October 2026, Edition 2
Nigeria’s financial markets reported a week of mixed signals, as declining equities and selective fixed-income repricing contrasted with strong demand for longer-dated money-market instruments, improving external reserves, and an upgraded economic growth outlook. With the World Bank projecting 4.3% growth in 2026 and foreign reserves surpassing $55 billion, investor confidence had some support; however, persistent yield uncertainty, inflation risks, and geopolitical volatility continued to shape asset allocation. This week’s review examines the key market movements, auction dynamics, and global developments influencing investment sentiment and Nigeria’s financial outlook. In commodities, prices closed higher Week-on-Week (WoW) at $91.66/bbl. (+0.60%) and $104.43/bbl. (+2.13%) for West Texas Intermediate (WTI) and Brent crude, respectively, while gold was at $4,193.33/oz. (+1.28%).
System liquidity opened at ₦5.05 trillion, peaked at ₦7.09 trillion on Tuesday due to ₦2.17 trillion in OMO maturity inflows, and closed at ₦3.71 trillion on Friday, marking a 26.53% WtD decline. Money market rates were in the 20.00% range, with the Open Repo Rate (OPR) and Overnight (O/N) rate closing WoW at 20.40% (-0bps) and 20.85% (+5bps). In the Foreign Exchange (FX) market, the Naira traded within a range of $/₦1,329.00 and $/₦1,334.00, before closing at $/₦1,331.19 on Friday.
The fixed-income secondary market demonstrated a bearish-to-cautious repricing trend during the period, with elevated offers and gradually improving bid levels reflecting repricing and demand across instruments. OMO offers initially traded around 16.70%–18.05% on Monday, before easing toward 15.60%–16.80% by Wednesday and Thursday, particularly on the 07-Oct-2027 bill following the auction result; however, Friday’s bids inched up to 17.60% on the Jan-2027 OMO maturity, indicating renewed upward yield pressure on select short-dated instruments. FGN bonds also experienced a gradual firming in bid yields, with the April 2037 bond rising from bids around 16.55%–16.65% early in the week to approximately 16.88% on Friday, while the 2031 and 2032 paper recorded bids of 16.78% and 16.90%, respectively, including the 2031-2038 benchmark securities. Overall, the market performance illustrates a bearish sentiment with persistent yield uncertainty, as investors demand competitive returns.
Money Market Issuance: The OMO auction held on October 6, 2026, reinforced the strong investor preference for longer-dated sterilisation instruments, with a total subscription of +175.5% against a combined offer of ₦2.0 trillion. Demand was heavily concentrated in the 182-day tenor, which attracted 2.69x in bids and recorded a substantial 2.67x allotment, representing virtually full allocation of demand, while the 147-day tenor received 0.82x demand with 0.64x allotted. Stop rates moderated by 2bps across both tenors, to 17.22% and 16.92% for the 147- and 182-day bills, respectively. Effective yields moderated to 18.50% (-3bps) and 18.48% (-2bps), respectively, reinforcing the market’s preference for locking in current yields despite the gradual compression. The bid range of 16.49%–17.39% indicates a relatively defined pricing boundary, while the negative-sloping curve suggests that the market is not pricing a uniform decline in yields across tenors. Overall, the outcome points to selective bullish sentiment, supported by robust liquidity and strong demand for longer-duration OMO instruments, although investors are likely to remain price-sensitive as yields continue to adjust.
