Profit taking dominated the Nigerian equities market this week as investors consolidated recent gains across select large cap tickers. Precisely, losses in FIRSTHOLDCO (-11.4%), BUACEMENT (-10.0%), ARADEL (-9.5%), MTNN (-5.5%), and WAPCO (-3.5%) dragged the All-Share Index lower by 2.8% w/w to 243,379.63 points.
June 5, 2026/Cordros Report
Global
According to the Bureau of Labor Statistics, total non-farm payroll employment in the US increased by 172,000 jobs in May, from the revised addition of 179,000 in April, and well above market expectations of an additional 85,000 jobs. Most notably, the job gains were largely driven by gains in leisure and hospitality (+70,000), which was above its 12-month average of +14,000 jobs. Additional job gains were also recorded in local government (+55,000) and healthcare (+35,000), buoyed by gains in ambulatory health care services. Similarly, employment in social assistance continued to trend upwards (+12,000), mostly driven by individual and family services. Also, jobs in mining, quarrying, and oil and gas extraction increased by 5,000. On the other hand, job losses were largely recorded in financial activities (-22,000), reflecting declines in insurance carriers and related activities, as well as commercial banking. Meanwhile, employment in transportation and warehousing, construction, wholesale trade, retail trade, information, and professional and business services was little changed from the previous month. Notably, the broad unemployment rate and labor force participation rate were unchanged at 4.3% and 61.8%, respectively. Looking ahead, we expect the US labor market to remain broadly resilient, supported by continued job gains, limited layoffs and improved corporate profitability, partly reflecting fiscal relief from tax and tariff refunds. However, hiring momentum is likely to soften, as firms remain cautious about expanding headcount amid tariff-related uncertainty and the fallout from the US-Iran conflict.
Headline inflation in the Euro Area edged up for the fourth consecutive month to its highest level since September 2023, reaching 3.2% y/y in May (vs April: +3.0% y/y), and in line with market expectations. This increase was primarily driven by higher services inflation and a sustained rise in energy prices, which more than offset the moderation in food inflation. More specifically, services inflation jumped to +3.5% y/y (April: +3.0% y/y), while energy inflation edged up to +10.9% y/y in May (April: +10.8% y/y), its highest reading since February 2023, fueled by supply constraints tied to the Middle East conflict. In contrast, food inflation eased to +2.0% y/y (April: +2.4% y/y), reflecting softer prices across processed foods, alcohol & tobacco (+1.1% y/y vs April: +1.6% y/y) and unprocessed foods (+4.2% y/y vs April: +4.6% y/y). Core inflation, which excludes volatile energy, food, alcohol, and tobacco, rose 30bps y/y to +2.5% y/y in May (April: +2.2% y/y), suggesting that price pressures are becoming more broad based, extending beyond energy. On a month-on-month basis, consumer price growth moderated sharply to +0.1% (vs April: +1.0%), reflecting slower energy price growth compared to the previous month. Looking ahead, inflationary risks remain skewed to the upside, reflecting Europe’s continued vulnerability – as a major net energy importer, to energy price shocks. Although oil prices have moderated recently, they remain elevated, sustaining high energy costs. This raises the risk of persistent price pressures via higher transportation, production and utility costs, as well as potential second order impact on wages and core inflation. Accordingly, we expect the ECB to raise its policy rate by 25bps at its June 11 meeting – anchoring inflation expectations and ensuring a gradual return of headline inflation to its 2.0% target.
