The domestic stock market closed the week on a negative note, as investor sentiment was dampened by competing liquidity demands from the highly anticipated Dangote Refinery IPO. Precisely, losses in ARADEL (-10%), BUACEMENT (-10.0%), FIRSTHOLDCO (-9.3%), NESTLE (-6.5%) and TRANSCORP (-8.1%) drove the All-Share Index lower by 1.6% w/w to 242,305.74 points.
September 11, 2026/Cordros Report
Global
According to the Bureau of Labor Statistics (BLS), US headline inflation remained unchanged at +3.4% y/y in August (July: +3.4% y/y), in line with market expectations. The steady print was primarily driven by higher energy prices amid the ongoing Middle East conflict, which offset the moderation in food inflation. More specifically, the energy index rose by 16.3% y/y (July: +14.7% y/y), reflecting higher gasoline (+27.4% y/y vs July: +24.6% y/y) and fuel oil (+52.0% y/y vs July: +39.1% y/y) prices. However, food inflation slowed to +2.7% y/y in August (July: +3.0% y/y), reflecting slower price increases for food at home (+2.2% y/y vs July: +2.7% y/y), while inflation for food away from home remained unchanged at +3.4% y/y. Elsewhere, core inflation (excluding food and energy) slowed by 10bps to 2.4% y/y (July: +2.5% y/y), driven by softer price increases in shelter and medical care services. On a month-on-month basis, consumer prices rose by 0.4% in August (July: +0.1% y/y), as higher gasoline prices outweighed lower electricity and natural gas prices. In the near term, inflation risks remain tilted to the upside, as the recent re-escalation of the Middle East conflict has caused oil prices to hover around USD100.00/bbl, potentially keeping energy prices elevated for longer. At the same time, recent trade restrictions on Canadian imports are likely to add further upward pressure on prices. Against this backdrop, we expect the Fed to hike its policy rate by 25bps at its September 16 meeting, as persistent energy-related inflation risks and trade-related price pressures could limit the scope for near-term easing. This is broadly aligned with the CME FedWatch Tool, which currently assigns an 85.6% probability of a 25-bps hike at the September meeting.
At its September 2026 policy meeting, the Governing Council of the European Central Bank (ECB) voted to raise its policy rate for the second time this year, reflecting inflationary pressures driven almost entirely by higher energy costs from the US-Iran conflict. Specifically, the rates on the deposit facility, main refinancing operations, and marginal lending facility were each raised by 25bps to 2.50% (Prev.: 2.25%), 2.65% (Prev.: 2.40%) and 2.90% (Prev.: 2.65%), respectively. Most notably, the ECB retained its 2026E inflation forecast at +3.0% y/y (Prev.: +3.0% y/y) but revised its projections higher for 2027E and 2028E, to +2.5% y/y (Prev.: +2.3% y/y) and +2.1% y/y (Prev.: +2.0% y/y), respectively. Meanwhile, growth forecasts were revised higher to +0.9% y/y for 2026E (Prev.: +0.8% y/y) and +1.4% y/y for 2027E (Prev.: +1.2% y/y), reflecting greater-than-expected resilience in the euro area economy, while the 2028E forecast remained unchanged at +1.5% y/y (Prev.: +1.5% y/y). Looking ahead, we expect the ECB to maintain a hawkish bias, as the prolonged energy shock keeps inflation risks tilted to the upside and raises the possibility of second-round effects on food, core prices and wages. However, the soft labour market and tighter financial conditions should encourage the Council to proceed cautiously. Consequently, we expect the Council to adopt a data-dependent, meeting-by-meeting approach as it seeks to return inflation to its 2.0% target.
