S&P Dow Jones Indices has placed Nigeria on its 2027 watchlist for a potential reclassification to “Frontier” market status, citing ongoing regulatory reforms aimed at improving market transparency, integrity, and investor accessibility. The index provider said it will monitor developments throughout 2026 before deciding whether to upgrade Nigeria from its current “Standalone” classification during the 2027 Country Classification Annual Review. A reclassification would mark a significant milestone for Nigeria’s capital market, potentially increasing its visibility among global investors and paving the way for stronger benchmark-linked foreign portfolio inflows. However, S&P noted that sustained progress in policy implementation, market accessibility, and operational resilience will be key considerations before any upgrade is granted.
Nigeria’s foreign exchange supply weakened in June, with total FX inflows declining by 26% month-on-month and 11% year-on-year to approximately US$2.8 billion, reversing the increase recorded in May. The moderation reflected weaker inflows from both domestic and foreign sources, although the month-on-month decline was largely driven by softer domestic contributions. Exporters accounted for the biggest drop in domestic inflows, with proceeds falling 39% month-on-month to US$867.9 million from US$1.4 billion in the previous month. The slowdown in exporter inflows points to weaker foreign currency earnings during the period and may limit FX liquidity in the near term despite ongoing reforms aimed at improving market efficiency. Market participants will continue to monitor the pace of FX inflows and the CBN’s ability to sustain liquidity in the official market, as persistent supply constraints could place renewed pressure on the naira.
The International Monetary Fund (IMF) has maintained its 2026 economic growth forecast for Nigeria at 4.1%, citing improving macroeconomic stability and favourable terms of trade despite a weakening global economy. The Fund also retained its 2027 growth projection at 4.3%, noting that ongoing reforms and Nigeria’s position as an oil exporter are expected to support economic expansion. However, it warned that rising prices for essential goods could worsen poverty and food insecurity, partly offsetting the benefits of stronger oil revenues. Meanwhile, the IMF lowered its global growth forecast to 3.0% for 2026, citing geopolitical tensions, higher energy prices, and persistent economic uncertainty.
Money Market
https://www.digital.zenithbank.com/ZEQ/ZEQ-jan-2026/index.html#p=1System liquidity saw an increasing trend throughout the trading week, opening at ₦2.29 trillion on Monday, and closing at ₦4.31 trillion. Week-on-week, the Nigerian Overnight Financing Rate (NOFR) held steady to close at 22.00%, while the Overnight (OVN) rates declined by 2bps to close at 22.23%.
We expect rate to continue to hover around this level.
Treasury Bills Market
The Treasury Bills market traded on an active note this week, as investors kept their focus on the NTB auction. Activity was initially subdued, as the 17 Jun bill was seen quoted at 17.60%/17.35%. During the week, the DMO conducted an NTB auction, where they were offering ₦700 billion across standard tenors. Although there was strong investor demand, we saw total allotments fall to 1.06 trn from total subscriptions of 2.03trn. Stop rates showed varied movements: 91-day rate increased by 2bps to close at 16.30%, the 182-day held steady to close at 16.50% and the 364-day maturity increased by 36bps to close at 17.70%, reflecting continued demand for higher yields. In the secondary market, buying interest improved following the auction, as the newly issued bill was seen quoted at 17.55%/17.50%. Demand was also observed on the 17 Jun bill, with trades consummated around the 17.30% level. By week-end, buying interest persisted, with activity concentrated on the newly issued 8 Jul bill, which was seen quoted at 17.45%/17.20% to close the week. Week-on-week, the average benchmark yield declined by 15bps to close at 18.36%.
We expect a relatively active week, as market participants focus on the upcoming NTB auction
FGN Bond Market
The FGN Bond market traded on a calm note this week. The week opened on a calm note, with activity concentrated on the mid-to-long end of the curve as mild buying interest from foreign portfolio investors (FPIs) emerged on the on-the-run bonds. Demand was primarily focused on the 2035 maturity, where trades were seen consummated at 18.50%, while the 2031 maturity also attracted selective buying interest, with bids seen at 18.10%. As the week progressed, market activity remained subdued ahead of the NTB auction, with trades on the 2035 maturity seen consummated at the 18.35% level. Following the auction, participants largely remained on the sidelines as they assessed the implications of the higher stop rates, particularly the 364-day bill which cleared at 17.70%, up 36bps from the previous auction. By week-end, there was minimal activity seen across the curve, with the 2035 maturity quoted at 18.45%/18.25%. Week-on-week, the average benchmark yield declined by 11bps to close at 17.41%.
We expect a cautious session, as market participants look forward to the Bond Auction Circular.
FGN Eurobond Market
The Eurobond market traded on a mixed note this week. The week opened on a mildly positive note as investors shifted their focus to U.S. economic data, with softer PMI figures pointing to a modest slowdown in business activity and reinforcing expectations of a less restrictive Fed policy stance. However, sentiment weakened after President Donald Trump warned that the United States would either reach a deal with Iran or “finish the job,” renewing concerns over a potential escalation in the conflict. The bearish tone persisted as the United States and Iran exchanged fresh strikes, threatening the fragile peace framework and raising concerns over oil shipping through the Strait of Hormuz. By week-end, the market traded on a mixed note after a U.S. official said Washington remained committed to finding a diplomatic solution and would engage in technical talks with Iran despite the recent hostilities. Week-on-Week, the average benchmark yield declined by 2bps to close at 6.91%.
We expect market direction to be driven by evolving geopolitical developments, upcoming CPI and PPI data, and Warsh’s testimony.
Currency Market
The value of the Naira to the dollar depreciated by 0.83% week on week to close at ₦1,379.62/$ at the Nigerian Foreign Exchange Market Window (NFEM).
Equities Market
The local bourse ended the day with the benchmark NGX All-Share Index (ASI) holding steady to close at 243,954.50 points while market capitalisation decreased marginally to close at N156.44 trillion. Market breadth was negative at 0.38x. Trading activity was active on the day, with the volume of shares traded decreasing by 73.36% to 441.22 million units, while total value of shares traded increased by 82.70% to ₦19.36 billion.
Reflecting the week’s performance, the NGX All-Share Index appreciated by 6.42%, as gains in INTBREW (+40.00%), RTBRISCOE (+32.02%), and LIVESTOCK (+28.47%) were offset by declines in MCNICHOLS (-28.57%), THOMASWY (-11.64%), and GEREGU (-10.00%).
Overall, the NGX has posted a year-to-date gain of 56.77%. Other notable indices are the NGX Top 30 Index (-0.05%; 9.08% 1WK; +56.45% YTD), NGX Banking Index (-0.78%; 7.70% 1WK; +41.78% YTD), NGX Oil & Gas Index (0.17%; 9.25% 1WK; +98.16% YTD), and NGX Insurance Index (0.06%; 5.34% 1WK; -4.74% YTD).
