The domestic bourse market closed the week on a negative note, as losses in BUAFOODS (-10.0%), MTNN (-4.7%), FIRSTHOLDCO (-3.7%) and UNILEVER (-18.9%) dragged the All-Share Index lower by 1.2% w/w to 242,619.20 points.
August 14, 2026/Cordros Report
Global
According to the Bureau of Labor Statistics (BLS), US headline inflation moderated for the second consecutive month to +3.4% y/y in July (June: +3.5% y/y), in line with market expectations. The slowdown was primarily driven by lower energy prices, following the absence of a renewed shock in oil prices. Specifically, the energy index eased to +14.7% y/y (June: +15.7% y/y), reflecting slower growth in gasoline (+24.6% y/y vs June: +26.7% y/y) and fuel oil (+39.1% y/y vs June: +42.9% y/y) prices. However, food inflation was unchanged at +3.0% y/y, the same level as June 2026, due to the prices for food at home (+2.7% y/y) and food away at home (+3.4% y/y) remaining unchanged in both months. Elsewhere, core inflation (excluding food and energy) slowed by 10bps to 2.5% y/y (June: +2.6% y/y), driven by softer price increases across the shelter and medical care services components. On a month-on-month basis, consumer prices rose by 0.1% in July, reversing the 0.4% m/m decline recorded in June, as higher food and apparel prices offset lower hotel and motel room prices. Although inflation has eased from its April peak, we believe the absence of a lasting ceasefire between Iran and the US will continue to keep energy prices elevated, and could potentially exert upward pressure on US inflation in the near term. Against that backdrop, the Fed is likely to hold rates steady at the 3.50%-3.75% range at its September 16 meeting, as it continues to assess incoming data. Our assessment is in line with the CME FedWatch Tool, which currently assigns a 65.2% probability of a HOLD decision. However, sticky inflation and persistent upside risks are likely to keep the policy tone hawkish, reducing the scope for near-term policy easing if price pressures intensify.
According to the Office for National Statistics (ONS), the United Kingdom’s real GDP expanded by +0.4% q/q in Q2-26, moderating from +0.6% q/q growth recorded in Q1-26. The slowdown reflected weaker growth across the services and construction sectors, while the production sector showed no growth. More specifically, the services sector grew by 0.5% q/q (Q1-26: +0.6% q/q), led by gains in information and communication sector which offset declines in administrative and support service activities. Similarly, the construction sector (+0.3% q/q vs Q1-26: +1.5% q/q) also recorded growth but at a slower pace, reflecting gains in new work, as well as repair and maintenance. Meanwhile, growth in the production sector (+0.0% q/q vs Q1-26: +0.2% q/q) was flat as gains in mining and quarrying were fully offset by declines in electricity and air conditioning supply. On a year-on-year basis, the economy expanded by 1.2% y/y in Q2-26 (Q1-26: +0.9% y/y). Looking ahead, we expect growth to remain resilient, although risks are tilted to the downside as cost pressures linked to the re-escalation of the Middle East war begin to mount for households and businesses. At the same time, uncertainty over the government’s policy direction ahead of the Autumn Budget could prompt businesses to delay investment and hiring decisions, pending clarity on the tax framework.
Global Market
Global equities traded on a broadly positive note this week, supported by gains across technology-heavy US and Asian markets. In the US, the week saw the release of the July inflation print which was in line with expectations and eased concerns over a near-term Federal Reserve rate hike. The benign inflation print reignited a rally in technology and AI-linked names, even as renewed Middle East tensions sustained elevated oil prices. At the time of writing, major US indices (DJIA: -0.1%; S&P 500: +1.2%; NASDAQ: +1.7%) were mixed, as the S&P 500 and NASDAQ advanced on stronger-than-expected earnings from AI-linked names including CRWV and SMCI, while the DJIA edged lower, weighed down by losses in HON and GOOGL. Meanwhile, European equities were mixed, as the STOXX Europe 600 (+0.2%) advanced on the technology rebound, while the FTSE 100 (-0.9%) declined, weighed down by a selloff in mining names and slowing UK second-quarter growth. Elsewhere, Asian markets (SSE: +0.7%; Nikkei 225: +4.0%) advanced, as Japanese equities surged to record highs on a rally in chip and AI-related names, while Chinese equities gained modestly on Technology strength. Finally, the Emerging Market (MSCI EM: +2.2%) index advanced on gains in South Korea (+10.2%) and Taiwan (+2.6%), while the Frontier Market (MSCI FM: +0.7%) index advanced on gains in Kazakhstan (+2.6%) and Romania (+1.6%).
