MoneyAfrica| Investment Research
Weekly Market Commentary
September 07, 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 Grows 4.43% in Q2 2026
Nigeria’s real GDP grew 4.43% year-on-year in Q2 2026, up from 3.89% in Q1 2026 and 4.23% in Q2 2025 the strongest quarterly growth recorded since Q3 2024.
Growth was broad-based. The services sector, which accounts for 56.62% of real GDP, grew 4.60%, up from 3.94% in Q2 2025. Agriculture expanded 4.39%, a significant improvement from 2.82% the previous year, though security challenges, high input costs, and infrastructure constraints continue to weigh on the sector. The oil sector grew 7.31% year-on-year, supported by average daily production of 1.72 million barrels per day, up from 1.55 million bpd in Q1 2026. The industrial sector which covers manufacturing, construction, and mining grew 3.96% in Q2 2026, slowing sharply from 7.46% in Q2 2025, reflecting ongoing challenges with electricity, financing, and logistics.
The improvement in growth is encouraging, but Nigeria’s government has set a target of 7% annual growth by 2027. The current 4.43% growth rate, while improving, remains well short of that pace.
Key Takeaway:
- Nigeria’s economy is gaining momentum, with Q2 2026 delivering the strongest growth in two years. The non-oil sector continues to drive growth, while improved oil production provided an additional boost. The bigger test is whether this momentum can be sustained, broadened into industrial production, and ultimately felt in the daily lives of ordinary Nigerians.
FX Update
Naira Strengthens to 2026 High as Reserves Hit 18-Year Record
The naira continued to strengthen in the official market last week, closing at ₦1,321.21/$, an appreciation of ₦16.07 from ₦1,337.28/$ the previous week and the strongest closing level of 2026. In the parallel market, the naira held steady at ₦1,390/$, unchanged from the previous week.
The parallel market premium widened to ₦68.79 (5.21%), up from ₦52.72 (3.94%) the previous week.
External reserves crossed $54 billion for the first time since December 2008, climbing to $54.083 billion as of September 4, up from $53.310 billion the previous week. Year-to-date, reserves have grown by $8.5 billion from $45.57 billion at the start of the year. The buildup is supported by stronger oil earnings, remittances, and sustained capital inflows.
Key Takeaway:
- Reserves reached an 18-year high while the naira strengthened to its best level this year. However, the widening of the parallel market premium to 5.21% suggests unmet dollar demand.
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Equities Update
NGX Extends Rally as FTSE Russell Positioning and Oil Surge Drive Gains
The NGX All-Share Index gained 2.36% last week, closing at 246,992.44 points from 241,298.47 the previous week. Year-to-date return improved to 58.72% from 55.06%.
Market capitalisation rose to ₦159.56 trillion from ₦155.83 trillion. Trading activity also picked up significantly, with 4.36 billion shares worth ₦210.33 billion traded across 223,284 deals, up from 2.50 billion shares worth ₦123.22 billion the previous week.
Oil and Gas led all sectors, surging 9.10% for the week, now up 111.86% for the year driven by strong performances from Seplat Energy and Aradel Holdings. Banking rose 3.58%, now up 73.90% for the year. Insurance gained 3.85%, narrowing its year-to-date loss to -5.74%. Consumer Goods added 3.52%, now up 4.50% for the year. Industrial Goods was the only decliner, slipping 0.35%, now up 82.20% for the year.
The rally was driven by continued investor positioning ahead of Nigeria’s return to the FTSE Russell Frontier Market Index on September 21, which will require global index-tracking funds to automatically allocate capital into eligible Nigerian stocks. Adding to market excitement, Dangote Petroleum Refinery’s IPO priced at ₦525 per share for a ₦2.15 trillion offering is scheduled to open its order book on September 14. Institutional investors are expected to rebalance portfolios ahead of the subscription window, which could trigger some profit-taking in existing positions.
Key Takeaway:
- The NGX has now recovered strongly over two consecutive weeks, with the FTSE Russell reclassification and the Dangote Refinery IPO providing twin catalysts. The key risk ahead is whether pre-IPO portfolio rebalancing triggers short-term selling pressure in other sectors before the broader foreign inflows from the September 21 reclassification take hold.
Fixed Income update
CBN Cuts 364-Day Stop Rate to Lowest Level Since June as Demand Hits ₦3.35 Trillion
The CBN held its T-bill auction on September 2, offering ₦750 billion across three tenors. Total subscriptions reached ₦3.35 trillion, heavily concentrated in the 364-day bill, which attracted ₦3.24 trillion in bids against a ₦500 billion offer. The CBN allotted ₦865.71 billion in total.
The 364-day stop rate was cut by 0.31 percentage points to 16.84%, the third consecutive reduction and the lowest level since June 2026 with a true yield of approximately 20.70%. The 91-day and 182-day stop rates held at 16.30% and 16.50% respectively, with both tenors undersubscribed relative to the 364-day paper.
Three consecutive stop rate cuts on the 364-day bill from 17.59% in August to 16.84% last week confirm that the CBN is lowering short-term borrowing costs due to strong investor demand for the one-year instrument.
In the Secondary Market, T-bill yields were broadly stable last week. The 90-day yield rose marginally to 18.62% from 18.47% the previous week, the 180-day climbed to 18.85% from 18.50%, and the 364-day held nearly flat at 20.20% from 20.21%.
The average benchmark bond yield eased to 16.47% from 16.68% the previous week. OMO bills yielded between 19.80% on the January 2027 paper and 21.32% on the September 2026 paper.
Key Takeaway:
- The CBN has now cut the 364-day stop rate three times in a row, from 17.59% to 16.84%. Investors are accepting lower stop rates to lock in yields ahead of an expected broader easing cycle.
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Star-Spangled Banner
Strong Jobs Data Raises Rate Hike Fears as Markets Close Mixed
The US economy added 162,000 jobs in August well above the 53,000 forecast keeping the unemployment rate steady at 4.1%. A strong labour market supports consumer spending, which can drive prices higher and make it harder to bring inflation down to the Fed’s 2% target from its current 3.7% level. This raised rate hike odds for the September 15-16 Fed meeting to roughly 58%, sending the 2-year Treasury yield to 4.38%, its highest level since January 2026 while the 10-year yield rose to 4.78% and the 30-year hit 5.25%.
Oil also climbed, with Brent crude settling at $92.68/barrel, up from $94.39 the previous week but posting a 7.6% net gain across the full week as Middle East tensions intensified.
Markets closed mixed. The S&P 500 edged up 0.09% for the week, now returning 12.75% year-to-date. The Nasdaq gained 0.40%, now at 14.05% year-to-date, while the Dow slipped 0.27%, now at 11.13% year-to-date. The MSCI World Index gained 0.38%, now at 12.19% year-to-date. The FTSE 100 added 0.36%, now at 9.06% year-to-date, France’s CAC 40 fell 0.67%, now at 1.59% year-to-date, and Japan’s Nikkei declined 1.95%, now at 29.16% year-to-date.
Key Takeaway:
- A jobs report three times stronger than expected has made the September 16 Fed meeting a live risk event. Rising Treasury yields and elevated oil prices are tightening financial conditions even before the Fed acts. Next week’s CPI data will either confirm or challenge the rate hike narrative and markets will move sharply either way.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!