The Nigerian domestic market closed the week lower, as investors digested a mixed batch of H1-26 earnings releases on the NGX. Precisely, losses in ACCESSCORP (-9.9%), MTNN (-1.5%), BUACEMENT (-2.5%) and ZENITHBANK (-2.3%) dragged the All-Share Index down by 0.8% w/w to 245,283.68 points.
July 31, 2026/Cordros Report
Global
At its fifth meeting of the year and second under Fed Chair Kevin Warsh, the FOMC voted to maintain the federal funds target range at 3.50% – 3.75%, in line with market expectations. Most notably, three members of FOMC dissented, preferring to raise the policy rate by 25bps. Once again, the Committee pared back its policy statement and stripped out much of its forward looking guidance, a style that is becoming a hallmark of the Warsh-led Fed. The central bank noted that economic activity is expanding at a solid pace despite elevated uncertainty stemming in part from the conflict in the Middle East. At the same time, the Fed observed that job gains have kept pace with the workforce, and the unemployment rate has changed little, at 4.2% in June from 4.3% in May. Headline inflation slowed to 3.5% y/y in June (May: 4.2% y/y), reflecting the brief US–Iran ceasefire that pulled oil prices lower. However, the ceasefire has proven fragile, and rising oil prices leave inflation risks skewed to the upside. Against this backdrop, the Fed emphasised that inflation remains the key concern, reflecting supply shocks that have driven price increases in certain sectors, including energy. Nonetheless, the Fed reiterated its commitment to delivering price stability. In our view, the Fed is likely to adopt a hawkish policy stance, unless labour maket conditions significantly worsen or inflationary pressures begin to moderate towards the 2.0% target level. Against this backdrop, we expect the Fed to raise its policy rate by 25bps at its next meeting. This view aligns with market pricing, and the CME’s FedWatch indicates a 63.0% probability of a “HIKE” decision at the 16 September meeting.
According to the Bureau of Economic Analysis (BEA), the US economy expanded 1.5% q/q in Q2-26 (Q1-26: +2.1% q/q), undershooting the advance estimate of +2.1% q/q and marking a slower pace of growth. The outturn was primarily driven by weaker business investment and government spending, which more than offset higher consumer spending. More specifically, government spending contracted by 0.8% q/q (Q1-26: +4.4% q/q) reflecting subdued spending at both the federal (-4.1% q/q vs Q1-26: +9.4% q/q) and state & local (+1.1% q/q vs Q1-26: +1.6% q/q) levels. At the same time, growth in private investments eased to 3.0% q/q (Q1-26: +7.9% q/q) primarily due to lower non-residential investment (+8.4% vs Q1-26: +10.6% q/q) despite higher fixed investments (+7.0% q/q vs Q1-26: +6.5% q/q). On the other hand, consumer spending rebounded to 3.2% q/q (Q1-26: +0.5% q/q), reflecting higher goods (+5.2% q/q vs Q1-26: +0.5% q/q) and services (+2.2% q/q vs Q1-26: +0.5% q/q) activity. We attribute the increase to improved spending on AI infrastructure and tax refunds from the One Big Beautiful Bill, which fueled consumer spending. On a year-on-year basis, real GDP expanded by 2.1% in Q2-26, down from +2.7% y/y in Q1-26. Looking ahead, economic growth is expected to remain resilient but skewed to the downside, as consumer spending may begin to weaken due to the fading effects of the temporary income boost. At the same time, renewed tensions in the Middle East are pushing energy prices higher and putting pressure on spending elsewhere. That said, we expect sustained spending on AI-related infrastructure and technology to provide a near term anchor.
