The domestic bourse closed the holiday-shortened week higher, as gains in AIRTELAFRI (+10.0%), NASCON (+4.8%), ARADEL (+5.3%) and NEM (+9.7%) drove the All-Share Index higher by 0.3% w/w to 250,385.47 points.
May 29, 2026/Cordros Report
Global
According to the Bureau of Economic Analysis (BEA), the US economy expanded by 1.6% q/q in Q1-26 (Q4-25: +0.5% q/q), a downward revision to the preliminary estimates of +2.0% q/q. The outturn primarily reflects improvements in business investments and government spending, which more than offset the moderation in consumer spending. More specifically, private investment rose by 7.0% q/q (Q4-25: +2.3% q/q), supported by stronger fixed investment (+6.4% q/q vs Q4-25: +1.4% q/q) and non-residential investment (+10.1% q/q vs Q4-25: +2.4% q/q), largely reflecting increased business spending on AI-related infrastructure, data centres, equipment, and software. However, residential investment contracted more sharply (-6.2% q/q vs Q4-25: -1.7% q/q), underscoring persistent weakness in the housing market. Likewise, government spending grew by 4.4% q/q, reversing the sharp contraction in Q4-25 (-5.6% q/q) due to higher allocations across both defence and non-defence categories at the federal level (+9.5% q/q vs Q4-25: -16.6% q/q). At the state level, government spending growth remained unchanged from the previous quarter (+1.5% q/q). On the other hand, growth in household consumption was at a slower pace (+1.4% vs Q4-25: +1.9% q/q), reflecting the moderation in services (+1.8% q/q vs Q4-25: +2.7% q/q) that more than offset the marginal expansion in goods consumption (+0.4% q/q vs Q4-25: +0.3% q/q). On a year-on-year basis, real GDP expanded by 2.7% in Q1-26, up from +2.0% y/y in Q4-25. Looking ahead, US GDP growth is expected to remain modest in the near term, with risks tilted to the downside as spillovers from the Middle East conflict weigh on economic momentum. Renewed inflationary pressures, particularly in food and energy prices, are expected to keep household spending subdued. Nonetheless, continued investment in artificial intelligence-related infrastructure and technology should provide some support to growth, helping to partly offset weaker consumer demand and tighter financial conditions.
According to the United States Department of Labor, initial jobless claims rose by 5,000 to 215,000 for the week ended May 23, above market expectations of 211,000. Despite the week-on-week increase, claims remain close to historical lows, suggesting companies have not resorted to broad-based layoffs. On a non-seasonally adjusted basis, the largest increases were recorded in Kansas (+1,261), Missouri (+1,130), and Illinois (+1,117), while the largest declines were seen in Texas (-1,407), Pennsylvania (-777), and Florida (-419). Meanwhile, the 4-week moving average, which excludes the effects of single-week fluctuations, rose by 6,250 to 209,000. Looking ahead, labour market conditions are expected to remain firm, supported by resilient labour demand and companies’ tendency to maintain a no-fire-no-hire stance. However, downside risks persist. Prolonged Middle East tensions and the associated increase in oil prices have raised operating costs and weakened business confidence, contributing to more cautious hiring decisions. This suggests that while broad-based layoffs may remain limited in the near term, slower hiring could gradually cool labour market conditions.
Global Markets
Global equities traded higher this week as improving prospects for a de-escalation in Middle East tensions lifted risk appetite. During the week, reports emerged that the US and Iran were moving closer to an agreement that could reopen the Strait of Hormuz, driving oil prices lower and easing concerns around energy-driven inflation and further monetary tightening. At the time of writing, major US indices (DJIA: +0.2%; S&P 500: +1.2%; NASDAQ: +2.2%) were on track to close the week higher, after US officials signalled progress toward a deal between Washington and Tehran to reopen the Strait of Hormuz and restore global oil flows. Sentiment was further supported by sustained momentum in technology-linked names, following DELL’s better-than-expected Q1 earnings release. Meanwhile, the European market was mixed, as the STOXX Europe 600 (+0.2%) advanced, supported by a degree of stabilisation in global markets, while the FTSE 100 (-0.3%) declined, weighed down by losses in banks, healthcare and utility stocks. In Asia, Japan’s Nikkei 225 (+4.7%) closed higher, driven by renewed optimism around artificial intelligence infrastructure investment and better-than-expected retail sales and industrial production data. Conversely, Chinese equities (SSE: -1.1%) declined, pressured by renewed China-EU trade tensions, and profit-taking in technology and semiconductor names. Elsewhere, the Emerging and Frontier Market (MSCI EM: +2.5%; MSCI FM: +0.9%) indices advanced, reflecting gains in India (+0.5%) and Morocco (+2.8%), respectively.
