The domestic bourse market closed the week on a negative note, as losses in BUAFOODS (-4.0%), MTNN (-2.7%), BUACEMENT (-4.1%) and AIRTELAFRI (-1.6%) dragged the All-Share Index lower by 0.4% w/w to 250,808.25 points
October 2, 2026/Cordros Report
Global
According to the Bureau of Labor Statistics, US non-farm payrolls increased by 29,000 in September, down from a revised 133,000 increase in August and well below market expectations of +90,000. The weaker print points to subdued hiring, although the statistical adjustment used to remove normal seasonal hiring patterns may have exaggerated the slowdown from August. More specifically, employment gains were concentrated in healthcare (+17,000), construction (+11,000) and manufacturing (+9,000). In contrast, employment in financial activities declined by 7,000, while most other major sectors showed little change. Elsewhere, the unemployment rate rose modestly to 4.2% (August: 4.1%), while the labour force participation rate increased to 61.8% (August: 61.6%), indicating that a larger share of the working-age population is actively seeking a job. Meanwhile, average hourly earnings rose by +0.1% m/m, bringing annual wage growth to +3.0% y/y. Looking ahead, we expect the US labour market to remain broadly resilient, supported by firm consumer demand, healthy corporate profits and relatively low layoffs. However, employment gains are likely to remain modest as elevated energy costs, trade uncertainty and tighter financial conditions encourage firms to remain cautious about expanding their workforce.
According to Eurostat estimates, Eurozone headline inflation accelerated to 3.8% y/y in September, up from 3.2% y/y in August and above the market expectation of 3.6% y/y. The September reading marked the highest inflation rate since September 2023, reflecting higher food and services inflation alongside a sharp increase in energy prices following persisted tensions in the Middle East. More specifically, energy inflation rose to 18.8% y/y (August: +14.3% y/y), its highest level in more than three years. Food inflation also accelerated to 1.4% y/y (August: +1.1% y/y), as unprocessed food inflation increased to 4.0% y/y (August: +2.7% y/y), more than offsetting the moderation in processed food inflation to 0.4% y/y (August: +0.5% y/y). Services inflation also accelerated to 3.2% y/y, from +3.0% y/y in August. Core inflation, which excludes food and energy components, edged higher to 2.5% y/y from 2.4% y/y in August, suggesting a modest strengthening in underlying price pressures. Looking ahead, we expect inflationary pressures to remain tilted to the upside if the prolonged Middle East conflict keeps energy prices elevated, sustaining pressures on household energy, food and transport costs. Higher business costs could also broaden price pressures across goods and services, increasing the risk of further second-round effects. Accordingly, we expect the ECB to maintain a hawkish bias, with the possibility of a rate hike at its 29 October meeting.
Global Markets
Global equities traded on a broadly negative note this week, as rising US Treasury yields weighed on risk sentiment and pressured equity valuations. The 10-year Treasury yield climbed to its highest level since 2002, amid persistent inflation concerns, elevated oil prices and the Fed’s hawkish policy stance. At the time of writing, major US indices (DJIA: -1.7%; S&P 500: -1.0%; NASDAQ: -0.7%) were poised to close the week lower, weighed down by rising yields and losses across rate-sensitive sectors, including materials and financials. Similarly, European equities (STOXX Europe 600: -1.9%; FTSE 100: -2.5%) declined, pressured by the global bond selloff and weakness in banking names, including NatWest, Barclays and HSBC. Elsewhere, Asian markets were mixed, as Japanese equities (Nikkei 225: +2.9%) advanced for a third straight week, led by memory and chip-equipment names after Micron’s upbeat demand outlook on a rally in chip names after Micron’s strong earnings and upbeat AI-demand outlook, while Chinese equities (SSE: -1.2%) declined on profit-taking in technology stocks, amid US legislation targeting Chinese AI data-centre components. Finally, the Emerging Market (MSCI EM: -1.3%) index declined on losses in India (-2.7%) and China (-1.2%), while the Frontier Market (MSCI FM: -2.1%) index declined on losses in Vietnam (-2.4%) and Iceland (-1.4%).
Domestic Economy
According to the Debt Management Office (DMO), Nigeria’s public debt increased by 4.7% q/q to NGN166.79 trillion in Q2-26 (Q1-26: NGN159.35 trillion). We attribute the increase primarily to additional borrowings to finance government expenditures amid continued revenue shortfalls. Domestic debt, which accounted for 54.9% of total public debt, increased by 4.8% q/q to NGN91.59 trillion (Q1-26: NGN87.40 trillion), driven by an increase in both Federal government debt (+5.0% q/q) and state and FCT debt (+1.5% q/q). At the same time, external debt stock increased by 4.5% q/q to NGN75.20 trillion, reversing a 3.3% q/q decline to NGN71.95 trillion in Q1-26. In dollar terms, external debt increased by 5.0% q/q to USD54.52 billion (Q1-26: USD51.90 billion), reflecting higher disbursements from multilateral lenders (+3.8% q/q), including the World Bank Group (USD907.09 million), as well as increases in bilateral (+0.3% q/q), commercial loans (+8.4% q/q) and syndicated loans (+6.8% q/q) primarily for capital projects. On a year-on-year basis, total debt grew by 9.4%. Looking ahead, we expect total debt to increase further, primarily reflecting elevated government borrowings to finance the 2026 budget deficit. Our current deficit estimate of NGN22.74 trillion is below the NGN31.46 trillion deficit assumed in the 2026 budget. Overall, we project total public debt to reach NGN183.58 trillion, equivalent to 36.2% of GDP, by the year-end of 2026.
