MoneyAfrica| Investment Research
Weekly Market Commentary
October 5, 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
Strongest Expansion in PMI in Four Years
The PMI (Purchasing Managers’ Index) is a monthly survey asking business buyers whether things like orders, production and hiring went up or down. A reading above 50 means the economy is growing; below 50 means it’s shrinking.
The Stanbic IBTC Purchasing Managers’ Index (PMI) rose to 56.4 in September from 54.3 in August, its highest reading since February 2022. Since any reading above 50 signals expansion, the economy is not only growing but gaining momentum. However, input prices rose at their fastest pace in three months, meaning, businesses are paying more for materials and services.
This strong reading mostly came before the CBN’s rate cut. The Monetary Policy Committee cut the MPR by 350 basis points to 23% on September 22, late in the month, so cheaper borrowing has had little time to reach businesses. If banks lower lending rates, firms could expand output and hiring further in the coming months. Rising input costs could limit that boost, however.
There is also a near-term risk to activity. Public-sector unions began a three-day warning strike on October 2 over petrol prices and pay. A short strike is unlikely to dent the economy much, but an extended one would disrupt broader economic activity.
Key Takeaway:
- Business activity is at its strongest in over four years, and the effect of the CBN’s rate cut has yet to show up. If cheaper borrowing reaches businesses, the expansion could continue into the final quarter, but rising input costs and the public-sector strike are the risks to watch.
FX Update
Naira Holds Steady as Reserves Climb to $54.9 Billion
The naira closed the week at ₦1,328.17/$ in the official market on Friday, October 2, slightly stronger than ₦1,329.51/$ the previous Friday, a gain of ₦1.34.
In the parallel market, the naira firmed slightly to ₦1,372/$ (buy) on Friday from ₦1,375/$ the previous Friday, with the sell rate closing at ₦1,382/$. This narrowed the parallel market premium to ₦43.83 (3.30%) from ₦45.49 (3.42%) the previous week.
External reserves rose to $54.906 billion as of September 28, up from $54.875 billion on September 25, a fresh 18-year high. The steady build-up gives the CBN ample room to support the naira if pressure returns.
Key Takeaway:
- The naira was broadly stable last week, edging stronger in both the official and parallel markets and the parallel market premium narrowing to 3.30% from 3.42%. With reserves still rising, the FX environment remains stable for now.
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Equities Update
NGX Pauses After Three Weeks of Gains as Investors Take Profits
The NGX All-Share Index fell 0.52% last week, closing at 250,808.27 points. Year-to-date return eased to 61.17% from 62.01%. Market capitalisation fell by ₦812.61 billion to ₦162.84 trillion. Trading slowed in the holiday-shortened week, with turnover falling to 3.17 billion shares worth ₦155.02 billion from 4.69 billion shares worth ₦240.82 billion the previous week.
Banking led sector declines, falling 1.33% for the week, now up 77.17% year-to-date. Consumer Goods fell 0.91%, now up 2.04% year-to-date. Oil and Gas edged up 0.05%, now up 133.95% year-to-date. Insurance rose 0.61%, narrowing its year-to-date loss to -7.48%.
After three straight weeks of gains, investors took profits in heavyweight stocks, including MTN (-2.67%), First HoldCo (-4.18%), Access Holdings (-3.33%), GTCO (-3.07%) and NGX Group (-8.86%). Fidelity Bank (+8.80%) and ETI (+1.30%) bucked the trend, while ABC Transport topped the gainers’ list, up 45.10%. The significant rise in the share price appears to be driven primarily by investor sentiment and market expectations of future growth, increased trading demand, and general market positioning, rather than current earnings performance. While the company’s recent half-year financial results show a slight decline in net income, its underlying multi-year revenue growth and overall business expansion seem to have generated strong buying interest.
Market breadth stayed positive, with 44 gainers against 37 losers. Separately, Access Holdings received a further extension to file its audited H1 2026 results.
Key Takeaway:
- The NGX’s first weekly loss in four weeks reflects profit-taking after a strong run rather than a shift in sentiment. Positive market breadth and a year-to-date return above 61% suggest the broader uptrend remains intact. In dollar terms, the All-Share Index was up 74.1% year-to-date at the end of September, compared with 61.4% in naira, as the naira’s gains this year boosted returns for dollar-based investors.
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Fixed Income update
CBN Mops Up ₦4.7 Trillion at OMO Auction as Rates Ease Slightly
There was no Treasury bill auction last week. The CBN’s OMO auction on September 29 offered ₦2.5 trillion across 147-day, 182-day and 266-day tenors, up from ₦900 billion the previous week. Bids totalled ₦6.40 trillion, up from ₦5.74 trillion, and the CBN allotted about ₦4.69 trillion, more than double the previous week’s ₦2.26 trillion. Stop rates eased slightly: the 182-day cleared at 16.94%, down from 16.99% on the 180-day the previous week, and the 147-day at 17.24% from 17.29% on the 152-day. The new 266-day tenor cleared at 16.23%.
In the secondary market, T-bill yields were mixed. The 90-day yield fell to 17.31% from 18.41% the previous week, and the 180-day yield fell to 17.83% from 18.64%, while the 364-day yield rose to 18.69% from 18.27%.
The average benchmark bond yield was broadly flat at 15.69%, up slightly from 15.65% the previous week.
OMO bill yields eased: the November 2026 paper fell to 18.95% from 19.65%, and the January 2027 paper to 18.17% from 19.58%.
Key Takeaway:
- The CBN allotted more than twice as much at its OMO auction as the week before, showing it is actively draining excess cash from the banking system even after cutting the MPR. This suggests rates may fall more gradually than the rate cut alone implies. Still, with the 364-day bill yielding 18.69% in the secondary market against August inflation of 15.39%, T-bill investors are earning a real return of about 3.3 percentage points.
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Star-Spangled Banner
Weak Jobs Data Cools Fed Hike Bets as Stocks Close Mixed
The US economy added just 29,000 jobs in September, far below the 90,000 economists expected, and the unemployment rate ticked up to 4.2%. Earlier in the week, core PCE inflation, the Fed’s preferred inflation measure, cooled to 3%. Together, the data sharply reduced expectations of another rate hike: markets now price about a 16% chances of a Fed hike in October, down from 64% a week earlier.
Bond yields stayed high, however. The 10-year Treasury yield ended the week around 5.28%, up from 5.18% the previous week, as oil prices remained elevated. Brent crude topped $108 a barrel early in the week before easing to about $102 by Friday.
In the stock market, company news drove big individual moves. Nike fell 10% after missing earnings estimates, Boeing slid on a safety issue, and Micron beat earnings estimates.
The Nasdaq led gains, rising 0.45% for the week, now up 16.99% for the year. The S&P 500 fell 0.27%, now up 12.81% for the year. The Dow Jones fell 1.26%, now up 6.48% for the year. The MSCI World Index fell 0.64% now, up 10.5% for the year.
Other markets were mixed. Japan’s Nikkei gained 2.93%, now up 31.79% for the year. The FTSE 100 fell 2.18%, now up 5.13% for the year, while France’s CAC 40 fell 2.24%, now down 3.3% for the year.
Key Takeaway:
- A weak jobs report has sharply cut the odds of an October Fed hike, but long-term bond yields remain near multi-decade highs as oil keeps inflation risks alive. Markets are caught between slowing growth and sticky inflation, so expect some volatility until the picture clears.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!