Global Markets
Risk off sentiment dominated the global equities market this week as a resurgence in Middle East tensions lifted oil prices and drove a global bond selloff. During the week, brent crude climbed above USD100.00/bbl on renewed inflation concerns, which lifted US Treasury yields to multi-decade highs, with the 30-year Treasury yield reaching its highest sustained level since 2006. At the time of writing, major US indices (DJIA: -2.5%; S&P 500: -1.6%; NASDAQ: -1.6%) were poised to close the week lower, weighed down by rising Treasury yields and losses in technology and industrial names. European equities (STOXX Europe 600: -2.1%; FTSE 100: -2.1%) also declined, as higher bond yields and elevated oil prices weighed on sentiment across the region. Similarly, Asian markets (SSE: -0.8%; Nikkei 225: -1.6%) traded lower, with Japanese equities pressured by a stronger yen and technology weakness, while Chinese stocks declined amid higher yields and continued weakness in technology names. Elsewhere, the Emerging Market (MSCI EM: +2.5%) index advanced, supported by gains in Brazil (+1.7%), while the Frontier Market (MSCI FM: -1.1%) index declined on losses in Romania (-4.5%) and Kenya (-2.4%).
Domestic Economy
According to the National Bureau of Statistics (NBS), Nigeria’s total foreign trade increased by 5.6% y/y to NGN41.44 trillion in Q2-26 (Q2-25: NGN39.24 trillion | Q1-26: NGN34.79 trillion). In US dollar terms, total trade rose more sharply (+21.7% y/y to USD30.32 billion), supported by higher exports (+36.9% y/y to USD19.77 billion) and a modest increase in imports (+0.8% y/y to USD10.55 billion). The stronger export performance reflected higher shipments of crude oil (+24.4% y/y) and gas and refined petroleum products (+50.7% y/y), supported by increased domestic production and elevated global energy prices. Non-oil exports also strengthened (+41.1% y/y), partly due to higher shipments of chemical products, particularly urea and other nitrogenous fertilisers. Meanwhile, the modest increase in imports reflected stronger non-oil imports (+33.3% y/y), supported by improved FX availability and firmer demand for inputs and consumer goods. However, this was largely offset by lower oil imports (-61.9% y/y), following the continued expansion of domestic refining capacity and the resulting decline in petroleum product imports. Consequently, the trade surplus widened (+132.0% y/y to USD9.22 billion), driven by robust export growth and subdued import growth. Looking ahead, we expect sustained expansion in non-oil exports, improved domestic oil production and still elevated crude oil prices to support export earnings. Exchange rate stability and improved FX liquidity may continue to strengthen non-oil imports, although elevated inflation and weak purchasing power may limit the pace of expansion. Meanwhile, rising domestic refining capacity is expected to reduce petroleum product imports, partly offsetting broader import demand. Overall, we expect Nigeria’s trade surplus to widen in 2026 relative to the previous year.
Based on FMDQ data, total inflows into the Nigerian Foreign Exchange Market (NFEM) surged to its highest level in 16 months, strengthening by 28.6% m/m to USD6.68 billion in August (July: USD5.20 billion). The outturn primarily reflects stronger foreign inflows, which more than offset the decline in local inflows. Specifically, foreign inflows (accounting for 55.1% of total inflows) rose to an all time high, increasing by 97.0% m/m to USD3.68 billion (July: USD1.87billion) underpinned by stronger FPI (+113.3% m/m) inflows and other corporates (+47.7% m/m), while inflows from FDI (-80.7% m/m) declined. Within FPI, the significant improvement was led by a 103.4% m/m jump in fixed income inflows, alongside 438.9% m/m increase in equity inflows. We attribute the increase in foreign inflows to still attractive carry trade opportunities and sustained investor confidence in domestic financial markets. Meanwhile, local inflows (44.9% of total inflows) fell by 9.9% m/m to USD3.00 billion (July: USD3.33 billion), driven by declines across the Central Bank of Nigeria (CBN) (-29.1% m/m), Individuals (-17.2% m/m), Exporters (-1.8% m/m) inflows, despite higher inflows from Non-Bank Corporates (+15.4% m/m). 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. However, lingering global uncertainties, particularly geopolitical tensions, remain a downside risk to foreign inflows.