Domestic Economy
According to the Nigerian Bureau of Statistics (NBS), Nigeria’s economy grew by 3.89% y/y in Q1-26 (Q4-25: +4.07% y/y), maintaining its growth momentum. At the sectoral level, oil sector growth eased to 2.57% y/y (Q4-25: +6.79% y/y), primarily due to lower crude oil production in the quarter. Specifically, crude oil output averaged 1.55 mb/d (Q1-25: 1.62 mb/d), representing a 4.3% y/y decline. We attribute the decline in crude output partly to the planned turnaround maintenance at the Bonga terminal, which remained offline for over a month, as well as lingering operational disruptions. At the same time, the non-oil sector maintained its resilience, growing by 3.94% y/y (Q4-25: +3.99% y/y) driven by the expansion in the services sector (+4.31% y/y vs Q4-25: +4.15% y/y), even as the industrial (+3.50% y/y vs Q4-25: +3.88% y/y) and agriculture (+3.15% y/y vs Q4-25: +4.00% y/y) sectors slowed. Nigeria’s economy is projected to sustain an upward growth path over the short- to medium-term. Specifically, production volumes are expected to recover as assets return from scheduled maintenance and ramp towards fuller capacity, while operators execute catch-up strategies to recoup prior losses; accordingly, we forecast output at 1.70 mb/d in 2026E (2025FY: 1.64 mb/d). At the same time, we expect the non-oil sector’s growth to strengthen from the previous quarter (+4.25% y/y vs Q1-26: 3.94% y/y), supported by a stable naira and continued expansion in the digital economy. On balance, real GDP growth is anticipated to settle at 4.20% y/y in Q2-26, with full-year 2026 growth at 4.23% y/y (2025FY: +3.90% y/y).
According to data from the Central Bank of Nigeria (CBN), Credit to the Private Sector (CPS) increased by 3.2% y/y to NGN80.59 trillion in April (April 2025: NGN78.07 trillion). We believe the improvement reflects the impact of CBN’s gradual monetary policy easing. At the same time, credit to the government rose sharply by 65.4% y/y to NGN39.60 trillion (April 2025: NGN23.93 trillion), indicating increased government borrowing from domestic banks to finance the deficit. Money in circulation increased by 12.6% y/y to NGN5.65 trillion, mirroring rising transactional demand driven by higher consumer spending, particularly as cash remains the dominant medium of exchange in the informal sector. Overall, broad money supply (M3) rose by 4.8% y/y to NGN124.99 trillion, reflecting increases in both narrow money (+6.8% y/y) and quasi-money (+3.8% y/y). In the near term, growth in credit to the private sector is expected to remain constrained given the Monetary Policy Committee’s (MPC) cautious stance. The MPC’s decision to keep interest rates at current levels at its May meeting is likely to sustain tight financing conditions, limiting access to credit for businesses and weighing on private sector investment.
Capital Markets
Equities
The domestic bourse closed the holiday-shortened week higher, as gains in AIRTELAFRI (+10.0%), NASCON (+4.8%), ARADEL (+5.3%) and NEM (+9.7%) drove the All-Share Index higher by 0.3% w/w to 250,385.47 points. Consequently, the month-to-date and year-to-date returns settled higher at +3.4% and +60.9%, respectively. On market activity, trading volume and value declined by 41.6% w/w and 36.5% w/w, respectively. Meanwhile, sectoral performance was mixed, as the Oil & Gas (+1.4%), and Insurance (+1.4%) indices recorded gains, while the Banking (-2.4%) and Consumer Goods (-1.5) indices closed lower. The Industrial Goods Index closed flat.
Looking ahead, we expect market sentiment to remain broadly cautious in the near term, in the absence of a clear catalyst to drive momentum.
Money Market and Fixed Income
Money Market
The OVN rate contracted by 5bps w/w to 22.2%, supported by inflows from OMO maturities (NGN1.97 trillion). Consequently, system liquidity strengthened to an average net long position of NGN5.26 trillion, up from NGN4.11 trillion in the previous week.
In the absence of any mop-up operations by the CBN, system liquidity is expected to remain strong, buoyed by NGN416.00 billion in OMO maturities inflows.
Treasury Bills
The Treasury Bills secondary market traded on a bullish note with average yields declining by 5bps to 18.8%. Across segments, the average yield in the NTB secondary market contracted by 1bp to 17.5%. Similarly, average yields in the OMO secondary market contracted by 9bps to settle at 21.0%, underpinned by stronger offshore demand following the liquidity boost from OMO maturity inflows.
Next week, with system liquidity expected to remain strong, we expect yields in the Treasury bills secondary market to decline as investor demand stays firm. Additionally, the DMO is scheduled to conduct an NTB PMA next Wednesday (June 3), with NGN700 billion in bills expected to be offered.
Bonds
The FGN bond secondary market traded on a bearish note as the average yield expanded by 8bps to 16.3%. Across the benchmark curve, the average yield expanded at the short (+22bps), mid (+5bps) and long (+5bps) segments, driven by selloffs of the MAR-2027 (+121bps), AUG-2030 (+57bps) and JUN-2038 (+38bps) bonds respectively.
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 closed flat w/w to settle at NGN1,375.00/USD, as local demand matched available supply. Meanwhile, gross external reserves increased by USD359.80 million to USD49.34 billion (26 May 2026), marking the third consecutive week of growth. In the forwards market, the naira rates closed flat across the 1-month (NGN1,397.05/USD), 3-month (NGN1,436.05/USD), 6-month (NGN1,491.92/USD) and 1-year (NGN1,604.66/USD) contracts.
We expect the naira to remain broadly stable in the near term, underpinned by resilient domestic and foreign inflows amid still-strong market confidence, Nigeria’s favourable external position, and sustained carry trade appeal. However, if the US-Iran conflict escalates further and triggers portfolio outflows, we expect the CBN to deploy measured FX interventions to limit excessive volatility.
