In June 2025, signs of slower growth and weakening activity became more apparent. The labour market softened further in the U.S., with employers adding only 139,000 jobs in May, significantly below consensus expectations. On the other hand, over 600,000 individuals exited the labour force, pointing to waning workforce participation.
Consumer spending fell 0.1% month-on-month, particularly in durable goods, highlighting weakening domestic demand. Additionally, inflation in May rose to 0.1%, slowing from 0.2% in April, which indicates only modest progress in price stabilization.
Meanwhile, the Federal Reserve maintained interest rates at a 20-year high, resisting political calls for immediate rate cuts. Fed Chair Jerome Powell reaffirmed commitment to the 2% inflation target, citing insufficient progress on disinflation.
At the same time, federal budget deficit surged to $316 billion in May, pushing the year-to-date figure above $1.2 trillion, raising concerns over fiscal sustainability and its implications for future monetary policy. Together, these dynamics point toward a potentially cautious policy environment heading into Q3 2025.
Oil Market Volatility Persists Amid Global Trade Uncertainty
In June 2025, oil markets were marked by heightened volatility underpinned by escalating tensions between Israel and Iran, pushing Brent crude up, the month at $67.64 per barrel. OPEC+ proceeded with a planned 411,000 bpd output increase for July but signalled readiness to adjust production if conditions worsen. The next policy review is set for August where supply-demand fundamentals and geopolitical factors will likely influence further decisions.
Local Market Recap for June 2025
Equities Continue to Rally
In June 2025, Nigerian equities market extended its bullish streak for the third consecutive month, driven by robust investors’ confidence across all major sectors and strong sectoral performance. The NGX All-Share Index by 7.37% month-on-month, closing at 119,978.57 points, while market capitalization increased to ₦75.95 trillion. This upward momentum was bolstered by the successful Rights Issue and subsequent listing of additional shares by Sterling Financial Holdings Plc.
Based on sectoral performance, Consumer Goods sector led with a +10.75% rise, closely followed by Insurance (+10.33%), Banking (+10.04%), Industrial Goods (+5.60%), and Oil & Gas (+4.74%), signalling broad-based optimism among investors and renewed confidence in the market’s resilience and economic reforms.
Fixed Income Market
The Fixed income market traded modestly bullish in June, driven by improving demand and cooling inflation expectations. Average yields declined by 44bps month-on-month, closing at 18.24%.
At the June Debt Management Office (DMO) bond auction, ₦100 billion was raised, with the 19.30% FGN APR 2029 and 17.95% FGN FEB 2032 bonds clearing at 17.75% and 17.95%, respectively. Post-auction demand spurred renewed activities in the secondary market, driving yields marginally lower.
In the Nigerian Treasury Bills (NTB) space, ₦162.02 billion was allotted across tenors at stop rates of (91-day), 18.35% (182-day), and 18.84% (364-day). These developments reflect sustained appetite for short-term instruments amid a stabilizing macroeconomic environment.
On the Foreign Exchange Market, the Naira appreciated modestly against the U.S. Dollar in June 2025, closing the month at ₦1,539.24 to $1, compared to ₦1,580.44 to $1 at the end of May.
The Nigerian Capital Market
Our Position
We expect the Nigerian equities market (NGX) to sustain its upward trajectory, driven by declining inflation, supportive macroeconomic policies, and continued earnings re-ratings. Improving investor sentiment and sector-wide performance should provide additional tailwinds.
However, global market volatility – particularly from geopolitical risks and shifting monetary policy in advanced economies remains a potential headwind that could trigger intermittent corrections.
In the fixed income market, we anticipate further yield compression amid easing inflation expectations and strong demand for naira-denominated assets. This environment presents opportunities for capital appreciation in select mid-to-long tenor bonds, while money market instruments remain attractive for liquidity-conscious investors.
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June 2025
Economy Overview
Global Highlights for June 2025
In June 2025, signs of slower growth and weakening activity became more apparent. The labour market softened further in the U.S., with employers adding only 139,000 jobs in May, significantly below consensus expectations. On the other hand, over 600,000 individuals exited the labour force, pointing to waning workforce participation.
Consumer spending fell 0.1% month-on-month, particularly in durable goods, highlighting weakening domestic demand. Additionally, inflation in May rose to 0.1%, slowing from 0.2% in April, which indicates only modest progress in price stabilization.
Meanwhile, the Federal Reserve maintained interest rates at a 20-year high, resisting political calls for immediate rate cuts. Fed Chair Jerome Powell reaffirmed commitment to the 2% inflation target, citing insufficient progress on disinflation.
At the same time, federal budget deficit surged to $316 billion in May, pushing the year-to-date figure above $1.2 trillion, raising concerns over fiscal sustainability and its implications for future monetary policy. Together, these dynamics point toward a potentially cautious policy environment heading into Q3 2025.
Oil Market Volatility Persists Amid Global Trade Uncertainty
In June 2025, oil markets were marked by heightened volatility underpinned by escalating tensions between Israel and Iran, pushing Brent crude up, the month at $67.64 per barrel. OPEC+ proceeded with a planned 411,000 bpd output increase for July but signalled readiness to adjust production if conditions worsen. The next policy review is set for August where supply-demand fundamentals and geopolitical factors will likely influence further decisions.
Local Market Recap for June 2025
Equities Continue to Rally
In June 2025, Nigerian equities market extended its bullish streak for the third consecutive month, driven by robust investors’ confidence across all major sectors and strong sectoral performance. The NGX All-Share Index by 7.37% month-on-month, closing at 119,978.57 points, while market capitalization increased to ₦75.95 trillion. This upward momentum was bolstered by the successful Rights Issue and subsequent listing of additional shares by Sterling Financial Holdings Plc.
Based on sectoral performance, Consumer Goods sector led with a +10.75% rise, closely followed by Insurance (+10.33%), Banking (+10.04%), Industrial Goods (+5.60%), and Oil & Gas (+4.74%), signalling broad-based optimism among investors and renewed confidence in the market’s resilience and economic reforms.
Fixed Income Market
The Fixed income market traded modestly bullish in June, driven by improving demand and cooling inflation expectations. Average yields declined by 44bps month-on-month, closing at 18.24%.
At the June Debt Management Office (DMO) bond auction, ₦100 billion was raised, with the 19.30% FGN APR 2029 and 17.95% FGN FEB 2032 bonds clearing at 17.75% and 17.95%, respectively. Post-auction demand spurred renewed activities in the secondary market, driving yields marginally lower.
In the Nigerian Treasury Bills (NTB) space, ₦162.02 billion was allotted across tenors at stop rates of (91-day), 18.35% (182-day), and 18.84% (364-day). These developments reflect sustained appetite for short-term instruments amid a stabilizing macroeconomic environment.
On the Foreign Exchange Market, the Naira appreciated modestly against the U.S. Dollar in June 2025, closing the month at ₦1,539.24 to $1, compared to ₦1,580.44 to $1 at the end of May.
The Nigerian Capital Market
Our Position
We expect the Nigerian equities market (NGX) to sustain its upward trajectory, driven by declining inflation, supportive macroeconomic policies, and continued earnings re-ratings. Improving investor sentiment and sector-wide performance should provide additional tailwinds.
However, global market volatility – particularly from geopolitical risks and shifting monetary policy in advanced economies remains a potential headwind that could trigger intermittent corrections.
In the fixed income market, we anticipate further yield compression amid easing inflation expectations and strong demand for naira-denominated assets. This environment presents opportunities for capital appreciation in select mid-to-long tenor bonds, while money market instruments remain attractive for liquidity-conscious investors.
Securities Recommendations:
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