Capital Markets
Equities
The domestic stock market closed the week on a negative note, as investor sentiment was dampened by competing liquidity demands from the highly anticipated Dangote Refinery IPO. Precisely, losses in ARADEL (-10%), BUACEMENT (-10.0%), FIRSTHOLDCO (-9.3%), NESTLE (-6.5%) and TRANSCORP (-8.1%) drove the All-Share Index lower by 1.6% w/w to 242,305.74 points. As a result, the month-to-date and year-to-date returns settled at -0.5% and +56.2%, respectively. On market activity, trading volume and value declined by 16.4% w/w and 38.1% w/w, respectively. Sectoral performance was broadly negative, as the Insurance (-5.5%), Banking (-4.1%), Industrial Goods (-3.4%) and Consumer Goods (-2.6%) indices closed lower while the Oil & Gas (+2.8%) index closed higher for the week.
We expect the Dangote Refinery IPO to remain a key focus for investors in the coming week, with the public subscription window opening on 14 September 2026. As the offering competes with equities for investor liquidity, we expect persistent risk-off sentiment and attractive fixed income yields to continue weighing on market breadth.
Money Market and Fixed Income
Money Market
The OVN rate expanded by 18bps w/w to 22.1%, as OMO (NGN4.40 trillion) and net NTB (NGN982.81 billion) PMA debits offset inflows from OMO maturities (NGN3.07 trillion). Consequently, average system liquidity declined to a net long position of NGN3.33 trillion, from NGN4.53 trillion in the previous week.
Barring any significant CBN intervention, system liquidity should remain supportive next week, underpinned by NGN3.06 trillion in OMO maturities. However, fresh OMO issuances could absorb part of the liquidity surplus, keeping money market rates broadly around current levels.
Treasury Bills
The Treasury bills secondary market traded on a bullish note as the average yield across all instruments contracted by 16bps to 19.1%. By segment, average NTB secondary market yields contracted by 11bps to 18.8%, as sizeable unmet bids at Wednesday’s NTB primary market auction (PMA) filtered into the secondary market. Similarly, average OMO secondary market yields contracted 23bps to 20.4%, due to renewed offshore demand. At Wednesday’s NTB PMA, the DMO offered NGN750.00 billion across tenors, with total demand reaching NGN2.64 trillion, ultimately allotting NGN1.05 trillion. Stop rates contracted by 22bps to 16.62% for the 364-day tenor, while the 91- and 182-day tenors remained unchanged at 16.30% and 16.50%, respectively. At the OMO PMA on Tuesday, the CBN offered NGN1.00 trillion in bills, attracting NGN6.31 trillion in demand, and ultimately allotted NGN4.40 trillion. Stop rates settled at 19.14%, 18.49% and 18.41% for the 84-, 147- and 154-day tenors, respectively.
Next week, we expect the Treasury bills secondary market to retain a broadly bullish bias, supported by resilient domestic demand amid ample system liquidity.
Bonds
The FGN bond secondary market traded on a bullish note, as the average yield across instruments contracted by 14bps to 16.5%, driven by demand from both local and offshore investors. Across the benchmark curve, the average yield expanded at the short (+2bps), mid(+1bp) segments due to selling pressure on the FEB-2028 (+10bps), APR-2029 (+5bps), while it contracted at the long (-14bps) end due to demand for the JUL-2045 (-59bps) bond, respectively.
Over the medium term, we expect yields to remain relatively elevated, with the government’s sizeable borrowing requirements likely to keep pressure on market pricing, although improving offshore and local demand could provide some support in the near term.
Foreign Exchange
The naira depreciated 0.5% w/w to NGN1,327.33/USD, amid modestly stronger dollar demand from local and offshore participants. Meanwhile, gross external reserves increased by USD215.14 million to USD54.41 billion (10 September 2026). In the forwards market, the naira appreciated across the 1-month (+6bps to NGN1,349.70USD), 3-month (+3bps to NGN1,368.65/USD), 6-month (+2bps to NGN1,439.29/USD) and 1-year (+23bps to NGN1,542.825/USD) contracts.
We expect the naira to remain broadly stable around its current level in the near term, supported by resilient portfolio inflows, relatively firm investor sentiment and a widening current account surplus.