MoneyAfrica| Investment Research
Weekly Market Commentary
June 29, 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 Taps $1.5 Billion from UAE Bank to Ease Dollar Shortage
The Federal Government last week secured $1.5 billion from First Abu Dhabi Bank, the UAE’s largest lender, as the first drawdown of a $5 billion financing facility. To get the $1.5 billion, Nigeria handed over naira-denominated government bonds worth approximately $2 billion as collateral pledging more than it borrowed.
The deal is not a conventional loan. It is structured as a Total Return Swap, where Nigeria uses its own government bonds as security to unlock dollar funding without going to the international bond market where borrowing costs are currently high. The funds are earmarked to ease dollar shortages, support the 2026 budget, and pay off more expensive existing debt.
For now, the impact is positive as reserves received a boost and the government avoided costly Eurobond rates. But the risk is real. If the naira weakens significantly or the value of the pledged bonds falls, Nigeria could be forced to provide additional collateral or repay the loan immediately. The IMF and Fitch Ratings have also warned that this type of structure sits outside standard debt reporting, meaning Nigeria’s true borrowing obligations are harder for the public to track.
Key Takeaway:
- Nigeria got the dollars it needed, but the UAE holds Nigerian assets worth more than the loan itself. The deal buys short-term relief at the cost of long-term transparency and if market conditions turn, the consequences could be immediate.
FX Update
Naira Weakens Further as Reserves Cross $51.2 Billion
The naira weakened in the official market last week, closing at ₦1,380.93/$, a depreciation of ₦10.48 from ₦1,370.45/$ the previous week. In the parallel market, the naira strengthened to ₦1,388/$ from ₦1,405/$ the previous week, an appreciation of ₦17.
The parallel market premium narrowed sharply to ₦7.07 (0.51%), down from ₦34.55 (2.52%) the previous week; the gap between the official and parallel market has almost completely closed again, a sign of improved dollar supply in the informal market.
External reserves climbed further to $51.248 billion as of June 26, up from $51.035 billion the previous week. The steady buildup is supported by higher crude oil production, improved FX inflows, and a derivatives financing arrangement with a UAE bank.
Key Takeaway:
- Continued climb of reserves and the sharp narrowing of the parallel market premium to just 0.51% are positive signals for naira stability. The weakening of the official rate and the strengthening of the parallel rate last week show that the two markets are moving toward each other, which reduces arbitrage opportunities and speculative pressure.
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Equities Update
NGX Falls for a Second Consecutive Week as Profit-Taking Persists
The NGX All-Share Index declined 1.65% last week, extending the previous week’s 3.56% drop and pulling the year-to-date return further down to 49.12% from 51.62%. The market has now fallen for two consecutive weeks.
Sector performance was mixed. Banking was the only sector to recover, gaining 3.51% and bringing its year-to-date return to 40.53% suggesting that the previous week’s sharp selloff attracted buyers back into tier-1 banking stocks. However, Oil and Gas bore the heaviest losses, dropping 9.86% and cutting its year-to-date return to 90.31% from 113.40% three weeks ago. Industrial Goods fell 8.21%, now up 79.72% for the year. Insurance dropped a further 4.39%, deepening its year-to-date loss to -6.07%. Consumer Goods slipped 1.53%, now up 16.33% for the year.
Looking ahead, the market is expected to remain mixed as profit-taking continues alongside selective buying in beaten-down stocks. Banking and Industrial stocks that have seen sharp corrections may attract value-focused buyers looking for quality stocks at lower prices. With the NGX having declined for two consecutive weeks, the market is searching for a firm base before any meaningful recovery can take hold. Expect cautious, stock-specific trading rather than a broad rally.
Key Takeaway:
- The NGX has now declined for two consecutive weeks, with Oil and Gas and Industrial Goods, the market’s biggest year-to-date performers bearing the sharpest losses. Banking’s recovery last week is an encouraging sign, but the broader market remains under pressure as profit-taking continues. Q2 earnings season will be the key catalyst to watch.
Fixed Income Update
Yields Rise Across the Board as CBN and DMO Drain Liquidity
The DMO held its monthly FGN Bond auction on June 22, offering ₦600 billion each across the 10-year and 20-year bonds. Total subscriptions came in at ₦705.22 billion and ₦708.27 billion respectively, with the DMO allotting ₦600.90 billion and ₦621 billion at marginal rates of 18.34% and 18.35%. While demand was cautious with short-term instruments yielding above 20%, investors demanded significantly higher rates to commit to long-term bonds.
The CBN followed with back-to-back OMO auctions on June 22 and June 23 to mop up excess liquidity from maturing securities. Across the three tenors 99-day, 70-day, and 140-day, total subscriptions reached ₦2.76 trillion against a combined offer of ₦900 billion, with ₦2.72 trillion allotted. Stop rates ranged from 19.99% on the 140-day paper to 20.75% on the 70-day paper.
T-bill yields rose across all tenors last week. The 90-day yield climbed to 16.83% from 16.66% the previous week, the 180-day rose to 17.75% from 17.79%, and the 364-day moved to 19.66% from 19.71%. The average benchmark bond yield rose to 17.12% from 16.81% the previous week.
OMO bills in the secondary market are yielding between 20.42% on the January 2027 paper and 21.51% on the July 2026 paper. This is higher than the previous week’s range, reflecting continued upward yield pressure.
Key Takeaway:
- The CBN aggressively drained liquidity through back-to-back OMO auctions while the DMO raised over ₦1.2 trillion in bonds at marginal rates above 18%. Rising yields across all instruments signal that investors are demanding higher returns across the board, a market adjusting to a higher-for-longer rate environment.
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Star-Spangle Banner
Tech Selloff Returns as Oil Falls Below $70 for the First Time This Year
The final reading for US Q1 GDP came in at 2.1%, revised upward from earlier estimates. The growth was supported by an 8.7% surge in private investment driven largely by AI-related spending and a 4.4% rebound in government spending. However, consumer spending moderated to 1.6% and a widening trade gap acted as a drag as imports jumped 21.4% against a 12.9% rise in exports. Globally, the World Bank projected 2026 growth at just 2.5%. This is one of the weakest non-recessionary readings in nearly 20 years, with roughly 25% of developing economies failing to close the income gap with wealthier nations.
Oil prices fell further last week, with crude touching $69.76/barrel on Thursday June 25. This is the first time this year prices dropped below $70. The decline was driven by continued easing of Middle East tensions following the ceasefire framework signed the previous week, though the Strait of Hormuz remains physically blocked.
Tech bore the brunt of last week’s selloff. The Nasdaq dropped 4.60% for the week, now returning 8.84% year-to-date, reversing much of the previous week’s 2.74% gain. The S&P 500 fell 1.95%, now at 7.43% year-to-date, while the Dow was more resilient, adding 0.60%, now at 7.93% year-to-date. The MSCI World Index declined 1.61%, now at 6.73% year-to-date. Japan’s Nikkei dropped 4.14%, pulling its year-to-date return to 37.79%.
Europe was the outlier: the FTSE 100 gained 1.40%, now at 5.81% year-to-date, while France’s CAC 40 slipped marginally by 0.18%, now at 2.89% year-to-date.
Key Takeaway:
- Oil falling below $70 last week is welcome relief for consumers and inflation, but tech stocks sold off again suggesting investors rotated out of high-growth names into defensive and value stocks. The gap between a resilient US economy and slowing global growth is widening, keeping markets volatile.
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We hope you find this edition insightful, and as always, stay focused on your financial goals!