September 2026, Edition 3
The Nigerian financial markets maintained a broadly constructive tone during the week, with strong demand in the fixed-income space driving notable yield compression across Open Market Operation (OMO) and longer-dated Nigeria Treasury Bills (NTB), even as secondary-market activity remained selective ahead of the September FGN Bond auction. The CBN’s OMO auction reinforced the easing bias, with stop rates falling sharply amid record-high demand, while the NTB auction showed a clear preference for the 364-day tenor despite subdued demand at the short end. While Q2 2026 trade strengthened, with a ₦12.60 trillion surplus driven by stronger exports and lower imports, despite continued weaknesses in agricultural and manufactured exports. The Naira strengthened modestly alongside higher foreign reserves while, equities corrected as profit-taking reduced year-to-date (YtD) gains, while global markets remained sensitive to inflation, thereby elevating sovereign yields, and shifting rate expectations. Commodity markets added another layer of risk, with crude oil prices surging on heightened Middle East supply concerns, while gold remained supported by geopolitical uncertainty despite pressure from higher U.S. yields. In commodities, prices rebounded higher Week-on-Week (WoW), with West Texas Intermediate (WTI) and Brent crude increasing by 9.37% and 8.65% to $100.05/bbl. and $104.61/bbl. respectively, while gold fell by 1.85% to $4,350.36/oz.
System liquidity opened at ₦4.33 trillion, peaked at ₦7.33 trillion on Tuesday, and closed at ₦2.46 trillion on Friday, marking a decline of 43.07% week-to-date (WTD). Money market rates were relatively stable, with the Open Repo Rate (OPR) at 22.00% and the Overnight (O/N) rate at 22.15% (WoW: -8bps). In the Foreign Exchange (FX) market, the Naira traded within a range of $/₦1,318.00 and $/₦1,334.00, before closing at $/₦1,326.52 on Friday.
The fixed-income market opened with bullish momentum at the start of the week, with a slight reversal seen on Tuesday following the release of the September 2026 FGN Bond Auction Circular, with secondary-market yields readjusting to price in the expected auction level. OMO offers moved from around 18.60% to 18.35% on Monday to 18.25% by Friday, while the NTBs also repriced following the auction result, reflecting to existing bills across the curve, with the 09-Sept-27 offer moving from 16.65% to 16.70% on Wednesday to a high 16.00% on Friday, alongside bids easing from 16.70% to 16.60%, indicating declined buying interest but increasingly tighter spreads. FGN bond offers also repriced lower, particularly across the 2031–2038 maturities, with offers on 2031 at 16.95% on Tuesday and moved up by 10bps on Friday, while the 2037–2038 segment settled broadly in the 16.65% to 17.10% range. Overall, the week posed a new sentiment with a slightly bearish outlook, while investors remain selective ahead of fundamental shifts and macro developments.
Money Market: The September 8, 2026, OMO auction result points to a broad easing in CBN funding costs and a rate compression drive, with stop rates declining across tenors, falling by 45bps on the 84-day to 19.14%, 50bps on the 147-day to 18.49%, and 58bps on the 154-day to 18.41%, marking a significant downward repricing from the previous 18.99% – 19.59% range. Demand remained heavily concentrated at the longer end, particularly the 154-day bill, which attracted 10.5x the offer and received 7.36x in allotment, while the 91- and 147-day tenors recorded oversubscription of 3.99x and 3.28x, respectively, with an allotment of 3.19x and 2.04x. The combination of strong demand and sharply lower clearing rates suggests increased investor willingness to lock in longer-dated liquidity at lower yields, reinforcing expectations of further yield compression. Effective yield also declined to 20.02% (-57bps), 19.98% (-58bps), and 19.96% (-68bps) for the 84-, 147-, and 154-day bills, respectively. In the secondary market, the auction establishes a lower benchmark across the OMO curve, which should support price appreciation in existing securities, particularly longer-dated OMO bills, as investors reprice holdings toward the new clearing levels. Notably, total demand reached a year-high at ₦6.31 trillion and the second-highest by 14.7% in September 2026, while total sales rose by 52.7% to ₦4.40 trillion from the previous sale. This comes on the back of stable FX at the $/₦1320.00 range.
AUCTION DATE | TENOR | OFFER (₦‘ B) | BIDS (₦‘ B) | TOTAL SALE (₦‘ B) | STOP RATES (%) | PREVIOUS TENOR RANGE STOP RATES (%) |
08-09-2026 | 84-DAY | 200.00 | 797.21 | 637.19 | 19.1400 | 19.5900 |
147-DAY | 400.00 | 1,312.22 | 817.32 | 18.4900 | 18.9900 | |
154-DAY | 400.00 | 4,196.72 | 2,942.77 | 18.4100 | 18.9900 |
Primary Issuance: The second NTB auction in September 2026 signalled strong preference for the 364-day tenor, which attracted about 6.48x the offer, while demand for the 91- and 182-day bills remained weak at just 0.51x and 0.34x, respectively. Despite the heavy long-end demand, the Debt Management Organisation (DMO) cut the 364-day stop rate by 31bps to 16.84%, while keeping the 91- and 182-day stop rates unchanged at 16.30% and 16.50%, respectively, reflecting investor acceptance of lower yields amidst demand for attractive returns. Notably, the 364-day allotment exceeded its offer by 1.52x, indicating the DMO’s selective accommodation of over-demand, likely providing a bullish signal for the secondary market, particularly at the long end, as the lower auction clearing rate established a softer yield benchmark and could trigger repricing gains in existing longer-dated bills. However, the selective allotment may also increase near-term supply pressure in the secondary market, leaving room for lower stop rates at subsequent auctions. Effective yields settled at 16.99%, 17.98%, and 19.92% (-32bps), showing a clear departure from the 20% region. Overall, the auction points to sustained demand-driven yield compression at the long end, while the weak demand for shorter tenors suggests investors remain reluctant to deploy funds at current short-tenor yields.