AUCTION DATE | TENOR | OFFER (₦‘ B) | BIDS (₦‘ B) | TOTAL SALE (₦‘ B) | STOP RATES (%) | PREVIOUS TENOR RANGE STOP RATES (%) |
06-10-2026 | 147-DAY | 1000.00 | 817.95 | 637.20 | 17.2200 | 17.2400 |
182-DAY | 1000.00 | 2,692.96 | 2,671.46 | 16.9200 | 16.9400 |
NTB Issuance: Amid rising uncertainty and easing demand, with system liquidity at ₦3.96 trillion, the October 7, 2026 auction reflected a strong but increasingly selective demand, with total subscriptions of ₦1.77 trillion against ₦900 billion offered (+0.50% from the previous auction), and an aggregate bid-to-cover ratio of 1.97x. Demand was concentrated at the long end, with the 1-year bill attracting 2.4x its offer and 1.26x in allotment, while the short- and mid-day bills were undersubscribed at 0.39x and 0.47x, with allotment ratios of 0.38x and 0.46x, respectively. The stop rates held at 15.50% and 15.80% for the short- and mid-day bills, translating to effective yields of 16.12% and 17.15%, while the 364-day bill stop rate eased 4bps to 15.85%, as well as the effective yield at 18.83% (-5bps). The stronger demand for longer tenor suggests investors are prioritising yield-locking amid expectations of further rate compression. With the one-year stop rate down from 17.70% in July to 15.85% as at the last auction, the outcome reinforces the ongoing downward repricing cycle while highlighting the trade-off between securing current yields and assuming greater reinvestment risk as rates decline.
AUCTION DATE | 07-10-2026 | 07-10-2026 | 07-10-2026 |
MATURITY DATE | 07-01-2027 | 08-04-2027 | 07-10-2027 |
TENOR | 91-DAY | 182-DAY | 364-DAY |
OFFER (₦) | 100,000,000,000 | 100,000,000,000 | 700,000,000,000 |
SUBSCRIPTION (₦) | 39,423,570,000 | 46,874,631,000 | 1,683,433,635,000 |
ALLOTMENT (₦) | 38,548,953,000 | 44,922,580,000 | 885,002,221,000 |
BID RANGE (%) | 14.0000 – 17.0000 | 15.2800 – 17.2900 | 15.1800 – 18.5000 |
STOP RATES (%) | 15.5000 | 15.8000 | 15.8500 |
PREVIOUS STOP RATES (%) | 15.5000 | 15.8000 | 15.8900 |
According to PenCom’s August 2026 industry report, Nigeria’s total pension fund net asset value (NAV) expanded by ₦289.40 billion (+0.92% MoM) to reach ₦31.80 trillion ($23.87 billion) as of August 31, 2026, supported by an expanding contributor base of 11.39 million retirement savings account (RSA) members. The portfolio’s asset allocation remains heavily anchored in Federal Government securities, which account for ₦17.80 trillion (approximately 56% of total NAV), predominantly held in long-duration held-to-maturity (HTM) bonds (₦13.44 trillion) to lock in attractive yields. Domestic equities form the second-largest exposure at ₦6.32 trillion (nearly 19.9% of NAV), with active allocations concentrated in Fund II (₦4.12 trillion) and Fund III (₦1.15 trillion) driving capital growth. Meanwhile, money market instruments (₦3.27 trillion) and corporate debt (₦2.21 trillion) provide necessary liquidity and credit spreads. However, deployment into higher-yielding, real-economy asset classes like infrastructure funds (₦344.62 billion), private equity (₦267.01 billion), and real estate (₦132.81 billion) remains constrained, indicating the ongoing strategy of Pension Fund Administrators (PFAs) to optimize asset diversification while preserving inflation-adjusted capital gains.
The World Bank’s upgraded Nigeria’s 2026 economic growth forecast to 4.3% from 4.1% in 2025, with growth projected at 4.4% annually in 2027–28, reflects improving macroeconomic stability, investor confidence, and private investment; this is reinforced by 4.43% real GDP growth in Q2 2026 according to National Bureau of Statistics (NBS) data, while state revenues reportedly rose 93% in real terms between 2023 and 2025. However, the growth outlook remains a quality-of-growth test: Sub-Saharan Africa’s forecast was also raised to 4.3% from 4.1%, yet per-capita income growth is expected at only 1.8%, while Nigeria’s industrial growth slowed to 4.0% from 7.5% a year earlier. The implication for Nigeria is that stronger headline growth could improve investor sentiment, fiscal capacity and capital-market opportunities, but sustained benefits will depend on converting reform-led stability into productive private investment, jobs, infrastructure and productivity, particularly as elevated fuel costs and potential pre-election fiscal pressures remain downside risks.
