Nigeria’s annual headline inflation rate eased to 23.18% in February, down from 24.48% in January, marking the second consecutive month of decline. This decrease follows the rebasing of the Consumer Price Index (CPI) by the National Bureau of Statistics (NBS), which updated the base year from 2009 to 2024 to better reflect current economic conditions. A key component of overall inflation, food inflation, dropped to 23.51% year-on-year in February, compared to 26.08% in January. Despite this improvement, food prices remain a significant concern, as supply chain challenges and exchange rate fluctuations continue to impact costs. Urban inflation stood at 25.15% year-on-year, a decline from 33.66% recorded in February 2024, while rural inflation dropped to 19.89% from 29.99% over the same period. The lower inflation rates in rural areas indicate some level of price stability, although purchasing power remains weak due to high living costs. Core inflation, which excludes volatile items like food and energy, was recorded at 23.01% in February. Policymakers closely watch this measure as it reflects underlying price pressures in the economy. The decline in inflation is a positive signal for Nigeria’s economy, however, with persistent challenges in food supply and exchange rate volatility, policymakers will need to remain vigilant in managing inflationary pressures.
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1Money Market
System liquidity opened the session at ₦1.96 trillion short. The Open Buy Back (OBB) and the Overnight (OVN) closed the day at 32.40% and 32.90%, respectively.
FGN Treasury Bills Market
The FGN Treasury Bills Market started the week quiet with yields elevated across the curve. We saw trades consummated on the 22 May NTB at 17.35% while the long-end OMO bills traded at 20% level. At the auction, the DMO allotted 503.92bn out of 902.06bn subscription. Stop rates on the 91-day, 182-day and 364-day bills closed at 18.00%, 18.5% and 19.94%, respectively. This represents a 100bps, 71bps and 155bps increase from previous levels. The newly issued 364-day bill was seen at 19.55/19.40. Week-on-week, the average benchmark yield increased by 32bps to close at 19.21%.
We expect cautious sentiment due to tight system illiquidity and PMA auction happening next week.
FGN Bond Market
The FGN Bonds Market traded on a quiet note likewise. Quotes were seen on the 31s at 20.00/19.80 and the 2033 maturity was seen bid at 20.25% and offered at 20.08%. Week-on-week, the average benchmark yield increased by 7bps to close at 18.49%.
We expect a calm session as focus shifts to bond auction.
FGN Eurobond Market
The FGN Eurobonds market sustained the bullish momentum at the start of the week following the recovery in oil prices, Fed’s outlook, reinforced likelihood of two rate cuts in 2025 and Trump’s remark on Fed cutting rate to mitigate the impact of April 2nd tariffs. Regarding macroeconomic data, the US Feds held rate constant at 4.50% (in line with expectation) and US retail sales data print came in at 0.3% (in line with expectation). Week-on-Week, the average benchmark yield increased by 11bps to 9.27%.
We expect the Final GDP data and Core PCE data to dictate market sentiments.
Currency Market
The value of the Naira to the dollar declined by 1.25% to close at ₦1536.89/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the week with the benchmark NGX All-Share Index (ASI) appreciating by 10bps to close at 104,962.96. Market capitalization also increased, closing at ₦65.83 trillion. Market breadth was positive at 1.38x, with 29 advancers and 21 decliners. This performance was driven by gains in LINKASSURE (+10.00%), LIVESTOCK (+9.93%) and MBENEFIT (+9.84%), and losses in REDSTAREX (-9.91%), LEARNAFRCA (-9.85%), and ETRANZACT (-9.43%).
Trading activity was mixed on the day, with the volume of shares traded increasing by 27.65% to 396.02 million units, while the total value of shares traded increased by 44.64% to ₦9.03 billion. The most actively traded stocks by volume were FIDELITYBK with 62.27 million units, ACCESSCORP with 38.33 million units, and TANTALIZER with 31.99 million units. In terms of value, TRANSCORPHOT led with ₦1.21 billion, followed by FIDELITYBK at ₦1.06 billion, and ZENITHBANK at ₦1.06 billion.
Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week loss of 0.97% with an overall year-to-date gain of 1.98%. Other notable indices are the NGX Top 30 Index (0.10%; -0.89% 1WK; 2.14% YTD), NGX Banking Index (0.12%; -2.55% 1WK; 1.28% YTD), NGX Oil & Gas Index (0.50%; -1.08% 1WK; -7.82% YTD), and NGX Insurance Index (-0.49%; -2.87% 1WK; -4.76% YTD).
