MoneyAfrica| Investment Research
Weekly Market Commentary
July 27, 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
CBN Holds Interest Rate at 26.5% for the Second Consecutive Meeting
The Central Bank of Nigeria’s Monetary Policy Committee held its 306th meeting last week and voted to keep the benchmark interest rate at 26.5% for the second consecutive meeting. The Cash Reserve Ratio was also maintained at 45% for commercial banks, 16% for merchant banks, and 75% for non-TSA public sector deposits.
The decision reflects a cautious, data-driven approach. While headline inflation eased marginally to 15.91% in June, the CBN cited renewed Middle East geopolitical tensions and the risk of fresh upward pressure on global energy and food prices as key reasons to hold rather than ease. With oil prices already rebounding to $81/barrel following renewed US-Iran hostilities, the committee’s caution is well-founded.
The immediate effect is that borrowing costs for businesses, mortgages, and consumer credit remain elevated, continuing to constrain private sector expansion. At the same time, high rates keep fixed income yields attractive, sustaining investor appetite for treasury bills and government bonds.
Key Takeaway:
- The CBN is not ready to ease yet. Despite a slight dip in inflation, the risk of an energy-driven price reversal particularly from Middle East tensions keeps the committee firmly on hold. Rates are likely to stay elevated until there is clearer and more sustained evidence that inflation is on a convincing downward path.
FX Update
Naira Strengthens as Reserves Cross $52 Billion
The naira strengthened in the official market last week, closing at ₦1,362.08/$, an appreciation of ₦18.10 from ₦1,380.18/$ the previous week. In the parallel market, the naira weakened slightly to ₦1,410/$ from ₦1,413/$ the previous week, an appreciation of ₦3.
The parallel market premium widened to ₦47.92 (3.52%), up from ₦32.82 (2.38%) the previous week. The gap between the two markets continues to widen, signalling that dollar demand in the informal market is outpacing supply.
External reserves climbed to $52.029 billion as of July 23, the highest level since 2009 up from $51.915 billion the previous week. This means Nigeria’s reserves are strong enough to cover nearly eleven months of import payments without needing any new dollar inflows, far above the three-month minimum that international standards require. The buildup continues to be supported by crude oil revenues, diaspora remittances, and foreign portfolio investment with foreign investors actively purchasing Nigerian treasury bills and government bonds to take advantage of the high yields offered under the CBN’s tight monetary policy stance.
Key Takeaway:
- The official rate strengthened last week while reserves crossed $52 billion, both are positive signals for naira stability. However, the parallel market premium widening to 3.52% from 2.38% the previous week shows that demand for dollars outside the official market is growing.
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Equities Update
NGX Holds Steady as Banking Surge Offsets Industrial Selloff
The NGX All-Share Index declined marginally by 0.14% last week, pulling the year-to-date return slightly down to 56.45% from 56.67% the previous week. The week was defined by sharp volatility; a steep Monday selloff that wiped ₦1.32 trillion in market value was partially recovered by an aggressive banking-led rally on Friday that added ₦849 billion.
Most sectors gained last week. Banking surged 8.35%, now up 67.90% for the year, continuing its strong recovery from recent corrections. Industrial Goods rose 5.01%, now up 85.78% for the year. Insurance gained 3.86% but remains the only sector in negative territory for the year at -0.80%. Oil and Gas was nearly flat at 0.11%, now up 96.80% for the year. Consumer Goods was the only major decliner, falling 3.76%, now up 13.41% for the year.
Looking ahead, the coming week will be shaped by corporate earnings as major companies reach the July 31 filing deadline for Q2 2026 results. Tier-1 banks like Zenith Bank and Access Holdings are among the most closely watched. Investors will be looking for signs of improving profitability and progress in exiting CBN regulatory forbearance.
Results from consumer goods heavyweights like BUA Foods and Nestlé Nigeria will also be critical in confirming whether recent price declines in those stocks reflected genuine earnings concerns or were simply profit-taking. With the CBN holding rates steady at 26.5% and the next MPC meeting not until September, the monetary policy backdrop is stable putting corporate performance firmly at the centre of market direction next week.
Key Takeaway:
- The market, led by Banking and Industrial Goods, recovered strongly last week. Consumer Goods bucking the trend with a 3.76% decline suggests selective profit-taking continues, but the broader market momentum remains positive heading into Q2 earnings season.
Fixed Income update
DMO Raises ₦929 Billion at Bond Auction as Yields Soften Across Markets
The DMO held its monthly bond auction on July 20, offering ₦400 billion each across three reopened instruments: the 10-year (Jan 2035), 20-year (Apr 2037), and 15-year (Jun 2038) bonds. Total subscriptions reached ₦1.74 trillion across all three, with the DMO allotting ₦929.32 billion. Marginal rates settled at 18.34% for Jan 2035, 18.35% for Apr 2037, and 18.40% for Jun 2038, below the 18.50% to 18.60% range that market participants had expected due to stronger-than-anticipated demand.
T-bill yields fell across all tenors last week. The 90-day yield dropped to 15.96% from 16.46% the previous week, the 180-day eased to 18.08% from 18.06%, and the 364-day dipped to 20.54% from 20.90%. OMO bills yielded between 20.46% on the January 2027 paper and 21.48% on the September 2026 paper. The average benchmark bond yield eased to 17.39% from 17.45% the previous week, with buying concentrated in mid-to-long tenor papers.
Key Takeaway:
- Yields softened across the curve last week as high liquidity and stable monetary policy drove buying across fixed income instruments. The DMO’s successful ₦929 billion bond allotment at marginal rates below market expectations confirms that investor appetite for longer-term government debt remains strong.
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Star-Spangled Banner
Markets Drift Lower as Tech Pulls Back and Oil Surges Toward $100
UK inflation fell to 2.6% year-on-year in June, a 15-month low driven by lower fuel costs during the month and supermarket price competition. The decline is unlikely to last. A 13% increase in the UK energy price cap took effect in July and is expected to push headline inflation back up to 3.3%–3.5% by autumn. The Bank of England is widely expected to hold rates at 3.75% at its July 30 meeting, though swaps markets are already pricing in a potential rate hike by year-end.
Oil prices continued to climb last week, with Brent Crude closing at $96.78/barrel and WTI at $89.76/barrel up from around $81/barrel the previous week. Prices briefly tested the $100 threshold before pulling back following fluctuating reports on Middle East diplomatic progress. With oil nearly $10 higher than last week, the threat to July’s inflation reading—both in the US and globally—is more pronounced than before.
Markets were broadly weaker last week, with tech leading the decline. The Nasdaq fell 2.13% for the week, now returning 7.46% year-to-date, reversing much of the previous week’s gains. The S&P 500 slipped 0.61%, now at 8.28% year-to-date, and the Dow declined 0.38%, now at 8.08% year-to-date. The MSCI World Index edged down 0.09%, now at 7.73% year-to-date.
Europe and Japan were more resilient. The FTSE 100 gained 1.28%, now at 8.10% year-to-date, supported by energy stocks and lower tech exposure. France’s CAC 40 added 0.39%, now at 2.73% year-to-date. Japan’s Nikkei rose 0.73%, now at 28.35% year-to-date, a partial recovery from the previous week’s 4.61% decline.
Key Takeaway:
- Tech stocks continued to pull back while energy-heavy European markets held up better. Oil surging toward $100/barrel before pulling back to $96.78 is the week’s most significant development. If prices hold at current levels, July inflation data in both the US and UK will almost certainly show a reversal of June’s progress. The Bank of England’s July 30 decision and ongoing Middle East developments will set the tone for the week ahead.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!