MoneyAfrica| Investment Research
Weekly Market Commentary
July 13, 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 Placed on S&P Dow Jones 2027 Frontier Market Watchlist
Nigeria Placed on S&P Dow Jones 2027 Frontier Market Watchlist
S&P Dow Jones Indices is one of the world’s leading index providers, responsible for classifying stock markets into tiers—Developed, Emerging, Frontier, and Standalone—based on factors like market accessibility, regulatory transparency and the ease with which foreign investors can move capital in and out. These classifications matter because global investment funds are required to hold stocks that match their designated index tier. This means a country’s classification directly determines how much foreign capital flows into its market.
Nigeria was demoted to Standalone status in 2023, the lowest tier after severe foreign exchange bottlenecks made it difficult for foreign investors to repatriate their funds. On July 8, S&P placed Nigeria on its 2027 Country Classification Watchlist for a potential upgrade to Frontier Market status, citing improvements in regulatory transparency, market integrity, and foreign access. S&P noted that policy consistency and operational resilience must be sustained through the rest of 2026 for the upgrade to proceed.
An upgrade to Frontier Market status in 2027 would trigger automatic buying of Nigerian equities by index-tracking funds investment—funds that are legally required to hold stocks in every country on their designated index. This brings passive foreign capital into the market without Nigeria needing to actively attract it.
Nigeria’s benchmark index has returned 67% year-to-date in dollar terms, making it the world’s best-performing stock market, edging past South Korea.
For domestic investors, increased foreign buying typically drives up valuations of large-cap equities, particularly liquid banking and industrial stocks. However, greater foreign participation also means the local market becomes more sensitive to global sentiment shifts.
Key Takeaway:
Being placed on the watchlist is not yet an upgrade, but it is a formal signal that Nigeria is back in the global financial mainstream. Sustaining the reforms that earned this recognition, particularly FX stability and market transparency, will determine whether the upgrade materialises in 2027.
FX Update
Reserves Cross $51.7 Billion as Naira Drifts Lower
The naira weakened in the official market last week, closing at ₦1,379.62/$, a depreciation of ₦9.43 from ₦1,370.19/$ the previous week. In the parallel market, the naira weakened further to ₦1,400/$ from ₦1,395/$ the previous week, a depreciation of ₦5.
The parallel market premium narrowed marginally to ₦20.38 (1.48%), down from ₦24.81 (1.81%) the previous week. The two markets moved closer despite both weakening.
External reserves climbed to $51.743 billion as of July 9, up from $51.549 billion the previous week. The simultaneous rise in reserves and weakening of the naira reflects a deliberate CBN choice: the bank retained incoming dollar inflows to build reserves rather than releasing them into the market to support the exchange rate. With less dollar supply available to traders, commercial demand pushed the naira lower.
Key Takeaway:
Reserves continue to grow, but the CBN’s strategy of building buffers over defending the daily rate is allowing the naira to drift gradually in both markets. Whether this is sustainable depends on whether portfolio and oil inflows remain strong enough to keep reserves climbing while the exchange rate stays within a manageable range.
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Equities Update
NGX Surges 6.35% as S&P Watchlist Inclusion Drives Foreign Investor Confidence
The NGX All-Share Index gained 6.35% last week, snapping a three-week losing streak and pushing the year-to-date return back up to 56.67% from 47.31% the previous week. Market capitalization rose by ₦9.34 trillion to close at ₦156.45 trillion, with 60 stocks gaining against 28 declining.
Every sector closed higher last week. Industrial Goods led the recovery, surging 10.46% and bringing its year-to-date return to 88.73%. Oil and Gas gained 8.11%, now up 96.80% for the year. Banking rose 4.78%, now up 41.78% for the year. Insurance gained 4.04%, narrowing its year-to-date loss to -4.74% (still the only sector in negative territory for the year). Consumer Goods added 3.11%, now up 18.02% for the year.
