Nigeria Seeks Diversified Trade, Strengthens Partnerships with...

Last week, the Nigerian government took significant steps to strengthen its trade relations with key global partners, including Brazil, India, France, and the United Arab Emirates (UAE). These efforts are part of a broader strategy to diversify Nigeria’s trade and attract foreign investments, particularly in sectors like manufacturing, agriculture, and technology. A key focus of these initiatives is Nigeria’s commitment to working closely with international partners to improve infrastructure, increase exports, and generate jobs. Similarly, ongoing discussions with India and France are centered on expanding trade in technology, energy, and manufacturing, critical to Nigeria’s industrial growth. In addition, the government is prioritizing the development of Micro, Small, and Medium Enterprises (MSMEs) through partnerships with commercial banks to provide accessible loans across the country. This initiative aims to stimulate wealth creation at the grassroots level, promote local manufacturing, and reduce Nigeria’s dependence on oil exports. By focusing on MSMEs, the government hopes to create jobs, foster innovation, and alleviate poverty, particularly in rural areas. Furthermore, policies designed to improve Nigeria’s ease of doing business are being introduced to attract more foreign direct investment (FDI). With growing international interest in sectors such as renewable energy, agriculture, and digital technology, these moves reflect Nigeria’s strategic push to enhance its global competitiveness.

Money Market

System liquidity opened the session with a surplus of ₦969.77 billion, driven by remitta inflow. The Open Buy Back (OBB) and the Overnight (OVN) closed the day at 26.50% and 26.96%, respectively.

FGN Treasury Bills Market

The FGN Treasury Bills Market started the week quiet, due to the system illiquidity. We saw trades consummated on the 5 June NTB at 18.60% and the 19 Mar bill was seen quoted at 19.35/19.15. At the auction, the DMO sold 808.73bn out of a 1.43 trillion subscription. Stop rate on the 91-day bill and 182 day bill remained unchanged while the 364-day bill declined by 31bps to 19.63%. The newly issued 364-day bill was seen largely offered at 19.50. Week-on-week, the average benchmark yield increased by 14bps to close at 19.35%.

We expect little activity due to the public holiday.

FGN Bond Market

The FGN Bonds Market traded mixed sentiments sequel to the auction. Quotes were seen on the 29s at 19.05/18.85 and 33s at 19.85/19.60, while the 31s was largely offered at the 19.40% handle. At the auction, the DMO allotted ₦271.22bn out of a total subscription of ₦530.30bn. The stop rate for the 2029 maturity settled at 19%, while the 2033 maturity closed at 19.99%, reflecting a 20bps decline from the previous closing rate for the 2029 bond. Week-on-week, the average benchmark yield increased by 6bps to close at 18.54%.

We expect a similar session.

FGN Eurobond Market

The FGN Eurobonds market traded on a mixed note, initially extending the bullish momentum from the previous week. However, sentiment shifted following Trump’s announcement of a potential 25% tariff on all vehicles not manufactured in the United States, which weakened risk appetite. Regarding macroeconomic data, US final quarter-on-quarter GDP data printed at 2.4%, slightly above the 2.3% forecast, indicating steady economic momentum and US Core PCE data print came in at 0.4% above the 0.3% forecast. Week-on-Week, the average benchmark yield increased by 12bps to 9.39%.

We expect the PMI data and NFP data to dictate market sentiments.

Currency Market

The value of the Naira to the dollar appreciated by 0.01% to close at ₦1536.82/$ at the Nigerian Foreign Exchange Market Window (NFEM).

Equities Market

The local bourse ended the day with the benchmark NGX All-Share Index (ASI) appreciating by 23bps to close at 105,670.36. Market capitalization also increased, closing at ₦66.27 trillion. Market breadth was negative at 0.77x, with 24 advancers and 31 decliners. This performance was driven by gains in ABBEYBDS (+10.00%), UPDC (+10.00%) and NNFM (+9.96%), and losses in AFRIPRUD (-10.00%), INTENEGINS (-10.00%), and CADBURY (-9.42%).

Trading activity was robust on the day, with the volume of shares traded increasing by 27.92% to 541.44 million units, while the total value of shares traded increased by 110.62% to ₦19.32 billion. The most actively traded stocks by volume were MBENEFIT with 73.94 million units, CUTIX with 72.03 million units, and GTCO with 67.85 million units. In terms of value, ARADEL led with ₦6.43 billion, followed by GTCO at ₦4.57 billion, and NESTLE at ₦2.40 billion.

Reflecting the day’s performance, the NGX All-Share Index reflected a 1-week gain of 0.67% with an overall year-to-date gain of 2.66%. Other notable indices are the NGX Top 30 Index (0.25%; 0.74% 1WK; 2.90% YTD), NGX Banking Index (1.28%; 5.61% 1WK; 6.96% YTD), NGX Oil & Gas Index (-0.02%; -1.65% 1WK; -9.34% YTD), and NGX Insurance Index (-1.28%; 1.89% 1WK; -2.96% YTD).