Global Markets
Global equity markets traded mixed this week but were on track to post a positive weekly performance, as early week sell pressure eased amid softer oil prices and resilient corporate earnings. Market sentiment was shaped by geopolitical developments, a busy corporate earnings calendar and monetary policy decisions from the US Federal Reserve (Fed), the Bank of England (BoE) and the Bank of Japan (BoJ). At the time of writing, major US indices (DJIA: +0.5%; S&P 500: +0.3%; NASDAQ: +0.6%) were on track to close the week higher, supported by a rebound in semiconductor stocks following the early-week sell-off, as investors bought the dip on expectations that the AI-driven rally still has further room to run. Market sentiment also benefited from strong earnings releases by major hyperscalers, particularly Microsoft, after reporting a 43.0% y/y growth in cloud revenue. Similarly, European equities traded higher (STOXX Europe 600: +1.7%; FTSE 100: +2.0%), supported by lower oil prices, which eased inflation concerns, alongside a broadly resilient corporate earnings backdrop. In Asia, markets were mixed, as Chinese equities (SSE: +0.5%) advanced on a rebound in domestic semiconductor stocks, while Japan’s Nikkei 225 (-0.4%) declined on investors’ concerns over the sustainability of elevated AI-related capital expenditure. Finally, the Emerging Market (MSCI EM: -4.0%) index declined, dragged by losses in South Korea (-1.4%) and Taiwan (-1.2%), while the Frontier Market (MSCI FM: +1.9%) index advanced, supported by gains in Vietnam (+3.0%) and Kuwait (+1.6%).
Domestic Economy
According to the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX), total transactions in the Nigerian equities market declined by 11.8% m/m to NGN1.71 trillion in June (May: NGN1.94 trillion). The outturn reflects lower participation from domestic investors (89.1% of gross transactions). Specifically, transactions from domestic investors dipped by 13.2% m/m to NGN1.53 trillion (May: NGN1.76 trillion), following declines in transactions from both retail (-26.7% m/m) and institutional (-3.8% m/m) investors. At the same time, transactions from foreign investors increased slightly by 1.7% m/m to NGN186.79 billion (May: NGN183.61 billion). Overall, net outflows declined by 19.7% m/m to NGN48.99 billion (May: NGN61.01 billion), comprising net foreign outflows (NGN43.37 billion) alongside net domestic outflows (NGN5.62 billion). Looking ahead, we expect domestic investors to remain the primary drivers of market turnover. Nevertheless, elevated fixed income yields are likely to moderate the pace of portfolio reallocation into equities, as attractive yields continue to compete for domestic capital. Moreover, persistent inflationary pressures and a cautious monetary policy stance are expected to keep interest rates elevated, limiting investors risk appetite and tempering near-term inflows into the equity market.
Preliminary data from FMDQ shows that total inflows into the Nigerian Foreign Exchange Market (NFEM) increased to its highest level in five months, rising by 31.9% m/m to USD4.36 billion in July (June: USD3.31 billion). The outturn was driven by the increases in inflows from local (66.7% of total inflows) sources. Specifically, inflows from local sources rose by 79.8% m/m to USD2.91 billion (June: USD1.62 billion), reflecting increased market intervention from the CBN (+11.8x m/m) and higher inflows from non-bank corporates (+31.9% m/m) which offset the decline from the individual (-54.0% m/m) and Exporter (-12.9% m/m) segments. Meanwhile, inflows from foreign sources declined by 13.9% m/m to USD1.45 billion (June: USD1.69 billion), as the decreases from the FPIs (-18.5% m/m) and other corporates (-48.4% m/m) segments was enough to offset the increase in the FDIs (+388.3% m/m) segment. Specifically, declines in the equity investment (-53.2% m/m) and Fixed income (-16.1% m/m) sub-segments drove the dip in FPI inflows. In the near term, we expect foreign exchange inflows from both local and foreign sources to remain resilient, supported by sustained market confidence and still attractive carry trade opportunities. That said, lingering global uncertainties, particularly geopolitical tensions, may keep foreign investors cautious and constrain the pace of growth in FX liquidity.