AUCTION DATE | 09-09-2026 | 09-09-2026 | 09-09-2026 |
MATURITY DATE | 10-12-2026 | 11-03-2027 | 09-09-2027 |
TENOR | 91-DAY | 182-DAY | 364-DAY |
OFFER (₦) | 150,000,000,000 | 100,000,000,000 | 500,000,000,000 |
SUBSCRIPTION (₦) | 75,697,864,000 | 28,970,428,000 | 2,536,855,721,000 |
ALLOTMENT (₦) | 70,467,854,000 | 22,436,425,000 | 961,275,878,000 |
BID RANGE (%) | 15.8000 – 20.0000 | 16.0000 – 17.6000 | 15.5900 – 19.2300 |
STOP RATES (%) | 16.3000 | 16.5000 | 16.6200 |
PREVIOUS STOP RATES (%) | 16.3000 | 16.5000 | 16.8400 |
The DMO’s September FGN Bond auction circular offers a combined ₦1.0 trillion across a new 10-year bond maturing in September 2036 and a reopening of the 15.45% June 2038 bond, signalling continued reliance on long-dated domestic borrowing to fund government financing needs while extending the debt maturity profile. The 15-year reopening carries a fixed 15.45% coupon, while the new 10-year instrument will be priced based on prevailing market yields, making investor demand and bid levels particularly important in determining the government’s effective borrowing cost. With FGN bonds qualifying as liquid assets for banks and benefiting from broad institutional eligibility and tax advantages, demand should remain supported. Overall, the auction will provide an important read on investor confidence, long-term yield expectations and the direction of Nigeria’s domestic borrowing curve, with aggressive bidding potentially signalling expectations of easing yields, while weak demand or higher clearing yields would point to continued pressure on government funding costs.
The Naira further appreciated during the week in the Nigerian Foreign Exchange Market (NFEM), gaining ₦5.96 (+0.45%) WTD and ₦5.30 (+0.40%) WoW, closing at $/₦1,326.52 (WoW: ₦1,321.22). Foreign reserves increased from $54.08 billion to $54.41 billion (+0.60%) as of September 10, 2026, while blocked funds eased to $523.33 million (-1.76%), with the blocked reserve ratio at 0.96% (-0.2 bps), indicating an improved foreign exchange condition and receipt amidst external pressures.
According to the National Bureau of Statistics (NBS), Nigeria’s Q2 2026 foreign trade report strengthened materially, with total trade rising to ₦41.44 trillion, up 5.61% year-on-year (YoY) and 19.13% quarter-on-quarter (QoQ), as exports expanded by 18.77% YoY to ₦27.02 trillion while imports declined by 12.55% YoY to ₦14.42 trillion, widening the trade surplus by 101.32% YoY to ₦12.60 trillion. Export performance remained heavily supported by crude oil, valued at ₦12.91 trillion, and a strong 34.08% YoY increase in non-crude petroleum exports to ₦10.38 trillion, alongside significant gains in raw-material and solid-mineral exports. However, the sharp 36.09% contraction in agricultural exports and 51.10% decline in manufactured exports highlight persistent weaknesses in Nigeria’s non-oil export base, while manufactured goods continued to dominate imports at ₦9.51 trillion. Asia remained the country’s largest trading region, accounting for 32.29% of exports and 59.37% of imports, while ECOWAS remained an important regional export market. Overall, the sizeable trade surplus strengthens Nigeria’s external position and should support reserve accumulation, FX liquidity and Naira stability, while the decline in refined petroleum imports points to growing domestic refining capacity; however, continued dependence on petroleum exports, weaker agricultural and manufactured exports, and elevated food imports underscore the need for deeper production and export diversification.
