MoneyAfrica| Investment Research
Weekly Market Commentary
December 22, 2025.
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 Digital Economy Strengthens Government Finances Beyond Oil
The Federal Government’s 2026 budget of ₦58.18 trillion is the largest in Nigeria’s history. While a surplus of ₦88.73 billion from the Electronic Money Transfer Levy (EMTL) seems small compared to the total budget, it is a major win for the government. It proves that the digital economy is now a reliable way to collect revenue without depending on oil. This shift helps the government fund its massive ₦58 trillion plan with more stability and less borrowing.
Why Investors Should Take Note
- Digital Economy Expansion: The over-performance of the EMTL shows that Nigeria’s fintech and digital payment space is growing faster than expected, signalling a massive market for technology investors.
- Fiscal Stability: By hitting non-oil revenue targets, the government is reducing its risky “oil-only” habits. This creates a more predictable environment for businesses and reduces the risk of sudden tax hikes or currency crashes.
- Strategic Focus: Large allocations to security (₦5.41 trillion) and infrastructure (₦3.56 trillion) show that the government is trying to fix the “foundation” issues that have previously discouraged long-term investment.
Key Takeaway:
- The 2026 budget shows a government trying to move away from “oil-only” income. By using digital transaction taxes and setting realistic oil targets, the goal is to stabilise the economy. For everyday Nigerians, the success of this budget means lower inflation and better infrastructure. For investors, it signals a more predictable and modern financial environment where growth is driven by technology rather than just crude oil.
FX Update
Naira in Official and Parallel Market
In the official FX market, the naira closed last week at ₦1,457.84 per US dollar. In the previous week, it stood at ₦1,451.88 per US dollar, showing that the naira weakened in the official market. In the parallel market, the dollar traded with a buying rate of ₦1,480 and a selling rate of ₦1,496 per US dollar last week. This is a decline from the previous week’s parallel market rates, where the buying rate was ₦1,465 and the selling rate was ₦1,475, further indicating that the naira has weakened as it now takes more local currency to purchase one US dollar.
Meanwhile, Nigeria’s foreign exchange reserves increased to $44.56 billion in November, up from $43.15 billion in October. This growth is expected to continue, with forecasts projecting that reserves will reach $45 billion by the end of December. This buildup is primarily driven by improved oil receipts, sustained diaspora remittances, and the successful $2.4 billion Eurobond issuance in late 2024. These inflows have significantly enhanced the CBN’s ability to manage external obligations and have boosted the nation’s import cover to over 10 months.
Key Takeaway:
- Nigeria’s rising savings show the country is becoming more financially stable. This gives foreign investors confidence that Nigeria can pay its bills and makes it easier for them to do business here. While the naira is still under pressure, the government’s 2026 budget including a plan to manage its ₦23.85 trillion deficit shows a focus on building a stronger economy that creates jobs and supports big projects for everyone.
Remember to save dollar-based goals in dollars, which can be done with apps like Ladda. Just visit www.getladda.com to download. You can also earn up to 20% by investing in naira savings.
Equities Update
Banking and Consumer Stocks Lift the Market
The Nigerian Exchange (NGX) All-Share Index (ASI) rose by 1.76% last week. It gained 2,624.12 points to close at 152,057.38, up from 149,433.26 the previous week. As a result, the year-to-date return improved further to 47.73%.
The banking sector performed well. The NGX Banking Index rose by 2.75% to 1,463.56, supported by renewed buying interest in major bank stocks like Zenith Bank, GTCO (Guaranty Trust Holding Company), Stanbic IBTC, and Wema Bank, which have been among the top sectoral performers throughout the year.
Consumer goods stocks were among the top performers. The NGX Consumer Goods Index gained 4.51%. This sector led the market, closing at 3,726.91. Gains were driven by year-end stock buying and better company profits. Investors were encouraged as firms like Nestle, BUA Foods, and Champion Breweries successfully reduced their foreign exchange losses while maintaining steady sales.
The insurance sector also recorded solid gains. The NGX Insurance Index rose by 3.07% to 1,170.98, helped by continued buying in insurance stocks.
The oil and gas sector lagged the market. The NGX Oil and Gas Index fell slightly by 0.17% to 2,675.99, offering little support to the overall market.
Industrial goods stocks posted small gains. The NGX Industrial Goods Index rose by 0.72% to 5,565.13, supported by mild buying interest.
Key Takeaway:
- The market moved higher mainly because of strong gains in banking, consumer goods, and insurance stocks. Although oil and gas stocks underperformed, overall investor sentiment remained positive as the year-end approached.
Fixed Income Update
Nigeria’s Treasury Yields Show Shift in Investor Demand
Yields on Nigeria’s treasury bills and bonds changed this week, showing how investors are reacting to market conditions. The 91-day bill rose slightly to 16.10% from 15.79%, suggesting short-term cash is still tight. The 182-day bill fell a little to 17.25%, while the 364-day bill dropped to 20.09% from 20.41%, meaning investors are willing to lend for longer at slightly lower returns. Bond yields also fell to 15.45% from 16.53%, showing stronger demand for longer-term government debt.
Last week, the CBN also held an auction to sell these bills. There was a lot of interest from the public, especially for the one-year bills. Many people wanted to buy them, which allowed the government to sell them at slightly lower interest rates than before. This shows that people are confident about putting their money away for a longer time.
At the same time, new reports show that inflation, the speed at which prices of goods rise, fell to 14.45% this month. This is good news because it means prices are not rising as fast as they used to. Because the interest rates on treasury bills (around 20%) are now higher than the inflation rate (14.45%), people who invest their money are actually making a real profit. This is why many investors are rushing to buy these bills now, before the interest rates drop even further in the future.
Key Takeaway:
- The fall in longer-term yields shows the government can borrow more cheaply, while the small rise in short-term bills signals tight cash in the system. Because inflation is going down, investors can now make a good profit on their money. Investors should watch rates closely to find the best returns while managing risks.
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
Global Markets Gain as Softer US Inflation Fuels Rate-Cut Hopes
US inflation cooled down to 2.7% last week, which was lower than the 3.1% that experts expected. This drop from the previous 3.0% level makes it more likely that the Federal Reserve will lower interest rates in 2026. While these slower price increases helped boost both stocks and bonds, some investors were still worried. They weren’t sure if the data was 100% accurate because a 43-day government shutdown earlier this year made it difficult to collect all the necessary numbers for October.
Markets responded positively, with technology and growth stocks leading gains as lower rates improve valuations. Long-term diversified portfolios also benefited, while sectors sensitive to interest income, like financials and energy, saw smaller moves.
Market and sector performance:
The S&P 500 rose about +0.5%, led by tech and communication services. The Russell 2000 gained roughly +0.9%, benefiting from improved risk appetite. In Europe, the FTSE 100 edged up +0.1%, while the MSCI World Index climbed around +0.4%, showing modest global gains. In Asia, China’s Hang Seng Index fell about -1.5%, weighed down by regulatory concerns and profit-taking.
Investor Takeaway:
- Softer inflation favours growth and diversified investors, while energy, financials, and Chinese equities remain more volatile. Spreading investments across markets and sectors continues to be key for managing risk and capturing opportunities.
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!