Global Market Updates:
Economic Growth Slows, and Job Market Softens
The U.S. economy contracted at an annualized rate of 0.5% in Q1 2025, reversing from 2.4% growth in Q4 2024. The slowdown was driven by a surge in imports that outpaced domestic output.
Meanwhile, initial jobless claims declined by 10,000 to 236,000 for the week ending June 21—below forecasts, but still above the 2025 average. Continuing claims rose to 1.97 million, the highest since November 2021, pointing to a slower pace of labour market recovery.
U.S. Stock Markets Rally
The three major U.S. stock indexes surged higher for the week as falling oil prices and easing trade tensions boosted investors’ sentiment. The S&P 500 on Friday exceeded the record high that it had set four months earlier while the NASDAQ topped a record reached last December. The Dow remained nearly 3% below its historic peak.
The S&P 500, NASDAQ and the Dow Jones all closed +3.5%, +4.3% and +3.8% higher respectively.
Nigeria Domestic Market Updates
New Tax Reform Signed Into Law
On 26 June 2025, President Bola Tinubu signed four major Tax Reform Bills into law, including the Nigeria Tax Act, Tax Administration Act, Revenue Service Act, and Joint Revenue Board Act. This landmark overhaul aims to simplify Nigeria’s tax framework, replace overlapping levies, streamline administration across government levels, and bolster revenue collection.
The Nigerian Stock Market: Bullish Momentum Continues
The Nigerian Stock Market sustained its bullish momentum, with the NGX All-Share Index rising 157 basis points week-on-week at 119,995.76 points, driven by strong gains in Agric and Industrial stocks like OKOMUOIL and PRESCO. Early banking sector demand gave way to profit-taking, while bargain hunting in BUACEMENT, ZENITHBANK, and others sustained momentum. Offshore interest targeted key blue-chip stocks like OKOMUOIL, ACCESSCORP, GTCO, STANBIC, and CADBURY, while local investors focused on ZENITHBANK, MTNN, SEPLAT, and NAHCO.
Fixed Income Market
The Treasury Bills market traded cautiously, with light volumes and selective interest, especially in mid-to-long tenors. Early bearish sentiment was curbed midweek as lower stop rates at the FGN bond auction spurred demand, leading to a 20–30 basis points drop in yields. The June 4 Nigerian Treasury Bills (NTB) saw particular interest, dipping 10 basis points.
Overall, average NTB mid-yield declined 57 basis points week-on-week to 18.34%.
The Eurobond market opened with volatility due to rising oil prices, Middle East tensions and evolving U.S. Fed outlook. Markets dipped early as oil prices surged on U.S. support for Israeli strikes but later rebounded following a limited Iranian response and ceasefire news. Dovish Fed signals fuelled a midweek rally, with Nigerian and Egyptian bonds outperforming, while Angola lagged.
Nigerian Eurobonds’ average mid-yield fell 30 basis points week-on-week to 8.68%.
The FGN local bond market started quietly but gained momentum midweek after strong auction demand and lower stop rates (17.90% for 2029s and 17.95% for new 2032s) drove a 15–20 basis points yield drop. Demand focused on February 2031s, May 2033s and June 2032s. Despite a mixed tone later in the week, selective trading continued.
Overall, average mid-yields fell 34 basis points week-on-week to 17.91%.
Foreign Exchange
The naira closed at ₦1,539.24 to a U.S. Dollar this Friday, appreciating by 52.50 basis points week-on-week against the dollar. This was supported by steady CBN interventions, improving FX inflows and market confidence around inflation and macro reforms.
Outlook for the Week
Equities: Likely to retain positive bias amid Q2 earnings expectations and foreign portfolio flows.
Fixed Income: Yield compression may continue if inflation trends stay soft and liquidity remains robust.
FX: The naira’s stability depends on CBN’s intervention pace, oil flows, and external reserve trends.
Recommendation
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