The Naira marginally eased during the week in the Nigerian Foreign Exchange Market (NFEM), gaining 0.50 (-0.04%) WtD, losing ₦2.01 (+0.15%) WoW, closing at $/₦1,331.19 (WoW: $/₦1,330.10). Foreign reserves continued its ascent, crossing the $55.00 billion mark thereby increasing from $54.92 billion to $55.07 billion (+0.11%) as of October 8, 2026, while blocked funds improved to $502.86 million (+0.14%) from $501.91 million, with the blocked reserve ratio steady at 0.91%, indicating improved foreign exchange conditions and receipts amidst external pressures.
The Nigeria Exchange (NGX) closed the week on a stronger footing, despite a bearish run over the week, with the ASI declining across all four reported sessions and rebounding on Friday at 248,363.55 points, with its YtD return moderating from +61.17% to +59.60%, reflecting persistent profit-taking and large-cap selling pressure. Market breadth remained negative throughout, moving from 0.82x on Monday to 0.47x on Friday, as decliners consistently outnumbered gainers. Selling was concentrated in banking, oil & gas, and selected large-cap stocks, with ARADEL (-10.00%) and MTNN (-3.54%) driving Thursday’s sharpest decline, while NEIMETH, OANDO, ETI, UNILEVER and UBA also featured repeatedly among the losers. Trading activity was volatile, initially strengthening to ₦40.87bn on Monday, weakening to ₦22.92bn on Wednesday, before recovering to ₦37.94bn on Thursday, suggesting continued investor participation despite the broader risk-off tone. Sectorally, the Oil & Gas Index (-3.85%) led the laggards, Banking (-1.33%), Insurance (-1.74%), Consumer Goods (-0.58%), while Industrial Goods gained marginally (+0.02%). Overall, the week’s price action reflects persistent risk appetite.
Other developments: Sterling HoldCo’s 10-for-1 share reconstruction, which reduced its listed shares from 68.50 billion to 6.85 billion and restored trading at ₦77 per share, alongside Multi-Trex Integrated Foods’ return to the NGX after nearly eight years of suspension, highlights the importance of capital-structure efficiency and regulatory compliance in strengthening market integrity. Meanwhile, MTN Nigeria disclosed insider share sales by executives: Moses Oyerinde sold 25,000 shares worth approximately ₦20.48 million at a weighted average price of ₦819.38, following an earlier disclosure involving Osebi Ufot’s sale of 8,000 shares valued at ₦6.8 million. While insider sales are not, by themselves, evidence of misconduct or a negative outlook, they warrant transparent disclosure and careful investor interpretation; ultimately, market confidence depends not merely on corporate actions, but on credible governance, timely reporting and sustained business performance. Zenith Bank Plc reported a profit before tax of ₦637.60 billion for the half-year ended June 30, 2026, reflecting a 1.91% increase from ₦625.63 billion in H1, 2025, while gross earnings decreased by 24.6% to ₦1.90 trillion due to slower trading performance. Building upon a robust full-year 2025 where total assets reached ₦31.46 trillion and net profit crossed ₦1.04 trillion, the bank rewarded shareholders by raising its interim dividend by 20% to ₦1.50 per share. This period also marked a historic leadership transition, with the founder, Jim Ovia, CFR. retiring as Board Chairman, succeeded by Engr. Mustafa Bello, while Group Managing Director Dr. Adaora Umeoji continues to steer executive operations.