Based on the data from the Nigerian Exchange’s (NGX) Domestic and Foreign Portfolio Report, total transactions in the Nigerian equities market fell by 46.4% m/m to NGN1.27 trillion in August (July: NGN2.37 trillion), the lowest level since February 2026. The decline was broad based across domestic and foreign investors, which accounted for 95.1% and 4.9% of gross transactions, respectively. Domestic investor transactions fell to a six-month low, declining by 46.0% m/m to NGN1.21 trillion (July: NGN2.24 trillion), driven by lower institutional (-60.4% m/m) and retail (-5.1% m/m) activity. At the same time, foreign investor transactions fell to their lowest level since April 2025, down 53.2% m/m to NGN62.03 billion (July: NGN132.62 billion). Overall, the market recorded net inflows of NGN15.08 billion, a 39.6% m/m decline from the NGN24.95 billion recorded in July. The net inflation was driven mainly by NGN24.17 billion of net domestic inflows, which more than offset NGN9.09 billion of net foreign outflows. Looking ahead, we expect domestic investors to remain the primary drivers of market turnover. Nevertheless, the September 2026 350-bp MPR cut could exert further downward pressure on fixed-income yields and support some portfolio reallocation towards equities as the relative attractiveness of fixed-income instruments declines.
Capital Markets
Equities
The domestic bourse market closed the week on a negative note, as losses in BUAFOODS (-4.0%), MTNN (-2.7%), BUACEMENT (-4.1%) and AIRTELAFRI (-1.6%) dragged the All-Share Index lower by 0.4% w/w to 250,808.25 points, bringing the month-to-date and year-to-date returns to -0.2% and +61.4%. On market activity, trading volume and value declined by 32.9% w/w and 36.1% w/w, respectively. On sector performance, the Banking (-1.3%), Consumer Goods (-0.9%) and Industrial Goods (-0.3%) indices closed lower, while the Insurance (+0.6%) index closed higher. The Oil & Gas index closed flat.
Looking ahead, we expect market activity to remain choppy 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 expanded by 3bps w/w to 20.8%, as OMO PMA debits of NGN4.69 trillion exceeded inflows from OMO maturities (NGN2.43 trillion) and FGN bond coupon payments (NGN162.94 billion). Meanwhile, average system liquidity moderated to a net long position of NGN5.04 trillion from NGN5.85 trillion, as substantial OMO issuances absorbed liquidity. However, SDF placements remained elevated at NGN5.36 trillion, down from NGN5.78 trillion the previous week, reflecting a sizeable residual liquidity surplus.
In the coming week, we expect interbank funding rates to remain broadly stable, slightly above the 20.0% SDF rate. OMO maturities of NGN2.17 trillion should provide additional liquidity, although fresh OMO issuances could absorb part of the surplus, limiting any downward pressure on money market rates.
Treasury Bills
The Treasury bills secondary market traded on a bullish note as the average yield across all instruments contracted by 25bps to 18.0%. By segment, average NTB secondary market yields contracted by 8bps to 17.8%, reflecting mild buying interest across the curve. Similarly, average OMO secondary market yields contracted by 95bps to 18.8%, as market participants continued to adjust to the lower interest rate environment, while unmet demand at the Wednesday’s (30th September) OMO auction filtered into the secondary market. At the OMO PMA, the CBN offered NGN2.50 trillion in bills, attracting NGN6.40 trillion in demand, and ultimately allotted NGN4.69 trillion. Stop rates settled at 17.24%, 16.94% and 16.23% for the 147-, 182- and 266-day tenors, respectively.
Next week, we expect Treasury bills to retain a broadly bullish bias, particularly in the secondary market, where yields remain attractive relative to prevailing primary-market rates. We expect demand to remain strong at the Wednesday’s (7th October) NTB PMA, with any unmet bids potentially extending into the secondary market and providing further support for prices.
Bonds
The FGN bond secondary market traded on a bearish note, as the average yield across instruments widened by 10bps to 15.8%, amid profit-taking by local investors following the recent repricing of bonds after the rate cut. Across the benchmark curve, the average yield contracted at the short (-11bps) end reflecting demand for the MAR-2027 (-80bps) bond while it expanded at the mid (+14bps) and long (+8bps) segments due to selling pressure on the JUN-2032 (+61bps) and SEP-2036 (+20bps) bonds.
In the near term, we expect resilient local demand and improving offshore participation to sustain the underlying bullish tone, although intermittent profit-taking may drive some yield volatility following the recent repricing. Over the medium term, sizeable government borrowing requirements should keep yields relatively elevated, while the longer-term trajectory will remain contingent on monetary policy conditions, foreign inflows and domestic liquidity.
Foreign Exchange
The naira depreciated by 0.1% w/w to NGN1,332.00/USD, as renewed FX demand outweighed the impact of the CBN’s USD100 million intervention. Meanwhile, gross external reserves increased by USD62.17 million to USD54.93 billion (30 September 2026). In the forwards market, the naira depreciated in the 1-month contract (-9bps to NGN1,350.62/USD), while it appreciated across the 3-month (+4bps to NGN1,385.61/USD), 6-month (+28bps to NGN1,434.30/USD), and 1-year (+78bps to NGN1,529.80/USD) contracts.
We expect the naira to remain broadly stable around current levels in the near term, supported by resilient portfolio inflows, strong foreign reserves and a continued current account surplus. That said, downside risks remain from lower domestic naira yields and tighter global financial conditions. We believe that a narrower interest rate differential could reduce the relative attractiveness of naira assets and weaken portfolio inflows, increasing pressure on the exchange rate.