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 Rate Slowed down to 23.71% in April 2025
The National Bureau of Statistics (NBS) reported that Nigeria’s headline inflation rate slowed to 23.71% in April 2025 from 24.23% in March. On a month-on-month basis, inflation declined significantly to 1.86% in April from 3.90% in March, indicating a slower pace in the rise of prices across the economy.
Interestingly, this easing in inflation was driven by a slowdown in price increases across key segments, including farm produce, utilities, clothing and health. However, the improvement offers only a modest reprieve amid the ongoing cost-of-living crisis.
Food inflation declined sharply year-on-year to 21.26% in April from 40.53% in the same month of 2024. According to the NBS, this sharp decline is largely attributed to base-year effects following the inflation rebasing methodology. On a month-on-month basis, however, food inflation slowed marginally to 2.06% from 2.18% in March. The price moderation was led by staple foods such as maize flour, wheat, rice, dried okro, yam flour, and various beans.
Core inflation, which excludes volatile food and energy, eased to 23.39% year-on-year in April, compared to 26.84% in April 2024. On a monthly basis, core inflation fell to 1.34% from 3.73% in March indicating that inflationary pressures may be cooling.
Key Takeaways:
- Inflation moderated in April 2025 due to slower price increases across the board, except for energy and imported food.
- While it is too early to determine whether the moderation in inflation will be sustained, the CBN may take this into account at the upcoming MPC meeting and could begin to ease policy if it expects the trend to continue.
FX Update
Naira Strengthens to ₦1,599.33 at Official Market
As of May 15, 2025, the naira appreciated by 0.62%, with the official exchange rate settling at ₦1,599.33/$1. However, in the parallel market, it weakened by 0.50% from the previous week, trading between ₦1,620 and ₦1,630/$1.
Meanwhile, Nigeria’s external reserves have risen by 1.42% since hitting their recent low on April 25. Most recently, the reserves recorded a modest 0.57% increase, climbing from $38.123 billion on May 9, 2025 to $38.340 billion as of May 15, 2025.
Key Takeaways:
- The naira is stronger in the official market but still weaker in the parallel market, where people pay more for dollars. This means many small businesses and others find it hard to get dollars officially, which is a reflection of low dollar liquidity
- Nigeria’s foreign reserves have gone up a little, but still not sizable enough for a strong intervention by the Central Bank to support the naira.
Remember to save dollar-based goals in dollars, which can be done with apps like Ladda.
Equities Update
A Positive Comeback
Following a dip in the previous week, the NGX All-Share Index (ASI) rebounded to close this week with a gain of 0.90%, bringing its year-to-date (YTD) performance to 6.59%. This recovery reflects a modest return of investor confidence and renewed interest in select equities across the market
Sectoral Performance Overview:
A sector-by-sector analysis reveals across the board:
- Banking Sector: Recorded a 1.19% increase, reflecting renewed investor interest.
- Insurance Sector: Recovered strongly, posting a 2.47% gain for the week.
- Consumer Goods Sector: Led the market with a significant 4.08% increase.
- Oil & Gas Sector: Bounced back from last week’s decline, advancing by 0.66%.
- Industrial Goods Sector: Ended the week slightly positive with a 0.13% gain.
Key Takeaways:
- This week’s strong performance in the consumer goods and insurance sectors suggests a shift in investor sentiment toward more defensive and value-driven stocks.
- The overall market performance reflects growing optimism in Nigerian equities following better-than-expected Q1 earnings results.
Fixed Income Update
Short-Term Treasury Bills: Slight Increase in Yield
Over the past week, yields on short-term treasury bills have generally increased:
- 91-day T-Bill: Yield increase from 17.80% to 18.55%
- 182-day T-Bill: Yield increase from 18.36% to 20.25%.
364-Day Treasury Bills: Significant Increase in Yield:
The yield on the 364-day treasury bill saw an increase from 19.45% to 23.93%.
Bond Market Shows Marginal Increase:
In contrast to the movements in the treasury bill market, the bond market exhibited a slight decrease in yield, from 18.64% to 18.60%, an decrease of 0.04%.
Key Takeaways:
- Investors looking for safer, short-term opportunities may find treasury bills increasingly attractive, given the recent rise in yields.
- Meanwhile, institutional investors appear to be adopting a wait-and-see approach, likely holding back in anticipation of policy decisions at the upcoming MPC meeting of the CBN.
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
Moody’s Downgrades US Credit: A Wake-Up Call on Soaring Debt
Moody’s downgraded the US credit rating from “Aaa” to “Aa1” on Friday, citing concerns over the country’s $36 trillion debt, rising fiscal deficits, and growing interest costs. This marks the first downgrade by Moody’s since it began rating the US in 1919 and follows its 2023 warning about America’s unsustainable fiscal path. The move may impact global markets and complicate President Trump’s tax-cutting agenda. Despite promises to reduce spending to balance the budget and reduce borrowing, the Trump administration’s attempts have not been as impactful as expected.
Major Stock Markets Performance:
- S&P 500: Went up 2.53 % this week, pushing its year-to-date return to approximately 1.48%.
- FTSE 100 (UK): Saw a gain of 1.52% this week, maintaining a year-to-date return of approximately 6.26%.
- Nikkei 225 (Japan): Increased by 0.15% this week, but its year-to-date return is approximately -3.95%.
- CAC 40 (France): Gained 1.11% this week, and its year-to-date return is approximately 6.67%.
- MSCI World Index: Gained approximately 4.06% ,pushing its year-to-date return to approximately 4.16%.
Key Takeaways:
- Global markets show signs of recovery but remain vulnerable to potential trade wars and geopolitical risks.
- Ongoing negotiations around trade among the US and its trade partners offer encouraging signs of potential stability.
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!