Global financial markets weathered mixed sentiment driven by central bank policy expectations, inflation indicators, and geopolitical developments. Economic releases highlighted resilient activity paired with lingering price pressures. East Africa’s monetary policy reflects differing inflation-growth trade-offs: on October 7, the Central Bank of Kenya (CBK) held its policy rate at 8.75% while upgrading its 2026 growth forecast from 4.9% to 5.0%, supported by stronger industrial and services activity, despite inflation rising to 6.8% in September. This indicates that Kenya is prioritising policy stability as growth improves, while highlighting how domestic price pressures shape central bank decisions across the region. In the U.S., the final S&P Global US Services PMI rose to 58.8 in September (lifting the Composite PMI to 58.4), whereas the US ISM Services PMI edged down slightly to 54.9 while its Prices Paid component jumped to 74.0, as investors balanced solid US corporate earnings and cooling Treasury yields, with the 10-year settling at 5.23%–5.24% and UK 10-year Gilts at 5.41%–5.48%. In Europe, Eurozone August Industrial Producer Prices (PPI) posted a steep month-on-month increase of +1.9% (+21.0% y/y for energy). Across global central banks and regional indicators, the Reserve Bank of Australia raised its cash rate target by 25 basis points to 4.60% (its highest level since 2011), which contributed to Australia’s Westpac–Melbourne Institute Consumer Sentiment Index dropping 4.7% to 80.4 points in October; concurrently, the Reserve Bank of India hiked its key repo rate by 25 basis points to 5.50%. Labour data showed Canada’s September unemployment rate held near 6.5%, rounding out a week characterized by cautious repositioning across fixed income, foreign exchange, and equity benchmarks. The equities market performance closed largely positive WoW; the Nasdaq Composite at 27,366.17 (+0.64%), the S&P 500 at 7,811.54 (+1.15%), and the Dow Jones Industrial Average at 51,654.95 (+0.93%). Across Europe, Germany’s DAX 40 was at 25,087.27 (-0.57%), while the FTSE 100 was at 10,552.05 (+0.86%), and the Stoxx 600 at 631.55 (+0.03%). Asian markets were mixed, with Japan’s Nikkei 225 at 69,030.92 (+1.06%), China’s Shanghai Composite Index at 3,813.79 (-0.74%), Hong Kong’s Hang Seng Index at 24,211.35 (+1.00%), and South Korea’s KOSPI at 6,625.93 (-5.39%).
Oil prices ended the week higher and highly volatile as shifting geopolitical and supply-risk dynamics outweighed signs of recovering Middle Eastern crude flows. Brent crude traded within a weekly range of $98.38–$104.76/bbl, while crude oil ranged between $87.99/bbl and $91.90/bbl. based on reported daily closes. Prices initially declined as Saudi Arabia cut its November Arab Light selling price to Asian buyers, Middle Eastern exports recovered, the G7 announced a 100 million-barrel emergency stockpile release, and OPEC+ maintained November production targets; however, renewed attacks on tankers in the Strait of Hormuz, heightened US-Iran tensions, and Gulf of Mexico supply disruptions linked to Hurricane Isaias reversed the decline, pushing Brent above $105/bbl. intraday, crude was above $92.6/bbl. before prices eased on after President Donald Trump cited “productive discussions” with Iran. By Friday, Brent closed at $104.43/bbl., while crude settled at $91.66/bbl., leaving the market sensitive to the balance between geopolitical disruption risks and improving supply flows. Gold closed the week stronger at $4,193/oz, recovering from midweek losses as softer US labour data and retreating bond yields reduced rate-hike expectations, while persistent geopolitical tensions continued to underpin safe-haven demand.
The coming week is poised to be a heavy week with macroeconomic updates as well as inflation reports from domestic and global markets, serving as a highly reactive period amidst global oil price volatility. Nigeria is expected to receive liquidity inflows of more than ₦2.61 trillion, comprising ₦2.41 trillion from OMO maturities, NTB maturity of ₦80.84 billion, and ₦27.56 billion from Sukuk coupons. While supporting a substantial liquidity pool that could influence money-market rates, asset allocation, and the direction of fixed-income yields.
By: Sandra A. Aghaizu
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