Capital Markets
Equities
The Nigerian domestic market closed the week lower, as investors digested a mixed batch of H1-26 earnings releases on the NGX. Investor reaction remained largely stock specific, with earnings outcomes and dividend declarations driving divergent price performances across the market. Precisely, losses in ACCESSCORP (-9.9%), MTNN (-1.5%), BUACEMENT (-2.5%) and ZENITHBANK (-2.3%) dragged the All-Share Index down by 0.8% w/w to 245,283.68 points. As a result, the month-to-date and year-to-date returns moderated to +7.0% and +57.7%, respectively. On market activity, trading volume and value increased by 14.9% w/w and 32.9% w/w, respectively. Sectoral performance largely reflected the broader market direction as the Banking (-0.7%), Consumer Goods (-2.3%), Industrial Goods (-0.2%), and Oil & Gas (-0.2%) indices closed lower, while the Insurance (+1.7%) index was the sole gainer for the week.
We expect trading to remain choppy next week as investors continue to navigate sector- and company-specific catalysts, ongoing corporate actions, interim dividend declarations, and evolving fixed income yield dynamics, all of which should shape portfolio allocation decisions.
Money Market and Fixed Income
Money Market
The OVN rate expanded by 2bps w/w to 22.1% as OMO (NGN3.48 trillion) and net NTB PMA (NGN1.25 trillion) debits offset inflows from OMO maturities (NGN2.19 trillion). Consequently, average system liquidity moderated to a net long position of NGN3.42 trillion, down from NGN3.51 trillion in the previous week.
In the absence of any liquidity management measures by the CBN, we expect system liquidity to remain strong, supported by inflows from OMO maturities (NGN2.45 trillion).
Treasury Bills
The Treasury bills secondary market traded on a bullish note as the average yield across all instruments contracted by 14bps to 19.2%. This came as unmet NTB PMA bids filtered into the secondary market. By segment, average yield in the NTB and OMO secondary markets contracted by 4bps and 7bps to 18.2% and 21.3%, respectively. At Wednesday’s NTB auction, the DMO offered NGN700.00 billion across tenors, with total demand reaching NGN3.62 trillion, with the DMO ultimately allotting NGN1.25 trillion. Stop rates contracted by 31bps to 17.35% for the 364-day tenor, while the 91-day and 182-day tenors remained unchanged at 16.30% and 16.50%, respectively. Meanwhile, at Tuesday’s OMO auction, the CBN offered NGN600.00 billion across tenors, with total demand reaching NGN3.48 trillion, with the CBN allotting NGN3.48 trillion. Stop rates settled at 20.60%, 20.29% and 20.15% for the 91-, 119- and 133-day tenors, respectively.
Next week, we expect the Treasury bills secondary market to trade on a bullish note, buoyed by resilient local demand amid the robust system liquidity.
Bonds
The FGN Bond secondary market traded on a bullish note, contracting 29bps to 17.1% due to robust local institutional demand. Across the benchmark curve, the average yield contracted at the short (-34bps), mid (-33bps) and long (-17bps) segments due to demand for the MAR-2027 (-72bps), APR-2032 (-55bps) and APR-2037 (-47bps) bonds, respectively.
Over the medium term, we expect yields to remain relatively elevated, underpinned by the government’s sizeable borrowing requirements. However, the gradually improving offshore and local demand could provide some near term support.
Foreign Exchange
The naira depreciated by 0.5% w/w to NGN1,369.09/USD as existing supply was offset by local demand pressure. Meanwhile, gross external reserves decreased by USD107.73 million to USD51.92 billion (30 July 2026), marking the first weekly decline in 3 months. In the forwards market, the naira rates depreciated across the 1-month (-0.2% to NGN1,392.17/USD), 3-month (-0.5% to NGN1,430.46/USD), 6-month (-0.1% to NGN1,484.50/USD) contracts, but stayed flat on the 1-year (NGN1,592.05/USD) contract.
We expect the naira to remain broadly stable in the near term, underpinned by resilient portfolio inflows, strong investor confidence, and widening current account surplus.