MoneyAfrica| Investment Research
Weekly Market Commentary
August 18, 2025.
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.
Green White Green Recap
Macro Update
Nigeria’s Inflation Eases to 21.88% in July 2025
Nigeria’s headline inflation slowed to 21.88% in July from 22.22% in June, as the Consumer Price Index (CPI) rose to 125.9 from 123.4. Food inflation, which has the biggest weight in the basket, increased to 22.74% from 21.97% due to ongoing supply challenges. Core inflation which excludes volatile food and energy prices was relatively steady at 21.33%.
The Central Bank of Nigeria kept its benchmark interest rate at 27.50% for the third consecutive meeting, maintaining a tight policy to support the disinflation trend that began earlier this year after a change in measurement methodology brought inflation down from 34.8% in December 2024.
Although slower headline inflation points to gradual price stability, rising food costs remain a strain on households and could slow economic recovery. Policymakers are likely to proceed cautiously, aiming to keep inflation under control while encouraging growth.
What This Means for Investors
Prices are going up more slowly, which is a good sign for the economy and can boost investor confidence. High interest rates mean savings and bonds remain attractive, while stocks could benefit if consumer spending improves. However, with food prices still rising, many households may have less money for other purchases, which could keep economic growth moderate.
Key Takeaways:
- Price Stability Emerging: Headline inflation has eased for four consecutive months, hinting at a slow but steady stabilisation.
- Food Prices Still the Threat: Rising food costs remain the biggest risk to household budgets and overall inflation control.
- Tight Policy Stays: The CBN is likely to keep rates high until inflation pressures, especially from food, ease further.
FX Update
Naira Exchange Rate Performance
The naira had a quiet but telling week. It closed at ₦1,539.76 per US dollar, slightly stronger than ₦1,537.38 the previous week. In the street market, however, it held steady at around ₦1,560.
The gap between the official and street rates remains wide at about ₦20.24, showing that currency pressures persist despite the small gain in the official market.
Meanwhile, Nigeria’s external reserves climbed to $40.15 billion from $39.54 billion last week, the highest since January. This rise could give the Central Bank more room to manage foreign exchange demand and help reduce sharp swings in the naira’s value.
Key Takeaway:
- The naira is holding steady for now, but the wide gap between market rates points to lingering currency strain. The jump in reserves is a positive sign, yet the market will be watching closely for policy moves that could close that gap.
Remember to save dollar-based goals in dollars, which can be done with apps like Ladda. Just visit www.getladda.com to download. You can also earn up to 20% by investing in naira savings.
Equities Update:
Insurance, Industrials, and Consumer Goods Keep Market Strong Despite Slight Dip
The NGX All-Share Index fell by 0.39% to close at 145,300.01 points, as some investors took profits after recent big gains.
Even with this small drop, the market is still up 11.53% this month and an impressive 41.17% since the start of the year. Market capitalisation stayed around ₦92.3 trillion.
Sector Performance
- Insurance: The star performer. Stocks like Mutual Benefits Assurance saw profits soar, lifting the sector’s monthly gains to between 17% and 41%.
- Industrial Goods: Strong growth, with an 8.7% monthly rise led by cement and glass makers.
- Consumer Goods: Up 8–11% on the back of solid earnings from big FMCG companies.
- Banking: Mixed results, some weekly declines, but still up about 18% for the year.
- Oil and Gas: Still struggling. Recent weeks saw slight gains (~0.2%), but the sector is down around 10% this year.
Key Takeaways
- Insurance is leading the pack.
- Industrials and FMCG are riding strong demand.
- The market remains strong despite some profit-taking.
Fixed Income Update
Treasury Bills and Bonds Show Mixed Moves
The 91-day bill in the secondary market rose slightly from 17.10% to 17.14%, as demand for very short-term bills cooled a little. The 182-day bill saw a bigger jump from 18.46% to 19.00%, showing that some investors are avoiding mid-term options and either keeping it short or going long for better returns.
On the other hand, the 364-day bill dropped slightly from 19.53% to 19.46%. This small decline suggests that despite inflation concerns, some investors are locking in their money now in case interest rates come down later.
In the bonds market, the average yield went up from 16.21% to 16.35%, reflecting a cautious mood as investors keep an eye on inflation and possible changes in monetary policy.
Key Takeaway:
- Short- and mid-term treasury bill yields rose this week, while the longest tenor dipped slightly. Bond yields edged up, showing that investors are still careful about long-term borrowing costs.
You can invest in treasury bills to save for your short-term goal on rent, schools, fees, etc. through Ladda—a fintech app that helps you save at high returns.
For long-term goals, naira-denominated fixed income instruments are not suitable due to inflation and currency risks .
Star-Spangled Banner Recap
US Inflation Stays Steady, But Business Costs Are Going Up
US inflation data this week painted a mixed picture. Consumer prices (CPI) stayed steady at 2.7% year-over-year, suggesting some stability for households. But beneath the surface, producer prices (PPI) surged 0.9% in July, the sharpest jump in three years, showing that businesses are facing higher costs on goods and services. Consumers also grew more uneasy, with inflation expectations climbing to nearly 5%, reflecting fears that prices could stick around longer than hoped.
This puts the Federal Reserve in a tough spot. Fewer new jobs make the case for cutting interest rates, but rising business costs and fears of higher prices make it risky to do so. Now, no one is sure if the Fed will still cut rates in September.
Why This Matters:
Even if prices don’t feel like they’re rising fast at the store, the pressure building on businesses could eventually spill over into consumer costs. If inflation expectations keep climbing, it becomes harder for the Fed to cut rates without risking another wave of price hikes. For households and investors, it means we’re not out of the inflation woods yet—and the Fed’s next move could set the tone for markets in the months ahead.
Stock Market Performance
- S&P 500 (US): Up +0.8%, lifted by tech and banking stocks
- Nasdaq (US): Rose +1.1%, driven by big tech gains
- Dow Jones (US): Gained +0.6%, led by industrial shares
- FTSE 100 (UK): Up +0.3%, following Wall Street’s lead
- Nikkei 225 (Japan): Fell –0.4% on weak manufacturing data
- CAC 40 (France): Up +0.5%, supported by strong luxury sector earnings
- MSCI World Index: Up +0.4%, showing global investor confidence
Key Takeaways:
- Producer Prices (PPI): Rose 0.9%, showing businesses are paying more and may pass it on.
- Consumer Mood: People are less confident and expect higher prices ahead.
- Fed’s Challenge: Deciding whether to cut rates or hold back because of inflation risks.
Remember to always save for your dollar goals in dollars. You can do this with us on Ladda—a fintech app that helps you save at high returns.
We hope you find this edition insightful, and as always, stay focused on your financial goals!