MoneyAfrica| Investment Research
Weekly Market Commentary
August 24, 2026.
Good day , 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 Headline Inflation Falls to 15.43% in July 2026
Nigeria’s headline inflation rate fell to 15.43% year-on-year in July 2026, down from 15.91% in June, a decline of 0.48 percentage points and the second consecutive monthly drop. This is significantly lower than the 24.94% inflation rate recorded in July 2025. Month-on-month, inflation eased to 1.57% from 1.66% in June, meaning prices are still rising but at a slower pace.
The decline was driven mainly by a sharp deceleration in core inflation, which strips out volatile food and energy prices. Core inflation fell to 14.97% year-on-year from 15.92% in June, and collapsed to just 0.15% month-on-month from 1.66%, reflecting continued naira stability and easing logistics costs feeding through to non-food, non-energy prices.
Food inflation, however, moved sharply in the opposite direction. Year-on-year food inflation jumped to 20.31% from 17.52% in June, while month-on-month food inflation surged to 5.56% from 3.75% driven by price increases in crayfish, pepper, onions, tomatoes, rice, garri, and beef.
Looking ahead, two risks could affect August inflation. Oil prices back above $90/barrel due to Middle East tensions feed directly into transport and logistics costs, the same channel that drove food inflation higher in July. If oil stays elevated, August food inflation could accelerate further. On the exchange rate, the naira strengthened in both markets last week and the parallel market premium narrowed, a positive development that supports continued easing in core inflation if the trend holds. The CBN’s next MPC meeting is scheduled for September 21-22, and the current data gives little room for any discussion of rate cuts.
Key Takeaway:
- The headline decline masks two opposing forces. Core inflation cooling sharply to 0.15% month-on-month shows the CBN’s tight monetary policy is working on non-food prices. But food inflation accelerating to 5.56% month-on-month at its fastest pace this year is a serious concern, as food represents the largest share of household spending for most Nigerians. The CBN is unlikely to ease rates until food price pressures show a convincing and sustained decline.
FX Update
Naira Extends Gains as Reserves Hit 17-Year High
The naira strengthened in the official market last week, closing at ₦1,357.60/$—an appreciation of ₦8.08 from ₦1,365.68/$ the previous week. In the parallel market, the naira held steady at ₦1,415/$, unchanged from the previous week.
The parallel market premium widened to ₦57.40 (4.23%), up from ₦49.32 (3.61%) the previous week, as the official rate’s gain outpaced the parallel market.
External reserves climbed to $52.657 billion as of August 19 a 17-year high up from $52.258 billion the previous week, a gain of approximately $399 million. The buildup continues to be supported by foreign exchange inflows and steady oil revenues.
Key Takeaway:
- The naira strengthened in both the official and parallel markets last week while reserves hit a fresh 17-year high, the most positive FX outcome in several weeks. The parallel market premium narrowing to 3.97% from 4.23% suggests that dollar demand in the informal market is easing. If this trend continues, it points to improving confidence in the official market’s ability to meet dollar demand.
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Equities Update
NGX Falls 1.35% as Sell-Off Broadens Across Most Sectors
The NGX All-Share Index declined 1.35% last week, closing at 239,351.16 points from 242,619.20 the previous week. Year-to-date return eased to 53.81% from 55.91%. Market capitalisation fell to ₦154.534 trillion from ₦156.624 trillion. Only 18 stocks advanced against 59 decliners, a sign that selling pressure was broad and not concentrated in a few names.
Oil and Gas led the decline, falling 4.64% for the week, now up 85.76% for the year. Insurance dropped 3.75%, deepening its year-to-date loss to -8.65%. Banking fell 2.92%, now up 63.18% for the year. Consumer Goods was the only sector to close higher, gaining 0.05%, now up 1.62% for the year. Industrial Goods was nearly flat at 0.00%, now up 82.84% for the year.