Global Markets
Global equities delivered mixed performance this week, as the prolonged stalemate in US-Iran negotiations kept energy prices elevated, reinforcing concerns around global inflation and the trajectory of interest rates. Market participants also assessed a fresh batch of economic data, including Eurozone inflation data, mixed PMI readings across the US and China, and US jobs data. At the time of writing, major US indices were mixed, with the DJIA (+1.0%) and S&P 500 (+0.1%) on track to close the week higher, supported by a broadening market participation as investors rotated out of technology into financials and healthcare, while the NASDAQ (-0.5%) was set to close lower, weighed down by selloffs in semiconductor and AI-linked tickers after Broadcom’s underwhelming guidance reignited concerns around the sustainability of the AI trade. Meanwhile, European equities (STOXX Europe 600: -0.4%; FTSE 100: -0.7%) closed lower, as renewed uncertainty surrounding US-Iran negotiations and elevated energy prices weighed on sentiments. Investors also digested a higher-than-expected Eurozone core inflation data, which reinforced expectations of a 25bps rate hike by the European Central Bank at its meeting next week. In Asia, Japan’s Nikkei 225 (+1.1%) closed higher, as optimism surrounding AI-related opportunities outweighed concerns over the lack of progress in US–Iran peace negotiations. In contrast, Chinese equities (SSE: -1.0%) declined for a fourth consecutive week, pressured by weaker-than-expected manufacturing PMI data, renewed China-US trade tensions, and profit taking in heavyweight technology and semiconductor stocks. Elsewhere, the Emerging Market index (MSCI EM: +0.4%) advanced, supported by gains in Taiwan (+0.8%), while the Frontier Market index (MSCI FM: -0.7%) declined, reflecting losses in Iceland (-6.5%) and Morocco (-1.7%).
Domestic Economy
According to the National Bureau of Statistics (NBS), capital importation into Nigeria surged by 61.0% q/q to USD10.37 billion in Q1-26 (Q4-25: USD6.44 billion). The rise in capital inflows signals strengthening foreign investor confidence, supported by improving macroeconomic conditions, enhanced FX liquidity, and more attractive carry-trade opportunities. The breakdown shows an expansion in foreign portfolio investment (+79.8% q/q to USD9.86 billion), driven largely by a surge in bonds (+63.76% y/y) and money market (+110.9% y/y) instruments as foreign investors continued to take advantage of improved market conditions and attractive yields in the domestic financial markets, despite a 69.6% q/q decline in equities to USD131.81 million. Conversely, foreign direct investment declined by 62.3% q/q to USD135.08 million, while other investments fell by 37.6% q/q to USD374.48 million. We attribute the weakness in FDI to the still cautious stance of long-term investors, given lingering structural constraints, high operating costs, and the delayed transmission of recent reforms into real sector investment decisions. Meanwhile, the decline in other investments likely reflects lower loan inflows and reduced short-term financing compared with the previous quarter. On a year-on-year basis, capital importation rose by 83.8%. In the near term, we expect foreign portfolio inflows to remain the main driver of total capital inflows, supported by attractive naira yields, improved FX liquidity and strong policy confidence. However, elevated global uncertainty, particularly from Middle East tensions, could temper investor appetite and increase the risk of renewed portfolio outflows if global risk sentiment weakens. For FDI, sustained policy credibility, deeper FX liquidity and improvements in the broader business environment will be critical to attracting more durable long-term capital.
According to the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX), total transactions in the Nigerian equities market rose by 3.4% m/m to NGN1.80 trillion in April (March: NGN1.74 trillion). The performance was primarily driven by the higher participation from domestic investors (86.3% of gross transactions), which rose by 6.8% m/m to NGN1.56 trillion (March: NGN1.46 trillion), following increased transactions from retail investors (+26.3% m/m), while transactions from institutional investors (-4.7% m/m) moderated. Meanwhile, transactions from foreign investors declined by 14.2% m/m to NGN247.78 billion (March: NGN288.82 billion). However, the market recorded net outflows of NGN25.30 billion, a sharp reversal from the prior month’s net inflows of NGN96.02 billion. Looking ahead, domestic investors are expected to remain the primary drivers of market turnover, underpinned by the continued decline in fixed income yields, which should sustain the rotation into equities. Nonetheless, investor sentiment may likely be weighed by increasing inflation risks, which could prompt a more cautious monetary policy stance, limit the pace of decline in fixed income yields, and dampen risk appetite for equities.