The rebound was driven by investors buying back into stocks at lower prices following three weeks of profit-taking, reinforced by Nigeria’s placement on the S&P Dow Jones 2027 Frontier Market Watchlist. The watchlist inclusion, combined with Nigeria’s 67% year-to-date dollar return making it one of the world’s best-performing markets, attracted renewed foreign buying interest and growing external reserves. This added further confidence in naira stability.
Key Takeaway:
Last week’s sharp rebound confirms that the three-week correction was a pause, not a trend reversal. The S&P watchlist inclusion was the catalyst the market needed to bring renewed foreign interest and broad-based buying across all sectors.
In the secondary market, T-bill yields were mixed. The 90-day yield fell to 16.51% from 16.84% the previous week, and the 180-day dipped to 17.97% from 18.61%. The 364-day yield edged up to 20.91% from 20.78%, remaining above the 20% mark. The average benchmark bond yield rose marginally to 17.77% from 17.54% the previous week. OMO bills yielded between 20.87% on the January 2027 paper and 21.82% on the August 2026 paper.
Key Takeaway:
The 364-day yield climbing to 21.51% at the July 8 auction confirms that the upward yield trend is carrying into Q3. With the government’s aggressive borrowing programme now underway, yields are likely to remain elevated in the weeks ahead.
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Star-Spangled Banner
IMF Trims Global Growth Forecast as Middle East Tensions Keep Oil Elevated
The IMF last week projected global growth at 3.0% for 2026 a slight downgrade from its previous 3.1% forecast with a recovery to 3.4% expected in 2027. The downgrade reflects the lingering energy shock from the Middle East conflict, partially offset by an AI and technology investment boom. Global inflation was also revised upward to 4.7% for 2026 from 4.1% in 2025, as the steady decline in inflation seen since 2024 has stalled.
The growth picture is uneven. The US held at 2.3%, China was upgraded to 4.6%, while the Eurozone was cut to 0.9%. Sub-Saharan Africa remains broadly stable at 4.3%, with Nigeria’s growth held at 4.1%. The IMF’s baseline assumes the Strait of Hormuz begins reopening in mid-July, with full normalisation by March 2027. A renewed escalation in the Middle East remains the key downside risk.
Oil prices gained roughly 4% last week, settling near $71/barrel, as Strait of Hormuz shipping disruptions maintained a risk premium in energy markets despite ongoing diplomatic talks.
Markets were mixed last week. In the US, the Nasdaq gained 1.74% for the week, now at 13.08% year-to-date, and the S&P 500 rose 1.23%, now at 10.66% year-to-date. The Dow slipped 0.50%, now at 9.52% year-to-date. The MSCI World Index was nearly flat, gaining just 0.06%, now at 9.51% year-to-date.
Europe and Japan retreated. The FTSE 100 fell 1.70%, now at 5.70% year-to-date; France’s CAC 40 dropped 1.66%, now at 2.32% year-to-date; and Japan’s Nikkei declined 1.69%, now at 36.19% year-to-date partly driven by sharp yen volatility after the currency hit a nearly 40-year low past 162.5 per dollar.
Key Takeaway:
The IMF’s growth downgrade and rising inflation forecast confirm that the Middle East conflict is leaving a lasting mark on the global economy. Tech and AI continue to support US markets, but Europe and Japan are feeling the pressure making the divergence between tech-driven and energy-exposed economies wider.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!
Fixed Income Update
T-Bill Yields Rise as 364-Day Yield Hits 21.51%
At the July 8 auction, the CBN offered ₦700 billion across all three tenors and allotted ₦1.06 trillion against total subscriptions of ₦2.03 trillion a 2.9x oversubscription. Demand was again concentrated in the 364-day bill, which attracted ₦1.86 trillion of the total bids. The 182-day bill was notably undersubscribed, drawing just ₦29.94 billion against a ₦100 billion offer.
Compared to the June 17 auction, yields rose across two tenors. The 91-day true yield edged up to 17.00% from 16.98%, the 182-day held flat at 17.99% , and the 364-day climbed to 21.51% from 20.98% its highest level this year. No OMO or bond primary auction was held last week, though ₦2.21 trillion in maturing OMO bills was repaid on July 7, injecting fresh liquidity before the T-bill auction partially absorbed it.