Think Thursday - Resilience Amid Reform: Nigeria’s Market Adapts as Global Caution Builds
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Market Overview
Good evening and welcome to today’s Market kickoff. Nigeria’s capital markets are adapting to major reforms, driven by insurance and banking recapitalisation and rising FX inflows. Despite naira pressure, sectoral compliance and expansion (e.g., Jaiz Bank) show positive momentum. Oil output is up, with Nigeria reaffirming OPEC alignment. Globally, markets are cautious ahead of Fed signals, with equities dipping, oil and the dollar rising, and the VIX pointing to growing investor risk aversion.
Nigerian News & Market Update
The Nigerian Insurance Industry Reform Act 2025 is reshaping Nigeria’s insurance sector through its recapitalisation mandate :
President Tinubu’s Nigerian Insurance Industry Reform Act, 2025 mandates higher minimum capital for insurers (life: ₦10 billion, non-life: ₦15 billion, reinsurers: ₦35 billion) with a 12-month compliance window. The reform aims to strengthen solvency, increase domestic risk retention, attract investment, and improve governance, while likely triggering market consolidation and enhancing insurance penetration. - Businessday
Recapitalisation Drive as Banks Plan to Raise Additional ₦900 Billion Capital in 2025:
Nigerian banks are injecting an additional ₦900 billion in 2025 to meet CBN capital requirements, with eight banks already compliant. Non-performing loans rose to 5.2% in 2024, and FY 2025 pre-tax profits are expected to fall 19.2%, though a rebound is projected in 2026. Banks must submit capital restoration plans and quarterly disclosures, while some face restrictions on dividends and foreign investments. - Punch
Foreign Exchange Inflows Hit $3.8billion in July:
Foreign exchange inflows into Nigeria rose by 24% in July 2025 to $3.8 billion, mainly driven by non-bank corporates, signalling improved investor sentiment. However, the naira continued to weaken due to high demand and liquidity issues, trading above ₦1,530/$ at official and parallel markets. The Central Bank increased interventions, while reliance on foreign portfolio investments raised concerns over market vulnerability. U.S. political tensions, including Trump’s call for a Fed governor’s resignation, added to global uncertainty affecting FX markets.- Leadership
Nigerian Economic Summit Group (NESG) launches 31st economic summit, urges second wave of reforms:
The 31st Nigerian Economic Summit (NES#31), scheduled for 6–8 October 2025 in Abuja, will focus on “The Reform Imperative”, aiming to sustain reforms, boost industrialisation, infrastructure, inclusion, and investment, and support Nigeria’s long-term development goals through Agenda 2050. - Premiumtimes
Jaiz Bank meets CBN capitalisation target:
Jaiz Bank has met the CBN’s new recapitalisation requirement and plans to raise an additional ₦150 billion. The bank will relaunch its Micro, Small, and Medium Enterprises (MSME) financing program with over ₦800 million in funding, introduce a new Naira Mastercard for international transactions from September 1, and launch a WhatsApp banking app. Jaiz Bank also aims to expand regionally, engaging with regulators in Ghana and Sierra Leone for potential operations abroad. - Guardian
Nigeria committed to OPEC rules despite output rise — Lokpobiri:
Nigeria’s crude oil production rose to 1.507 million bpd in July, with the government reaffirming commitment to Organization of the Petroleum Exporting Countries (OPEC) quotas and sector reforms. Authorities urged local refineries to maximize output, warned non-performing licence holders, and highlighted investment and workforce development. Labour unions called for improved safety, ESG compliance, and an end to gas flaring, while regulators and Nigerian National Petroleum Corporation (NNPC) emphasized collaboration for a resilient, competitive oil sector. - Punch
Nigeria Sectoral Indices Performance
The table below shows that the table shows the performance of various Nigerian Exchange (NGX) sector indices. Most indices are down for the week (WTD), but many show strong growth for the year (YTD). The NGX Insurance Index leads with a 68.39% YTD gain, while the NGX Oil/Gas Index is the only one in decline YTD at -12.09%. Despite short-term losses, overall market performance remains positive.
Fixed Income (FGN Bonds)
Global News & Market Update
India, Russia agree to boost trade ties after foreign ministers meet in Moscow:
India and Russia agreed to strengthen trade ties, focusing on energy cooperation and expanding Indian exports to Russia, despite U.S. tariffs on Indian goods over its purchase of Russian oil. Both countries emphasized long-standing relations, joint energy projects, and overcoming trade barriers, with India and China remaining key buyers of Russian crude amid Western sanctions. - Reuters
Global equities retreat, as oil and dollar advance:
Global markets were mixed ahead of the Federal Reserve’s Jackson Hole symposium, with equities mostly lower and gold easing. Investors awaited Fed Chair Jerome Powell’s speech for clues on a potential September rate cut. Oil prices rose on strong U.S. demand, while the dollar strengthened. Market sentiment was cautious amid concerns over tariffs, inflation, and Fed independence, with Treasury yields slightly higher and European and U.S. stocks under pressure. - Reuters
India imports canola oil after 5 years as local prices surge:
India imported canola oil for the first time in nearly five years due to local prices hitting a 3½-year high. A 6,000-ton shipment from the UAE is expected in August, as rising rapeseed oil prices make overseas purchases more attractive. Some buyers are also substituting costly rapeseed oil with cheaper soyoil imports. - Reuters
EU still seeking lower US tariff for wine and spirits, says trade commissioner:
The European Commission will continue seeking preferential U.S. tariffs for EU wine and spirits, currently subject to a 15% rate under the EU-U.S. trade deal. Industry groups on both sides urge a return to zero tariffs, while the EU recently suspended retaliatory tariffs on U.S. imports for six months. - Reuters
Indices, Commodities & Currencies
The table below depicts that Markets show broad declines in equities and metals, while energy and some agricultural commodities are seeing gains. Currency movements are mixed, with a slightly stronger USD and JPY. The spike in VIX suggests rising investor caution.
Fixed Income (USA Bonds)
Events
Conclusion
Looking ahead, Nigerian markets are poised for structural realignment, with the recapitalisation drive likely triggering mergers and increased investor scrutiny. While the local equities market remains resilient year-to-date, short-term corrections may persist. Globally, all eyes are on the Fed’s Jackson Hole address, which could shift sentiment sharply. Expect continued volatility, especially in FX and commodity-linked assets, as markets weigh reform optimism against global macro uncertainty.
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