Domestic Economy
According to the Debt Management Office (DMO), Nigeria’s public debt increased by 0.1% q/q to NGN159.35 trillion in Q1-26 (Q4-25: NGN159.28 trillion). We attribute the increase to additional borrowings to finance rising government expenditures amid the continued revenue shortfall. Notably, the total domestic debt stock (54.8% of total public debt) increased by 3.0% q/q to NGN87.40 trillion (Q4-25: NGN84.85 trillion), reflecting increases in both States (+3.7% q/q) and Federal government (+3.0% q/q) debt stocks. At the same time, total external debt stock (45.2% of total public debt) declined by 3.3% q/q to NGN71.95 trillion (Q4-25: NGN74.43 trillion) due to the 3.5% q/q appreciation of the naira (Q1-26: NGN1,386.22/USD vs Q4-25: NGN1,435.26/USD). In US dollar terms, total external debt increased moderately by 0.1% q/q to USD51.90 billion (Q4-25: USD51.86 billion), reflecting additional disbursements from multilateral lenders (+3bps q/q), including the African Development Bank Group (USD74.82 million), alongside higher syndicated loans (+4.7% q/q) primarily tied to capital projects. On a year-on-year basis, total debt grew by 6.7%. Looking ahead, total debt is expected to increase further, primarily due to elevated government borrowings to fund the 2026 budget deficit (Cordros estimate: NGN26.88 trillion vs 2026 Budget: NGN31.46 trillion). We project total public debt to settle at NGN183.58 trillion (or 36.2% of GDP) in 2026E.
Based on the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production (including condensates) declined by 3.7% m/m to 1.67 mb/d in July (June: 1.74 mb/d) after four months of increases. The performance was primarily driven by operational challenges at the Erha and Akpo terminals, which led to output declines of 49.9% m/m and 29.9% m/m, respectively. In addition, declines across the Escravos (-1.6% m/m), Bonny (-1.4% m/m) and Bonga (-0.1% m/m), alongside declines at Erha and Akpo, outweighed gains across the Tulja – Okwuibome (+13.6% m/m), Forcados (+8.7% m/m), Brass (+6.3% m/m), Odudu (+6.1% m/m) and Agbami (+3.1% m/m) terminals. In the near term, crude oil production is expected to increase, supported by higher investment, improved security conditions, and the integration of new oil fields and evacuation routes. However, intermittent terminal shutdowns, driven in part by persistent infrastructure constraints, remain key downside risks. Overall, we retain our average crude oil production estimate of 1.70 mb/d in 2026E.
Capital Markets
Equities
The domestic bourse market closed the week on a negative note, as losses in BUAFOODS (-10.0%), MTNN (-4.7%), FIRSTHOLDCO (-3.7%) and UNILEVER (-18.9%) dragged the All-Share Index lower by 1.2% w/w to 242,619.20 points, bringing the month-to-date and year-to-date returns to -1.1% and +55.9%. In terms of market activity, trading volume and value advanced by 125.2% w/w and 18.2% w/w, respectively. Meanwhile, sectoral performance was negative, as the Consumer Goods (-6.7%), Insurance (-2.1%), Banking (-1.6%), Industrial Goods (-1.2%) and Oil & Gas (-0.1%) indices all recorded declines.
Looking ahead, we expect market activity to be shaped by the remaining H1-26 earnings releases, particularly across the banking sector, where prospective dividend declarations could drive stock-specific positioning. Beyond earnings, investor sentiment could also be influenced by developments surrounding FTSE Russell’s final decision on Nigeria’s potential reclassification to Frontier Market status, following the earlier suspension due to the market moving to a shorter settlement cycle. We note ongoing between stakeholders which included an announcement during the week that foreign investors would not be required to pre-fund for trades, addressing the key concern around accessibility. Meanwhile, the revised NGX pricing methodology, which takes effect on 17 August, could introduce some near-term volatility to market activities. Overall, we expect the market to trade cautiously as investors weigh near-term headwinds and tailwinds.
