MoneyAfrica| Investment Research
Weekly Market Commentary
June 1, 2026.
Good morning, readers, and welcome to this week’s edition of our stock market newsletter!
As always, our newsletter is divided into two sections: Green White Green, covering the Nigerian stock market, and the Star-Spangled Banner, focusing on the US market.
Macro Update
Nigeria’s Economy Grew Slower at 3.89% in Q1 2026
Nigeria’s economy remained resilient as real GDP grew 3.89% year-on-year in Q1 2026, but this performance was weaker than the 4.07% growth recorded in Q4 2025. The weakness in Q1 2026 was due to slower growth in the agriculture and industry sectors. Agriculture growth fell to 3.2% from 4.0% in Q4 2025 and industry growth moderated to 3.50% from 3.88% in the same period.
In the non-oil sector, growth fell to 3.94% in Q1 2026 from 3.99% in Q4 2025 due to a broad-based weakness in the sub-sectors, with the exception of ICT, financial services, trade and arts & entertainment sectors. The ICT sector returned to double digit growth territory with a 10.98% expansion from 7.55% in Q4 2025.
While the oil sector continued to expand, growth slowed to 2.57% from 6.79% in Q4 2025 partly due to a 4.0% year-on-year moderation in oil production to 1.55 million barrels per day from 1.62 million barrels per day in Q1 2025.
Oil refining was the fastest growing sub-sector with an expansion of 37.47% in Q1 2026, but its contribution to overall growth is negligible as oil refining was effectively 0% of real GDP. The nominal and real GDP of N2.5bn and N1.8bn respectively in oil refining betrays reason and suggests that new activities in the oil refining sector have not been captured.
We suspect that the NBS is yet to capture the output of the Dangote Refinery, which is a concern. The NBS is also not transparent about its sources and methods to enable an informed opinion on what is captured in oil refining. While Nigeria’s trade accounts already capture the impact of the refinery, Nigeria’s manufacturing output is currently grossly understated.
Overall, the Nigerian economy is growing too slowly to meaningfully create jobs and improve lives. The economy must be growing at double digit consistently to help Nigerian consumers recover from the damage of the FX and fiscal crisis of the past three years.
Key Takeaway:
- Nigeria’s economy is growing at a really slow pace, which is incapable of creating jobs and helping Nigerian consumers recover from the devaluation between 2023 and 2025.
FX Update
Naira Firms Further as Reserves Cross $49.3 Billion
The naira strengthened marginally in the official market the previous week, closing at ₦1,373.25/$ compared to ₦1,375.45/$ last week, a ₦2.20 improvement. In the parallel market, the naira strengthened to ₦1,375/$ from ₦1,390/$ last week, an appreciation of ₦15.”
The parallel market premium has now narrowed sharply to just ₦1.75 (0.13%), down from ₦14.55 (1.06%) last week. This near-closure of the gap between official and parallel rates signals stronger FX supply and reduced pressure on the black market.
External reserves continued their upward climb, reaching $49.34 billion as of May 26 up from $48.89 billion on May 21. The buildup is driven by foreign portfolio inflows, diaspora remittances, and oil export receipts. Forex turnover also rose week-on-week, reflecting active market participation.
Key Takeaway:
- The naira is getting stronger, not weaker. The gap between the official and black market rate has almost completely closed a sign that dollar supply is healthy. Rising reserves above $49.3 billion add another layer of confidence to Nigeria’s FX stability.
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Equities Update
NGX Ends May on a Positive Note Despite Sector Rotation
The NGX All-Share Index edged up 0.27% this week from last week’s 0.25% pullback. Year-to-date return ticked up slightly to 60.90% from 60.47%, and market capitalisation held strong at approximately ₦160.5 trillion.
Sector performance shifted significantly this week. Oil and Gas was the clear leader, surging 2.53% (now up 123.94% YTD), extending its position as the market’s best-performing sector. Insurance rebounded 1.41% after last week’s 1.77% decline. However, Banking reversed its gains, dropping 2.43% after last week’s 1.11% rise with Fidelity Bank notably featuring among the week’s top losers, down 9.79%. Consumer Goods slipped further by 1.52%, and Industrial Goods was nearly flat at -0.05%.
Key Takeaway:
- The NGX closed May 2026 on a strong note up 3.35% for the month and 60.90% year-to-date. The market is rotating: Oil and Gas and Insurance are attracting fresh money while Banking and Consumer Goods face selling pressure.
Fixed Income Update
Secondary market yields edged higher
In the secondary market, short-term T-bill yields nudged up slightly. The 90-day yield rose to 16.73% from 16.27% last week, and the 180-day yield climbed to 17.47% from 17.35%. The 364-day yield dipped marginally to 18.73% from 18.80%. The benchmark 10-year bond yield was nearly unchanged at 16.02%.
Investor sentiment in the bond market remains cautious as participants watch inflation trends and the CBN’s next rate decision before committing to long-term paper.
Key Takeaway:
- Short-term yields crept up slightly while the long end stayed flat.
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Wall Street Hits Record Highs as AI Surge and Ceasefire Relief Lift Markets
The most significant development of last week came on Wednesday, May 27, when a 60-day ceasefire agreement was reached in the US-Israel-Iran conflict during a White House cabinet meeting, targeting the reopening of the Strait of Hormuz. Oil prices began sliding immediately through US afternoon trading, continued cascading overnight through Asian markets, and bottomed out globally on Friday morning when Iran confirmed the Strait of Hormuz would reopen for commercial shipping. WTI (West Texas Intermediate) crude closed May at $87.36/barrel, having shed roughly 16% from its peak earlier in the month when prices briefly touched $104. Despite this, gas prices nationally still averaged a steep $4.49/gallon.
Global equity markets closed the week firmly in the green, driven by strong Q1 earnings, an AI-led tech surge, and the relief of lower energy prices.
In the US, the S&P 500 gained 1.80% for the week (now up 10.73% YTD) and the Nasdaq led with a 2.58% gain (up 16.05% YTD), powered by chipmakers like NVIDIA. The Dow Jones added 1.49% (up 6.18% YTD). The MSCI World Index rose 0.69% (up 9.43% YTD).
Europe was the outlier as the FTSE 100 slipped 0.33% (up 4.81% YTD) and France’s CAC 40 dropped 0.91% (up 0.42% YTD), weighed down by lingering energy and inflation concerns. Japan’s Nikkei surged 1.80% for the week, now up an impressive 31.76% YTD.
Key Takeaway:
- Strong earnings and AI optimism lifted markets globally, but the ceasefire was the week’s biggest macro event.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!