The Nigerian Exchange (NGX) ASI fell sharply mid-week primarily because portfolio managers and institutional investors aggressively sold off heavyweight banking and large-cap stocks to free up capital and to reposition their portfolios ahead of the historic Dangote Petroleum Refinery Initial Public Offering (IPO) opening on September 14, 2026. As the equities market shifted from a modest Monday gain into broad-based profit-taking, with the NGX ASI falling by 1.88% from 247,699.78 points to 243,053.00 by Friday, trimming YtD gains to +56.19% from +58.72%. After Monday’s selective buying lifted the ASI 0.29%, heavy selling on Wednesday drove a 1.05% decline, wiping ₦1.69 trillion from market capitalisation as major names including BUACEMENT, CADBURY, NB and NESTLE fell sharply. By week close, market breadth declined from 0.27x to 0.10x, while volume surged 534.29% to 2.59 billion units pointing to renewed selective buying. Nevertheless, market capitalisation declined 1.27% to ₦159.08 trillion WTD, highlighting the pre-IPO liquidity squeeze, continued profit-taking, valuation compression and rotation rather than a firm return to a sustained bullish trend. Key sectors were largely negative; Insurance (-5.52%), Banking (-4.07%), Industrial Goods (-3.36%), and Consumer Goods (-2.55%) except Oil & Gas (+2.83%).
In the week ended September 11, 2026, global financial markets navigated a complex economic backdrop defined by stubborn price pressures and rising sovereign borrowing costs. In North America, U.S. wholesale prices accelerated with the final demand Producer Price Index (PPI) rising 5.4% YoY (and 0.4% month-over-month), while annual Consumer Price Index (CPI) inflation rose at 3.4% (+0.4% MoM), fuelling market expectations of a 25-basis-point rate increase at the upcoming Federal Reserve meeting. Across Europe, Germany confirmed its annual inflation rate rose to 2.9% in August, driven by higher energy costs, while U.K. monthly GDP expanded by 0.4% in July. Central banks adjusted policy accordingly, with the European Central Bank (ECB) increasing its three key interest rates by 25 basis points; with the deposit facility rate, main refinancing operations and marginal lending facility at 2.50%, 2.65% and 2.90%, respectively. The rate hike is expected to further tighten the Euro area financial conditions, particularly as the bank continues to reduce its balance sheet through the discontinued temporary asset purchase programme covering private and public sector securities. In response, sovereign bond yields surged globally: 10-year U.S. Treasuries climbed near multi-year highs at 4.96%, U.K. 10-year Gilts pushed toward 5.38%, and German 10-year Bunds rose past 3.45%. The equities market performance closed WoW low: the Nasdaq Composite at 26,333.04 (-0.66%), S&P 500 at 7,656.98 (-0.80%), and the Dow Jones Industrial Average at 52,573.29 (-1.60%). Across Europe, Germany’s DAX 40 was at 25,568.56 (-1.83%), while the FTSE 100 was at 10,650.44 (-1.67%), and the Stoxx 600 at 639.10 (-1.66%). Asian markets were positive, with Japan’s Nikkei 225 at 64,011.34 (-1.55%), China’s Shanghai Composite Index at 3,888.11 (-1.07%), Hong Kong’s Hang Seng Index at 24,805.63 (-3.30%), and South Korea’s KOSPI at 6,909.91 (+3.33%).
Oil prices advanced sharply during the week amid escalating Middle East tensions and heightened concerns over global supply disruptions. WTI crude traded within an approximate $92–$104 per barrel range, rising above $103/bbl. on September 10, before easing to around $100/bbl. on September 11, while Brent traded within a $97–$109/bbl. range, reaching above $108/bbl. marking its weekly peak and highest since July 23, 2026, at 100.55/bbl. The rally was driven by US-Iran tensions, attacks on Saudi energy infrastructure, risks to shipping through the Strait of Hormuz and Bab al-Mandeb, a sharp fall in Saudi crude production and record-high tanker rates, although diplomatic efforts around Hormuz provided some relief at the end of the week. Gold traded within the $4,317–$4,417 per troy ounce range, pressured by rising expectations of a Federal Reserve rate hike and higher US producer-price inflation, despite continued support from geopolitical uncertainty and a softer dollar.
Globally, market direction remains sensitive to key policy and economic signals, with the China Retail Sales, Eurozone CPI, and US September Federal Open Market Committee (FOMC) rate decision expected to shape expectations as well as influence near-term risk appetite and asset-price momentum. Locally, the coming week is expected to see over ₦3.65 trillion in liquidity inflows, comprising ₦3.06 trillion from OMO maturities, ₦449.76 billion from NTB maturities, and FGN Bond coupons of ₦141.71 billion, providing supportive liquidity conditions for fixed-income demand ahead of the scheduled ₦1.00 trillion FGN Bond auction and August Inflation report. In the week, we expect the kick-off of Dangote Petroleum Refinery IPO which is expected to be one of Africa’s largest capital raises.
Honeywell Flour Mills Plc. is scheduled to pay a ₦0.20 per share dividend on September 17, 2026, followed by Redstar Express Plc, which is expected to pay ₦0.45 per share on September 18, 2026.
By: Sandra A. Aghaizu
Inflation keeps knocking,
interest rates answer the door.
Bonds climb higher,
while stocks step back
and count the cost.
Governments borrow,
markets listen.
Every percentage point
becomes another weight
in the traveller’s bag.
The world keeps moving,
but money walks carefully,
looking for a safer road.
And somewhere between
rising prices and falling shares,
the market whispers:
Patience.
The road ahead
is still being written.