Capital Markets
Equities
Profit taking dominated the Nigerian equities market this week as investors consolidated recent gains across select large cap tickers. Precisely, losses in FIRSTHOLDCO (-11.4%), BUACEMENT (-10.0%), ARADEL (-9.5%), MTNN (-5.5%), and WAPCO (-3.5%) dragged the All-Share Index lower by 2.8% w/w to 243,379.63 points. As a result, month-to-date and year-to-date returns settled at +0.5% and +56.4%, respectively. Market participation improved as trading volume and value increased by 71.7% w/w and 67.9% w/w, respectively. Sectoral performance was broadly negative, as the Oil & Gas (-5.2%), Industrial Goods (-4.4%), Banking (-3.4%), Insurance (-1.9%) and Consumer Goods (-0.7%) indices all closed lower.
Looking ahead, we expect market activity to remain cautious and largely range-bound in the near term, given the lack of a meaningful catalyst to spur buying interest.
Money Market and Fixed Income
Money Market
The OVN rate contracted by 9bps w/w to 22.1%, as robust SDF placements averaging NGN4.87 trillion (prev.: NGN4.49 trillion) underpinned system liquidity through much of the week. Late-week pressures emerged as NTB (NGN1.46 trillion) and OMO (NGN3.04 trillion) PMA outflows outpaced inflows from OMO maturities (NGN2.73 trillion). Nonetheless, liquidity closed marginally higher at an average net long position of NGN4.66 trillion, up from NGN4.61 trillion in the previous week.
In the absence of any mop up operations by the CBN, system liquidity is expected to remain strong, further bolstered by inflow of NGN2.09 trillion from OMO maturities.
Treasury Bills
The Treasury Bills secondary market traded on a bullish note with average yields declining by 7bps to 18.8%. Across segments, average yields in the NTB secondary market expanded by 3bps to 17.5%, driven by profit-taking activities as successful bidders at Wednesday’s auction sold down their holdings. Conversely, average yields in the OMO secondary market contracted by 13bps to settle at 20.9%, due to sustained interest from offshore investors. At Wednesday’s NTB primary market auction (PMA), the DMO offered NGN1.00 trillion across tenors, with total demand reaching NGN2.16 trillion, translating to a bid-to-offer ratio of 2.2x. The DMO ultimately allotted NGN1.46 trillion, implying a bid-to-cover ratio of 1.5x. Stop rates expanded by 10bps, 5bps and 20bps to settle at 16.05%, 16.19% and 16.35% for the 91-, 182- and 364-day tenors, respectively. Elsewhere, at Tuesday’s OMO PMA, the CBN offered NGN600.00 billion across tenors, with total demand reaching NGN3.3 trillion. The CBN ultimately allotted NGN3.04 trillion, with stop rates clearing at 21.54%, 21.40% and 20.02% for the 7-, 35- and 133-day tenors, respectively.
With system liquidity projected to remain strong in the coming week, we expect sustained downward pressure on yields in the Treasury bills secondary market, as investors’ demand for short term government securities remains firm.
Bonds
The FGN bond secondary market traded relatively flat albeit with a bearish undertone as the average yield expanded by 2bps to 16.3%. Across the benchmark curve, the average yield expanded at the short (+10bps) end, driven by selloffs of the MAR-2027 (+27bps) bond. The mid and long segments closed flat.
Over the medium term, yields are expected to moderate further, largely supported by the healthy liquidity profile. 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 gained 1.0% w/w to settle at NGN1,361.00/USD, supported by offshore supply from Tuesday’s OMO auction, which outweighed domestic demand. Meanwhile, gross external reserves increased by USD456.73 million to USD50.04 billion (04 June 2026), marking the fourth consecutive week of growth. In the forwards market, the naira rates appreciated across the 1-month (+0.8% to NGN1,385.94/USD), 3-month (+0.9% to NGN1,423.93/USD), 6-month (+1.0% to NGN1,477.71/USD) and 1-year (+1.2% to NGN1,585.65/USD) contracts.
We expect the naira to remain broadly stable in the near term, underpinned by resilient portfolio and remittance inflows, 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 contain excessive exchange rate volatility.