Looking ahead, the market is expected to remain cautious. Profit-taking has now shaved approximately ₦5.42 trillion off market capitalisation over the past 20 days, and with most tier-1 bank results delayed until late September, there is no immediate earnings catalyst to reverse the trend. Selective buying in fundamentally strong, dividend-paying stocks is expected to continue, but a broad market recovery is unlikely until the tier-1 bank earnings land.
Key Takeaway:
- The sell-off deepened last week with only 18 stocks advancing against 59 declining. Oil and Gas and Insurance led losses while Consumer Goods barely held ground. With fixed income continuing to offer attractive returns and tier-1 bank results delayed until late September, equities face a difficult few weeks ahead.
Fixed Income update
DMO Raises ₦1.73 Trillion at Bond Auction as Yields Edge Higher
The DMO held its monthly bond auction on August 17, offering ₦1.10 trillion across three reopened instruments. Total subscriptions reached ₦1.73 trillion, a 57% oversubscription reflecting continued strong investor appetite for longer-dated government paper.
Marginal rates settled at 17.15% for the 10-year (Jan 2035), 17.19% for the 20-year (Apr 2037), and 17.79% for the 15-year (Jun 2038). Compared to July’s auction, where marginal rates cleared between 18.34% and 18.40%, this week’s rates came in notably lower, suggesting investors accepted less yield to secure long-term paper, a sign of confidence in the rate outlook.
In the Secondary Market, T-bill yields rose across all tenors last week. The 90-day yield climbed to 17.21% from 17.26% the previous week, the 180-day rose to 19.30% from 18.15%, and the 364-day increased to 20.70% from 20.12%. The average benchmark bond yield rose to 17.00% from 16.79% the previous week. OMO bills yielded between 20.39% on the January 2027 paper and 21.38% on the September 2026 paper.
Key Takeaway:
- The DMO’s bond auction drew strong demand despite offering lower marginal rates than July investors locked in long-term yields ahead of an expected rate easing cycle. Secondary market T-bill yields continued to edge higher, keeping fixed income attractive relative to equities
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Star-Spangled Banner
Markets Retreat as Bond Yields Surge and Oil Climbs Toward $95
The Middle East conflict continued to drive global market conditions last week. Brent crude surged over 6% to close near $94.39/barrel as tensions in the Strait of Hormuz intensified alongside threats of US sanctions on Iranian trading partners. Higher oil prices kept inflation risks alive, which in turn pushed long-term bond yields higher US 30-year Treasury yields hovered near 5.3%, with European, Japanese, and UK yields also hitting multi-year highs. Rising yields increase borrowing costs and make equities less attractive, weighing on sentiment despite otherwise resilient economic data.
On the economic side, the US August flash PMI composite hit a 52-month high of 56.0, driven by a services sector surge to 56.8. Manufacturing slipped to 53.2, reflecting shipping disruptions from the same Middle East conflict. The Fed is widely expected to hold rates at its September 16 meeting, with markets pricing in a 64% probability of a pause.
Despite strong PMI data, markets closed lower as rising bond yields and oil prices dominated sentiment. The S&P 500 fell 1.43% for the week, now returning 12.11% year-to-date. The Nasdaq dropped 2.05%, now at 12.64% year-to-date. The Dow declined 0.85%, now at 10.85% year-to-date. The MSCI World Index slipped 0.76%, now at 11.80% year-to-date.
Japan’s Nikkei fell 4.63%, pulling its year-to-date return to 31.14%, hit by a strengthening yen and global risk-off sentiment. Europe was mixed; the FTSE 100 gained 0.62%, now at 8.91% year-to-date, while France’s CAC 40 fell 1.11%, now at 4.11% year-to-date. Gold climbed above $4,600/oz and Bitcoin rallied past $77,000 as investors rotated into safe-haven assets amid a weaker dollar.
Key Takeaway:
- Strong economic activity data was not enough to lift markets last week. Surging bond yields and rising oil prices driven by Middle East tensions dominated sentiment, pushing investors toward safe-haven assets like gold and away from equities. The Fed’s September 16 meeting is the next key inflection point with a 64% probability of a hold, any surprise shift in tone could move markets sharply.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!