Money Market and Fixed Income
Money Market
The OVN rate increased by 15bps w/w to 22.3% as OMO (NGN2.60 trillion) and NTB (NGN1.46 trillion) PMA debits offset inflows from OMO maturities (NGN2.48 trillion). Nevertheless, average system liquidity remained strong, settling at a net long position of NGN4.64 trillion, up from NGN3.53 trillion in the previous week.
Barring significant liquidity mop-up activities by the CBN, we expect system liquidity to remain robust in the coming week, supported primarily by OMO maturities (NGN2.22 trillion). Given the incoming liquidity and the potential for a significant surplus, the CBN may intensify liquidity management operations through additional OMO issuances. Overall, we expect money market rates to remain around current levels, however, the magnitude and timing of any sterilization exercise could drive a deviation.
Treasury Bills
The Treasury bills secondary market traded on a bearish note as the average yield across all instruments expanded by 16bps to 19.3%. By segment, average yield in the NTB secondary market expanded by 42bps to 18.5% as investors unwound positions to participate in the week’s OMO auction. In contrast, the average yield in the OMO secondary market contracted by 16bps to 21.2% as sizeable unmet OMO bids filtered into the secondary market. At Wednesday’s NTB auction, the DMO offered NGN700.00 billion across tenors, with total demand reaching NGN4.41 trillion, ultimately allotting NGN1.46 trillion. Stop rates expanded by 24bps to 17.59% for the 364-day tenor, while the 91-day and 182-day tenors remained unchanged at 16.30% and 16.50%, respectively. On Wednesday, the CBN released a circular allowing domestic investors, via Deposit Money Banks (DMBs), to participate in OMO Primary Market Auctions (PMA). Consequently, at Thursday’s OMO auction, the CBN offered NGN600.00 billion across tenors, with total demand reaching NGN4.93 trillion. Accordingly, the CBN allotted NGN2.60 trillion with stop rates settling at 20.39% and 20.01% for the 103- and 138-day tenors, respectively.
Next week, we expect the Treasury bills secondary market to trade largely bullish, supported by resilient local demand and robust system liquidity. However, NTB yields may remain choppy, with a bearish tilt as investors reposition ahead of anticipated OMO auctions, with liquidity expected to rotate towards the OMO secondary market. This shift should support lower OMO yields and drive further convergence between OMO and NTB secondary-market rates.
Bonds
The FGN Bond secondary market traded on a bearish note, as the average yield across instruments expanded by 12bps to 17.0% following sell offs as investors unwound positions at the mid segment of the curve to participate in the week’s OMO auction. Across the benchmark curve, the average yield expanded at the short (+42bps), mid (+5bps) and long (+7bps) segments due to selloffs of the MAR-2027 (+206bps), JAN-2035 (+21bps) and JUN-2038 (+38bps) bonds, respectively.
Over the medium term, we expect yields to remain elevated, reflecting the government’s sizeable borrowing requirements, although improving offshore and local demand should provide some support. In the near term, however, yields could remain volatile as investors reposition ahead of the DMO’s August 17 Bond PMA, where NGN1.10 trillion is scheduled to be offered, and anticipated OMO auctions during the week.
Foreign Exchange
The naira appreciated by 0.5% w/w to NGN1,358.25/USD buoyed by improved supply. Meanwhile, gross external reserves increased by USD201.90 million to USD52.26 billion (13 August 2026). In the forwards market, the naira appreciated across the 1-month (+0.5% to NGN1,380.62USD), 3-month (+0.5% to NGN1,418.41/USD), 6-month (+0.5% to NGN1,471.91/USD) and 1-year (+0.5% to NGN1,578.86/USD) contracts.
We expect the naira to remain broadly stable in the near term, underpinned by resilient portfolio inflows, strong investor confidence, and a widening current account surplus.