rose by USD315.90 million to USD48.89 billion (21 May 2026), marking the second consecutive week of growth. In the forwards market, the naira rates depreciated across the 1-month (-0.2% to NGN1,397.27/USD), 3-month (-0.2% to NGN1,436.18/USD), 6-month (-0.2% to NGN1,492.56/USD) and 1-year (-0.2% to NGN1,605.18/USD) contracts.
We expect the naira to remain broadly stable in the near term, underpinned by resilient local and foreign inflows amid still-strong market confidence, Nigeria’s favourable external position, and sustained carry trade appeal. However, in the event of a re-escalation of the US-Iran conflict that triggers portfolio outflows, we expect the CBN to deploy measured FX interventions to limit excessive volatility.
